Today’s confirmation of the sale of Aveo is dated 26 June 2025. Brookfield took the keys to Aveo in November 2019, or four years and seven months ago. On first blush, they made $2.58 billion profit in those 55 months, or did they make a lot more?
The sale delivered roughly $47 million per month but behind the scenes there is a better story.
Brookfield recruited Tony Randello from the Managing Director role at Lendlease Retirement to put the Aveo house in order and build value fast. He did both.
Think about this: along the way, Tony sold off 14 villages in South Australia and seven in NSW. So, Brookfield got three times its purchase price in this sale with far fewer villages, and it banked the village sale cash.
When Tony took over, he had a massive number of empty village homes. We think around 2,000 of them, thanks to the still lingering impact of the June 2017 Four Corners report centering on Aveo (“Bleed them Dry Until they Die”).
With a re-energised marketing and sales drive over the four years, they have been selling those homes down and pocketing the pure profit. In 2023, they sold 1,444 homes and last year around 1,500 homes. (With Aveo’s average occupancy of nine years, they should only have 1,110 homes to sell).
Aveo has also been an aggressive marketer, with his team not hesitating in its promotional spend. And it has paid off not only in sales of units, but also price escalation. From our view, Aveo has outpaced the market on price increases while still delivering amongst the now best occupancy rates (95%+).
So, Aveo is in significant profit each year, servicing its debt and paying dividends to Brookfield. At the same time, Tony Randello also made sure the assets were kept in top shape, allocating $200 million in refurbishments of existing village infrastructure. I am sure Scape has noted this.
For Brookfield, they financed the $1.27 billion purchase price with $1 billion in bank debt plus $300 million of their own cash. Along the way, they refinanced this debt with banks but now for $1.3 billion, allowing them to pocket the $300 million they had put in, to now use elsewhere.
It has been a masterclass by Brookfield in how to identify an unloved diamond at the bottom of the demand curve, but also to pick the right management and then back them to perform.
For residents, it has been a happy journey as they got the stability of the giant Brookfield and an experienced management team.
Win win.
