Aware Super secures retirement housing deal

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Aware Super has become one of Australia’s largest owners of retirement living assets after acquiring full ownership of Oak Tree Retirement Villages.

The super fund has obtained the remaining 30 per cent in Oak Tree Group, after initially investing with a 70 per cent equity stake in 2017. 

The deal represented Aware Super’s first investment in the retirement living sector, which is uplifted by strong demographic tailwinds such as the ageing population and growing middle-class wealth.

With over 1,900 residents, Oak Tree Group holds a portfolio of 48 community villages and approximately 2,550 independent living units (ILUs) in operation or development across Australia’s east coast.

Aware Super continues to expand its $5 billion global exposure in the retirement living sector. This includes its $850 million commitment to the build-to-rent sector in Australia and global investments in the UK, US, the Netherlands, and Spain.

Alek Misev, head of property at Aware Super, believed that acquiring Oak Tree Group reflected the fund’s focus on delivering operational villages and 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.”

Misev added that the retirement housing group has a secured development pipeline of more than 1,000 ILUs to underpin long-term growth.

Moreover, the pipeline will support the stable returns currently being generated from some 1,500 ILUs in operation.

He continued: “We have multiple villages experiencing wait lists which confirms an undersupply in quality units catering for the 55-plus cohort who will represent about 31 per cent of our national population by 2030.

“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.”

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