Prudential, Sunrise to invest $1bn in senior living communities

The real estate and investment advisory business of Prudential Financial has won a beauty contest to help develop senior living communities in the UK.

Prudential Real Estate Investors has signed a joint venture agreement with Sunrise Senior Living giving PREI 80 percent ownership of a new vehicle that will develop and operate up to 18 senior living communities in the UK over the next four years.

Under the terms of the deal, PREI will invest up to £80 million ($160 million) of equity in exchange for a majority stake in the venture. For its part Sunrise will invest £20 million ($40 million) and will operate the properties post-development.

With leverage, a total of £500 million ($1 billion) is expected to be spent on the new developments.

Virginia-based Sunrise first broke into the UK in 1999 when it opened its first property. It now owns 11 properties with a further 18 communities in the pipeline or under construction. The company also has communities in Germany and is looking at other locations on the Continent.

In a statement today Sunrise confirmed it had selected Prudential after running a competitive process to select a joint venture partner. The two firms have worked together in the past, forming a joint venture in 2002, followed by additional funding commitments in 2005 and an associated agreement to develop properties in Germany.