Scape Eyes Brookfield’s Aveo in $3B Deal

Scape is in advanced talks to buy retirement living group Aveo in a deal exceeding $3 billion, aiming to expand its healthcare and residential portfolio, but finalising capital partnerships could complicate the outcome. The student accommodation provider appears to be leading an acquisition process after outbidding a rival investor by at least 10%, but still needs clarity on investment backing to close the deal.

The retirement village operator Aveo has been on the market since last year, with early suitors including real estate managers, superannuation funds, and global institutions. While Charter Hall exited the bidding early, Scape and Singaporean investor GIC remained in the running until the final stages. Scape, reportedly advised by Deutsche Bank and Macquarie Capital, now must determine which financial partners will join the acquisition, and whether any new investors will be brought in.

Aveo was acquired by Brookfield in 2019 for around $1.3 billion, or $2 billion including debt. Founded in 1970, the company owns 67 retirement villages along Australia's east coast and uses a deferred management fee model, with alternative upfront payment options. Its market position is dominant at 4%, outperforming others like Lendlease and Bolton Clarke. With its large footprint, the seller has set high price expectations, inspired partly by Stockland’s $1 billion sale of its own retirement business in 2022.

If successful, the Aveo purchase could position Scape as a more significant player beyond student housing, accelerating its entry into senior living amid rising investor interest in healthcare and aging population assets. The deal also signals continued momentum in the sector, although shifting capital commitments and uncertain joint-venture structures could slow progress.

Source: The Australian, Market Screener, The Urban Developer