Canada’s alternative investment management company, Brookfield, is selling its Australian retirement village owner/operator, for a figure around $3 billion.
Brookfield agreed to buy Aveo in August 2019 for $2B including debt and settled in December 2109. It has been the effective owner for three years and seven months. This means Brookfiled will have made ~$250M a year out of the deal.
The sale, if successful, will take eight to twelve months.
The Weekly SOURCE understands investment banks have been invited to pitch in the past fortnight for a role selling what was the country’s largest retirement operator, before it decided to put its retirement villages in South Australia and Tasmania for sale in April.
Commentators say the the decision to sell its 16 South Australian and Tasmanian villages will make Aveo a solely East Coast village operator and potentially more attractive for a sale by Brookfield. The village sales will also see Keyton take the crown as the largest retirement village operator in Australia.
Brookfield's decision to offload comes at a time when retirement village operators are benefiting from strong long-term tailwinds including an ageing population, population growth and a severe housing shortage.
Led by Aveo CEO Tony Randello, Brookfield has invested significantly in the business and been able to achieve consistent record sales and strong resident satisfaction.
Tony said in August last year that Aveo has moved from 1,000 units sold a year to 1,200 to 1,500 units, which he says they will now maintain.
Aveo village unit sales were severely affected by the Four Corners program ‘Bleed Them Dry Until They Die’, and were rumored to have up to 4,000 vacant units. If they sold 2,000 at $450,000 a home, the additional DMF income equates to an extra $270 million in cash on top of normal sales.
The Aveo sale process follows the news investment bank Jefferies is seeking a buyer for retirement village operator RetireAustralia, which earlier had been for sale through Jarden and E&P Corporate Advisory for over $1 billion before owners Infratil and NZ Super pulled it off the market..
Tony Randello's three-part interview with DCM Group Editor Lauren Broomham
