Australia's Mirvac to acquire land lease operator Serenitas for $643 mln (updated)

Mirvac

18/10/2023 02:15

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      Mirvac to make A$300 mln initial investment
    

        * 
      Deal settlement expected in Q3 of FY24
    

  
 (Adds analyst comments and share moves)
    By Ayushman Ojha
       Oct 18 (Reuters) - Australia's Mirvac Group  MGR.AX 
said on Wednesday it would buy land lease operator Serenitas
from Singapore's sovereign wealth fund GIC for A$1.01 billion
($642.76 million) along with Pacific Equity Partners Secure
Assets (PEP) and Tasman Capital Partners.
    Serenitas will operate as a joint venture following the
acquisition, with Mirvac and PEP holding 47.5% stakes each,
while Tasman Capital Partners will own the remaining stake.
    Founded in 2017 as a land lease community business,
Serenitas has its assets in Australia.
    The acquisition is a good move from Mirvac's perspective
strategically, given that it has lots of offices and high-end
apartments, said Winston Sammut, an investment manager at
Sequoia Financial Group.
    "This reduces their exposure to those difficult property
sub-sectors. It's a good approach," Sammut said.
    The deal comes at a time of increased investor interest in
the Australian housing market amid critical undersupply,
affordability challenges, and attractive benefits provided by
retirement homes.
    "This acquisition expands our residential offering,
propelling Mirvac to become one of the largest owners in the
attractive land lease community sector," said CEO Campbell
Hanan.
    The property developer will make a A$300 million initial
investment, with A$240 million funded on settlement and A$60
million deferred for 12 months.
    "The company appears to have identified investing in
lifestyle communities as a potential avenue for growth, and so
the acquisition of Serenitas fits the bill in that regard," said
Tim Waterer, chief market analyst at KCM Trade. 
    Mirvac will fund the deal from existing liquidity sources
and recent asset disposals, the company said, adding that the
deal was expected to settle in the third quarter of fiscal 2024.
    Shares of Mirvac were down 0.24% to A$2.075 by 0041 GMT.    
         
($1 = 1.5713 Australian dollars)

 (Reporting by Ayushman Ojha; Editing by Shailesh Kuber and
Subhranshu Sahu)
 ((Ayushman.Ojha@thomsonreuters.com;))