Aware Super has announced the buyout of Australian retirement housing company Oak Tree Group after acquiring the remaining 30 per cent of the business.
Its initial investment in 2017 with a 70 per cent equity stake was Aware Super’s first investment in the retirement living sector and one that the fund said is underpinned by strong demographic tailwinds, including an ageing population and expanding middle class wealth.
According to Aware, it is now one of the country’s largest owners of retirement living assets following the buyout of Oak Tree retirement villages, which houses more than 1,900 residents and boasts a portfolio of 48 villages with approximately 2,550 independent living units (ILUs) in operation or development.
The group focuses on well-located sites along the eastern seaboard in key regional markets across Queensland, NSW, Victoria, and Tasmania.
The fund also confirmed that the transaction has extended its $5 billion exposure in the living sector globally, which includes its current $850 million commitment in the build-to-rent sector in Australia and investments in the United States, the United Kingdom, the Netherlands, and Spain.
Commenting on the buyout, Aware Super head of property Alex Misev said that Oak Tree Group aligned with the fund’s strategic focus of generating strong returns for members, while also catering for the future accommodation needs of Australia’s growing population of retirees.
“This is why we believe Oak Tree Group is an exciting opportunity to invest further capital in Australia’s retirement living sector,” Mr Misev said.
“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.”
Mr Misev clarified that Oak Tree Group’s secured development pipeline constitutes over 1,000 ILUs.
“We have multiple villages experiencing waitlists 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,” he added.
“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,” Mr Misev concluded.
As of 1 July 2023, Aware Super had $160 billion in funds under management.
