The Blackstone Group is set to acquire a portfolio of retirement villages in New Zealand from the Sydney-headquartered listed developer and infrastructure company Lendlease via its special situations Tactical Opportunities Fund.
The transaction to acquire the five fully-completed villages is expected to close in the next several months pending regulatory approvals.
The financial terms of the deal were not disclosed. A report in The Australian however has speculated the deal could be worth around A$100 million (€64 million; $71 million). Goldman Sachs was running the sales process for the portfolio on behalf of Lendlease.
The portfolio buyout is understood to bring with it 141 employees along with the five retirement villages with 1,000 units and 1,200 residents.
Blackstone’s Tactical Opportunities division pursues investments that do not fit the mandate of the other business lines run by the firm. Though the underlying asset in the transaction is real estate, other terms of the deal made it a more suitable buy for the special situations division instead of the private real estate investing unit. A source close to the deal explained to PERE that the firm has acquired not just the properties but also the occupation rights agreements, which are different from rental contracts.
“The nature of the income here is derived from a combination of deferred management fees and future capital gains which are realized on the resale of the units once the occupant vacates. This specialized and highly structured nature of the income stream suits the Tactical Opportunities mandate,” said the source.
Ageing demographics in New Zealand have made investing in a niche asset class like retirement homes an attractive proposition for investors. Blackstone’s Tactical Opportunities division has prior investment experience in this asset class. In late 2014, it invested A$150 million in the Perth-based National Lifestyle Villages, a developer of retirement communities in Australia.