In a major vote of confidence in the land lease sector, the Sydney-based property developer has entered the growth market in a deal with Pacific Equity Partners (PEP) to buy Singaporean investment firm GIC’s 95% stake in Serenitas, who started business just five years ago.
Mirvac CEO Campbell Hanan said the investment gives Mirvac immediate scale in the land lease lifestyle sector for seniors. It has already identified “six to eight” sites in master planned communities.
Serenitas will operate as a joint venture after the acquisition, to be completed in 3Q24, with Mirvac and PEP holding 47.5% stakes each, with Tasman Capital Partners owning the remaining stake. Serenitas CEO, Executive Chairman and Founder Rob Nichols is Managing Partner and Co-Founder of Tasman Capital Partners. He will remain at Serenitas.
Campbell said that exit strategies exist in the joint venture and there is the opportunity “to get to 100% at some point”. He said PEP had approached them in the venture.
The sector is set to grow on the major influx of Baby Boomers, especially in the lower income brackets.
Serenitas has a portfolio of 27 land lease communities with over 6,200 sites, including over 4,200 occupied and around 2,000 sites to be developed, 98% of which are development approved.
With the investment, Mirvac remains behind US-owned Hometown Australia, Gold Coast-based Palm Lake Group and ASX-listed Ingenia Communities in market size.
Serenitas charges about an average $460,000 for a home, a 20% discount to the local region’s median house price.
Mirvac said the cap rate, or yield, of the 4,200 operational sites was 4.5%. It expects “lower double growth” on capital and is likely to seek a higher price for the homes.
It will appoint two board members to Serenitas.
The SOURCE: Serenitas has proven development approval expertise at a time when gaining DA approval can be difficult, a fact not lost on Mirvac and PEP.
