Blackstone buys New Zealand retirement villages from Lend Lease
The Blackstone Group has agreed to buy a portfolio of five retirement villages in New Zealand from Australia-listed property and infrastructure group Lend Lease Group.
The size of the transaction was not disclosed. According to a statement, Blackstone's tactical opportunities division executed the deal, which involves four fully-completed villages in Auckland and one in Mt. Maunganui.
The investment represents a play on New Zealand's changing demographics, with the number of people aged 75 and over expected to double over the next 20 years.
Blackstone has taken a similar approach in Australia, committing $150 million to retirement village developer National Lifestyle Villages in late 2014. Australia's 85-and-over demographic is projected to grow at 4.7% per annum through 2044, while the overall population increases by 1%. Retirement village penetration is around 5%, compared to 10% in the US.
Lend Lease generated revenue of A$13.3 billion in the 2015 financial year across all its businesses, and had nearly 14,200 units across 78 retirement villages in Australia specifically. In recent years the company has selectively shed non-core assets, selling its aged care unit - a business more aligned with healthcare than real estate - to Archer Capital in 2013.
Other private equity investors have been drawn to both retirement villages and aged care. Also in 2013, Quadrant Private Equity completed its exit from New Zealand retirement village operator Summerset - having taken the company public two years earlier - and swiftly acquired a majority stake in Australian aged care provider Estia Health. Estia listed in 2014.
More recently, New Zealand Superannuation Fund (NZ Super) and infrastructure investor Infratil bought retirement village operator RetireAustralia from J.P. Morgan Special Opportunities Group and Morgan Stanley Real Estate. They saw it as an opportunity to introduced integrated aged care services into an Australian retirement sector that is largely focused on retirement villages.
The Blackstone-Lend Lease transaction still requires regulatory approval and is expected to close in the next few months.
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