Aveo’s owner secures record retirement living funding deal
Aveo owner locks in $2bn ESG mega-deal
- Finance first: Retirement living’s biggest sustainability-linked loan deal
- Green targets: Solar, batteries and all-electric homes across Aveo villages
- Nature + wellbeing: Biodiversity restoration and mental health training
- ESG shift: Sustainability now tied directly to funding costs
A multi-loan funding package is set to accelerate Environmental, Social, and Governance (ESG) outcomes across The Living Company’s retirement living portfolio.
Retirement Living Core Fund (RLCF), the fund behind retirement village operator Aveo, which is now part of the recently acquired seniors living arm of The Living Company, has converted $2 billion of financing into Sustainability Linked Loans (SLLs) to support delivery of its ESG strategy.
The discount of SLLs is strictly negotiated on an individual, per-deal basis, and for The Living Company, it is a maximum six basis points per year off the interest rate providing they achieve 100% of their targets.
Applied across $2 billion of borrowings, our back-of-envelope calculations suggest the sustainability-linked discount could cut interest costs by roughly $1.2 million a year.
Completed in May 2026, the transaction is believed to be the largest SLL financing in the Australian retirement living sector, setting a new benchmark for sustainable finance in the industry.
The facility was coordinated by ANZ, ING and Westpac as Joint Sustainability Coordinators, with DNV providing a Second Party Opinion. In signing the SLLs, The Living Company will be incentivised to achieve a series of ambitious ESG targets linked to an interest-rate adjustment mechanism, reinforcing accountability and delivery against measurable sustainability outcomes.
This transaction follows The Living Company’s broader sustainable financing momentum, including the $2.8 billion Scape Core Fund SLL completed in December 2025, and the launch of a new Sustainable Financing Framework in January 2026 spanning student, rental and retirement living.
Sustainable financing across The Living Company platform now totals $5.7 billion and is expected to reach $7.3 billion shortly.
RLCF’s SLLs incorporate four key ESG targets:
- Carbon emissions reduction – installation of solar panels across 30 Aveo retirement living villages Australia-wide and four battery energy storage systems by 2026. This initiative is in collaboration with village residents and results in a mutual benefit by reducing the financial impact of powering community assets through green initiatives. This will be followed by decommissioning gas infrastructure and transitioning 150 independent living units to all-electric systems by the end of 2028.
- Green Star Performance – certification of more than 80% of the retirement living portfolio under Green Star Performance between 2026 and 2028, representing a sector-first application of this rating system within a sustainability-linked loan.
- Biodiversity – delivery of eight projects over three years to achieve a verified “biodiversity net gain” through the restoration of native habitat, demonstrating measurable improvements in ecological conditions at selected villages.
- Mental Health Training – continued implementation of Mental Health First Aid training across the workforce, with a target of training 10% of all staff and 50% of managers by 2028 to better support resident wellbeing.
The Living Company’s Head of ESG, Chris Nunn, said the SLL structure reflects the growing maturity of sustainability practices within the retirement living sector.
“These SLLs embed sustainability into the core of our financial strategy, ensuring our ESG priorities are aligned with measurable outcomes and supported by strong governance and accountability,” Chris said.
“As the retirement living sector evolves, initiatives like this demonstrate how operators can deliver both commercial performance and meaningful environmental and social impact.”
