A 50/50 consortium between listed investment group Infratil and the New Zealand Super Fund is buying the retirement accommodation group RetireAustralia from J.P. Morgan for $640.2 million.
RetireAustralia, the largest privately-held pure-play retirement operator in Australia, has 28 villages across New South Wales, South Australia and Queensland and more than 3,700 independent living units and apartments.
Accommodation for the ageing is a growth industry. Australia’s 85+ population is forecast to grow at 4.7% a year to 2044. This will mean an extra 20,000 to 65,000 85 year olds a year.
Marko Bogoievski, CEO of Infratil, says the business RetireAustralia has the potential to become the market leader in the retirement living sector.
“RetireAustralia provides a strong platform in an Australian sector that offers very attractive long-term growth prospects,” he says.
Underlying earnings before interest and tax for the June 2015 financial year are forecast at $35 million to $40 million.
The New Zealand Superannuation Fund is a NZ$27 billion sovereign wealth fund established by the government to partially pre-fund the future cost of pension payments.
Infratil is an owner and operator of businesses in the energy, airport, public transport, and social infrastructure sectors. The company owns Wellington Airport in New Zealand and also has an investment in Metlifecare, one of New Zealand’s leading providers of retirement and aged care living facilities.