Living Well

AUSTRALIAN PROPERTY INSIGHTS

LIVING WELL

A MARKET OF TWO SPEEDS: TIGHTLY HELD AND EPISODIC CAPITAL MARKETS

The market presents significant opportunities for consolidation, given the current low levels of institutional ownership and this will be an increasing theme in the market. Our view is that investors should consider building optionality through smaller, bolt-on acquisitions, joint ventures, or development pipelines that position them advantageously ahead of larger liquidity events. Beyond private sector investment activity, the not-for-profit sector is also seeing a clear theme of consolidation. There has been M&A activity with not-for-profit organisations acquiring within their peer group and also from for-profit organisations. A good example is the 2024 acquisition of 13 Aveo communities from Brookfield by UnitingCare. Not for profits can be an important source of liquidity as their drivers are less cyclical and they benefit from tax concessions and exemptions, allowing them to be competitive. Scape acquired the Retirement Living platform Aveo from Brookfield earlier this year under its new brand The Living Company, with South Korea’s largest pension fund NPS co-investing. The transaction was Australia’s largest ever direct real estate deal and the inception of The Living Company, focusing on assets across all the Living sub-sectors, illustrates how institutions are increasingly approaching diversified Living strategies across the entire housing spectrum.

The capital markets landscape for Australian Retirement Living is defined by a distinctive interplay between structural fragmentation and the growing consolidation driven by institutional investors. As a result, investors may encounter extended periods of subdued transactional flow punctuated by sporadic opportunities to acquire scale through rare large portfolio divestment. This dynamic constrains the volume of transactions in a typical year and leads to episodic surges, whereby one or two large-scale portfolio transactions skew annual figures. Recent years have followed this pattern. In 2023–25, despite wider capital market caution, the sector recorded several notable deals: • The Living Company’s acquisition of Aveo from Brookfield for AUD 3.85 billion. • Brookfield’s divestment of 13 Aveo villages in South Australia to UnitingCare for AUD 122 million. • Tulich Communities’ AUD 82 million exit, comprising over 400 ILUs and aged care beds • Bolton Clarke’s acquisition of four RCA villages, demonstrating the ongoing competitiveness of not-for-profit buyers. These deals underscore a key theme: sector liquidity is selective but strategic – when assets do come to market, they tend to attract concentrated interest, often from aligned investors with existing operational exposure or long-term mandates.

CHART 8

RETIREMENT LIVING TRANSACTIONS (2015–2025)

$4,500

The Living Company / Aveo

$4,000

$3,500

Aware/Lendlease EQT/Stockland

Brookfield/Aveo

$3,000

$2,500

$2,000

$1,500

APG/Lendlease

Aware/ Lendlease

$1,000

$500

2015 2016 2017 2018 2019 2020 2021

2022 2023 2024 2025

Source: Cushman & Wakefield Research

CUSHMAN & WAKEFIELD