Australia's largest student accommodation provider is reported to be close to announcing its purchase of the second largest retirement village operator, which was put for sale by its owner Brookfield Asset Management in June last year. The buyer appears to have secured bank financing to fund the $2 billion-plus acquisition.
Stephen Gaitanos, the Co-Founder, Managing Director and Group CEO of Scape Australia. revealed last month that the group had created a new seniors accommodation brand Living Co.
"As we think about senior housing, that sector in itself is too fragmented and it needs a bit of leadership from someone to kind of disrupt,” he said. “There isn’t a customer-centric model that can provide the service that our seniors need. And frankly, we shouldn’t even be calling that because 75-year-olds are much younger, fitter, healthier than they’ve ever been,” Stephen told Mingtiandi’s Singapore Forum.
The Australian has reported that Scape, advised by Deutsche Bank and Macquarie Capital, has landed a deal to lock in extremely cheap debt funding with banks keen to put money to work because their client books are falling.
"This is at a time when private equity deals are going backwards, so any new deals that prove to be financing opportunities are highly sought after," reported the newspaper.
"In one regard, the weaker economy is playing a part, but it’s largely to do with the higher interest rates being a deterrent for corporates and private equity firms to borrow."
Scape is reported to have been given exclusive rights to buy Aveo and its 67 retirement villages along the Eastern Seaboard. With a 4% market share ahead of Keyton and Bolton Clarke, Aveo has a Deferred Management Fee model where income is back-ended, but also offers an upfront payment or bond payment option.
Price expectations for Aveo were high after Stockland sold its retirement living business in 2022 for about $1 billion to private equity firm EQT Infrastructure.
