South Korea’s state-run pension fund, the National Pension Service (NPS), has partnered with Australia’s student housing specialist Scape to clinch a record A$3.85 billion ($2.5 billion) deal to acquire senior living operator Aveo Retirement Homes Ltd. from Canada’s Brookfield Asset Management Inc.
The transaction value marks Australia’s biggest direct real estate deal ever, edging Blackstone’s A$3.8 billion sale of the Milestone Logistics portfolio to ESR and GIC in 2021.
According to investment banking industry officials on Monday, Brookfield Asset has signed a deal, agreeing to sell the Aveo Group Ltd. unit to The Living Company, the parent of student housing specialist Scape.
The NPS, Korea’s largest institutional investor, is a co-investor alongside Scape in the acquisition, executed through The Living Company.
The transaction sees Brookfield selling 65 retirement villages across Queensland, New South Wales, Victoria and Tasmania to The Living Company, as the owner of Australia’s largest student housing business expands into a new segment of the housing market.
Brookfield took then-Australian Stock Exchange (ASX)-listed Aveo private in 2019 in a deal which valued the company at A$1.3 billion, before investing another A$500 million on improvements, with the fund manager positioning the sale as a successful turnaround of a management-intensive real estate business.
For The Living Company, buying Aveo is in line with the group’s expansion beyond its roots as the parent company of Scape.
Aveo ranks second among Australian retirement village operators with a 4% market share, after Lendlease’s Keyton, which controls the country’s retirement village sector with a 6% market share.
NPS’ SECOND PARTNERSHIP WITH SCAPE
The NPS’ investment in Aveo marks its second partnership with Scape in less than a year.
Earlier this year, the Korean pension fund committed A$700 million to a 1,000-unit student housing development project by Scape in Sydney, underscoring its growing appetite for residential alternatives amid a broader diversification of its overseas portfolio.
“In Australia, partnering with local operators is essential for foreign institutional investors not just to navigate regulatory complexity but also to benefit from favorable tax treatment,” said a senior executive at a global asset manager familiar with the deal. “For the NPS, this is likely just one of several such collaborations going forward.”
The transaction also highlights a structural trend toward convergence in residential sub-sectors, with The Living Company emerging as a vertically integrated brand, housing various forms of institutional-grade rental assets under a unified operational framework.
The NPS is one of the world’s largest pension funds with assets under management at 1,228.4 trillion won ($904.6 billion) at the end of April.
By Gyeong-Jin Min
min@hankyung.com
In-Soo Nam edited this article.
