Scape signs biggest-ever direct real estate deal; buys Aveo for $3.85b
Craig Carracher and Stephen Gaitanos’ Scape will sign a company-transformational deal to buy Brookfield-owned retirement living operator Aveo on Tuesday, marking one of Australia’s largest-ever direct real estate transactions.
Street Talk can reveal Scape and co-investor, South Korea’s National Pension Service, have agreed to pay $3.85 billion on an enterprise valuation basis. As part of the deal, Scape will bring all its assets – including student living, build-to-rent and retirement living – under the combined brand The Living Company.
Scape chief executive Stephen Gaitanos led the transaction alongside Carracher, with sources stressing that one or both were present at nearly every meeting between the two parties.
The duo’s all-star advisory line-up included Deutsche Bank’s head of real estate Amit Sheshinski, Macquarie’s head of healthcare Manny Petros and real estate banker Igor Pavlov. Clifford Chance partner Philip Podzebenko and PwC’s Chris Aboud were on the tools for tax and legals.
Of note, Street Talk understands Aveo’s well-regarded boss, Tony Randello, will stick with the business as it changes hands from Brookfield to Scape.
Record smashing
This column revealed Scape had secured exclusivity in April. The deal value smashes that of the second-largest direct real estate deal: Blackstone’s 2021 sale of Milestone Logistics to global real estate firm ESR for $3.8 billion.
Scape’s partner on the deal, NPS, is the third-largest pension fund in the world with over $US800 billion ($1.26 trillion) in assets. Aveo is its second deal Down Under this year after it acquired a stake in Andrew Lockhart’s non-bank lender Metrics Credit Partners in March.
It’s a strong result for Brookfield, still reeling from its $1.3 billion loss at private hospital operator Healthscope. It also makes the end of a year-long sale process run by Barrenjoey, Morgan Stanley chairman Tim Church and Allens partners Chris Blane and Vijay Cugati, that saw Scape lock horns with Singapore’s sovereign wealth fund and prolific investor in Australian real estate assets GIC.
Ruban Kaneshamoorthy, head of Brookfield Property Group, oversaw the investment for the Canadian giant, which swept Aveo off the ASX boards in 2019 for $1.3 billion when the sector was under regulatory pressure. It invested $200 million between 2020 and 2024.
Aveo was shopped with a 3.4 million square-metre portfolio of 10,000-plus units in premium locations across the East Coast, 65 villages, and more than 3000 units in its pipeline, according to the sale flyer.
