Thursday, 17 August 2023
Aware Super is now one of Australia’s largest owners of retirement living assets after taking full ownership of Oak Tree retirement villages which currently houses more than 1,900 residents and has a portfolio of 48 villages with c.2,550 independent living units (ILUs) in operation or development along the eastern seaboard.
By acquiring the remaining 30% in Oak Tree Group, Aware Super has extended its $5 billion exposure in the living sector globally, which includes its current $850 million commitment in the build-to-rent sector in Australia, and large investments in the United States, United Kingdom, the Netherlands and Spain.
The fund first invested in Oak Tree Group in 2017 with a 70% equity stake, with the founders retaining the remaining equity. This was Aware Super’s first investment in the retirement living sector, and it remains a sector of high conviction for the fund, underpinned by strong demographic tailwinds including the ageing population and expanding middle class wealth.
Aware Super Head of Property Alek Misev said the fund’s commitment to Oak Tree Group was testament to the quality of the operational villages and development pipeline, the highcalibre existing management team and their clear focus on delivering a high-quality resident experience.
“Aware Super is not only one of the nation’s largest super funds committed to delivering the strongest possible risk-adjusted returns to its 1.1 million members, but a leader in the retirement space with an innate understanding of what today’s retirees need to ensure they have a comfortable and secure retirement,” he said.
“This is why we believe Oak Tree Group is an exciting opportunity to invest further capital in Australia’s retirement living sector – it is aligned to our strategic focus of generating strong returns for members while simultaneously catering for the future accommodation needs of Australia’s growing population of retirees.”
Mr Misev added that Oak Tree Group exemplified Aware Super’s focused strategy on direct investments into operating businesses, coupled with our strong internal capabilities.
He added the Oak Tree Group has a secured development pipeline of over 1,000 ILUs which will drive future growth and contribute to the stable returns currently generated from the c.1,500 operational ILUs.
Mr Misev also highlighted the quality of the portfolio, with a boutique offering to residents and well-located sites along the eastern seaboard in key regional markets across Queensland, New South Wales, Victoria and Tasmania, which are all close to retail and other amenities.
“We have multiple villages experiencing waitlists, which confirms an undersupply in quality units catering for the 55-plus cohort who will represent about 31% of our national population by 2030,” he said.
“Australia’s Baby Boomer generation is wealthier than previous generations and combined with the strong demographic tailwinds, makes the retirement living space a high conviction sub-sector within our $5 billion living portfolio.”
Mr Misev also thanked Altis Property Partners for its contribution to a strategic review of Oak Tree Group and signalled their continued involvement in supporting the group’s management team as it embarks on its significant growth trajectory.