Sale of $3bn Aveo business unlikely by year’s end

Aveo has 86 retirement facilities across the eastern seaboard.

The sale process for Brookfield’s $3bn-plus retirement living business Aveo is believed to be getting pushed into the new year, with time running out to achieve a result by Christmas.

DataRoom understands Brookfield has been running a so-called education process, where it assesses the views of suitors on price and level of interest.

Once it is confident there is enough interest to run an auction, it will proceed with a formal sale.

The promotion of the business has already started, with a flyer out and bankers from Barrenjoey and Morgan Stanley reaching out to prospective buyers.

Brookfield purchased the then listed Aveo in 2019 for $1.3bn, or $2bn including debt.

Aveo, a retirement village operator on the east coast, is eyeing infrastructure funds as prospective buyers, which could include groups like Stonepeak and EQT. Keyton, owned by Aware Super, APG and Lendlease, could be interested.

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.

Established in 1970, Aveo has 86 retirement facilities across the eastern seaboard, including independent living units and serviced apartments.

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 capital cities.