Looking outside of the U.S. seniors housing market, it’s obvious that the sector is a popular target in markets around the world. Just look at Ventas’ doubling down on the Canadian seniors housing market with its C$2.4 billion portfolio acquisition of 31 retirement communities in Quebec earlier this summer, nearly doubling its portfolio from 41 properties to 76, with the NOI of those properties expected to make up 21% of its entire SHOP NOI. For them, Canada has been a very good performer.
Australia has attracted the interest of Canadian investment fund Brookfield, which is spending A$1.27 billion ($860 million), on Aveo, a Sydney-based company that owns and operates 94 retirement communities with locations in Queensland, New South Wales, South Australia, Victoria and Tasmania, housing more than 13,000 residents. A large percentage of its portfolio is over 25 years old and is in need of capital improvements. Aveo also has experience in China, making a 30% investment, providing the intellectual property and managing a A$326 million retirement community with supportive care that opened in December 2015 about one hour outside of Shanghai.
Brookfield will offer cash or scrip to buy outstanding Aveo securities at A$2.195 per security, representing a 28% premium to Aveo’s last closing price in mid-February 2019 when it received a number of bids for its business. Aveo’s board unanimously accepted Brookfield’s offer on August 14. The deal is expected to close by the end of the year.
