Lack of retirement board members holding Aware Super back from investing. Heading overseas instead.

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It is not something you would immediately think about, but one of the factors holding Aware Super back from investing its $150 billion in more retirement villages is lack of potential board members.

In SATURDAY last weekend Damien Webb, Head of Income and Real Assets, told us that Aware Super likes retirement living for its long-term fundamentals.

But he said that while Australia has many talented property executives, more depth in the retirement living pool would be welcome.

“When we speak to the recruiters and you ask for research on retirement villages and senior living directors, it can often be a relatively limited scan,” he said.

“I would love to see more availability of the human capital around the governance of these assets. But it’s still an emerging field in terms of governance.”

Aware Super purchased 70% of Oak Tree Retirement villages in 2017 followed by 25% of Lendlease Retirement in February this year, paying $420 million.

Now focusing overseas

The other issue is the quality of the operators – and their leaders – in the sector.

Despite their differences in size and location, Lendlease and Oak Tree both had a common attraction for Aware Super: they are market leaders in their own way.

“Lendlease is the biggest operator in the country, with a quality management team and a very experienced developer,” said Alek Misev, Aware Super’s Portfolio Manager of Property.

“Oak Tree, again, a market leader but in regional areas with the best brand visibility.”

Do other local operators have the same appeal?

For Aware Super, the answer is that they are not seeking other operators locally.

The group is now looking to the UK and the US for its next retirement village investment.

“We won’t be doing further acquisitions in the Australian marketplace any time soon, but certainly watch this space overseas,” Damien stated.

They are aware of the rapid expansion of retirement villages in the UK and France.

“We have certainly had some conversations around opportunities in Asia as well.”