Barrenjoey and Morgan Stanley are expected to launch the sales process for Aveo in the next three weeks, say sources, hoping the sale of Arvida to Stonepeak for $NZ2bn ($1.8bn) last month provides some tailwinds.
Aveo, an Australian retirement village company that operates on the east coast, is believed to be seeking a price around $3bn.
Keyton, owned by Aware Super, APG and Lendlease, could be interested.
Apparently, it looked at industry rival RetireAustralia almost a year ago, offering about $700m for the business.
As earlier reported, infrastructure funds are also being courted as potential buyers of Aveo.
One is Stonepeak, which has just agreed to buy the New Zealand retirement village operator Arvida with help from Goldman Sachs, demonstrating that such businesses have appeal to investors searching for low risk, stable yield opportunities.
However, real estate companies are still expected to be front and centre.
Another likely to look is EQT, through its Levande unit, comprising the former Stockland retirement business.
Aveo has a deferred management fee model where income is back-ended, and infrastructure companies are more willing to underwrite the annuity of the cashflows over time.
Private equity groups can’t be excluded, but with the high price expectations, infrastructure buyers are better positioned given their lower cost of capital.
Brookfield purchased the then listed Aveo in 2019 for $1.3bn, or $2bn including debt.
Aveo describes itself as Australia’s premier retirement living provider with 12,000 residents nationally and state-of-the-art facilities.
It also offers personal and flexible home care.
Established in 1970 and headquartered in Sydney, it has 86 retirement facilities across the eastern seaboard, including independent living units and serviced apartments.
Brookfield has invested in the business since its acquisition under the leadership of Aveo’s chief executive Tony Randello.
It has 4 per cent market share, ahead of Lendlease with 1.9 per cent and Bolton Clarke with 1 per cent, according to IBISWorld.
Helping Brookfield with the sale of Aveo is the shortage of housing stock in major capital cities, leading to increasing house prices, and looming interest rate cuts.
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