It was revealed in the Financial Review this week that Australian student accommodation giant Scape is now the exclusive bidder to buy Aveo, for an indicated $3.5B. They will bring fresh thinking to the retirement village sector.
Take a step back and look at Scape. A lawyer, Craig Carracher, and a banker, Stephen Gaitanos, conceived Scape in 2013. In 12 years they have created 38 buildings and 18,500 student apartments across four cities. They know how to find the cash, then build and sell.
In student accommodation, Scape has been a disrupter in what was a sleepy and unimaginative sector. Scape created energy, colour and verve in each new building.
As importantly, they designed new operational support models for their student residents.
Just like retirement villages, but more dynamic, the customers of Scape buildings are mainly international students, often going through extremely difficult transitions from a caring, protective family to being alone in a new country, with immense pressure to perform in studies and adjust to communal living.
Scape pioneered really strong support mechanisms for these students, as well as the social programs that kept them engaged and positive.
What can they do for 67 Aveo retirement villages which have undergone a $200 million plus renovation program over the past four years leading to a new NPS high of 57?
Scape understand what it is to manage a resident population like Aveo.
They will bring fresh management that works fast and is prepared to innovate.
Think services offered, think contracts, think Baby Boomers who want more and have the cash and willingness to pay.
Going on Scape’s past record, they will create new value in the village sector, and with it the market will follow. This will raise the tide for all. An exciting time – if Scape’s final due diligence is successful.
