Aware Super increases stake in Lendlease Retirement Living Trust with $490m investment

Aware Super increases stake in Lendlease Retirement Living Trust with $490m investment

Photo courtesy of Lendlease website. 

One of Australia’s largest superannuation funds Aware Super has acquired a further 24.9 per cent stake in the Lendlease Retirement Living Trust for $490 million.

The purchase comes a year after Aware Super acquired an initial 25 per cent of the portfolio of retirement villages run by Lendlease for $458 million.

Aware Super now holds 49.9 per cent of the property portfolio shares, which comprises more than 13,000 units within 75 retirement villages and is home to roughly 17,000 residents across Australia.

After the sale, the business will continue to trade under the Lendlease Retirement Living brand, with Lendlease (ASX: LLC) retaining 25.1 per cent of the ownership, while Dutch pension asset manager, APG Asset Management, holds the remaining 25 per cent interest.

“Today’s announcement that Aware Super will acquire an additional interest in the Lendlease Retirement Living Trust further cements the relationship between our two organisations,” Lendlease Global CEO Tony Lombardo said.

“Strategically, we flagged some time ago our intent to further reduce our ownership of Retirement Living, consistent with our strategy to reallocate capital towards the delivery of our $112 billion development pipeline and grow our investments platform.”

The sale follows Lendlease’s strategy of winding down its exposure in the business, which generated revenues of $188 million during FY21 and resulted in a $45 million overall profit. This marked improvement from 2020, when the company suffered a $29 million loss.

“The overriding focus of the Retirement Living business is to provide current and future residents the highest quality residences, services and support,” Lendlease Australia CEO Dale Connor said.

“Aware Super’s acquisition of an additional interest in the Lendlease Retirement Living Trust is a vote of confidence in the quality of our team and their service offering and further supports the execution of our Australia strategy.”

Previously known as First State Super until September 2020, before a merger with VicSuper and WA Super, Aware Super manages $150 billion in savings for more than a million members across Australia.  

“We believe this is an exciting opportunity for Aware Super’s members to increase our interest in a high-quality investment that makes a real difference to the lives of retirees every single day,” Aware Super Chief Investment Officer Damian Graham said.  

“Through our deep relationship with Lendlease and our years of experience supporting Australians as they prepare for and transition to retirement, we see enormous potential for the future of retirement living.”

The announcement further strengthens the relationship between Lendlease and Aware Super, including the Lendlease Americas Residential Partnership, which invests in projects in Chicago, Boston, New York and Los Angeles.

Membership of the superfund comprises workers in health care, education, aged care and disability support sector, police, fire and emergency services and the public sector.

The agreement follows a ruling by The Federal Court of Australia against Aware Super subsidiary, Aware Financial Services Australia, last month to pay a pecuniary penalty of $20 million for contravening Australia’s financial services laws.

The Court found that Aware Financial Services accepted payments from Advice Clients between 21 August 2014 and 30 June 2018, when there were reasonable grounds to believe that it would not be able to supply those reviews to all such clients within an annual period.

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