National Lifestyle Villages is planning a major expansion after signing an innovative $150 million partnership deal with Blackstone, the second international private equity group to back the Perth business.
NLV managing director John Wood said the Blackstone investment was backed by the rental payments paid by the 3,000 residents of its lifestyle villages.
"Its an oportunity for them to invest in a mature, recurring income stream, which frees up capital to allow us to invest in the development of our villages," he said.
Mr Wood said NLV would be able to pay off its entire bank debt, while retaining the ability to pursue growth opportunities.
It also plans to retire the convertible loan note issued by Malaysia-based private equity group Navis in 2007.
Mr Wood, who retains an 80 per cent shareholding in the business, said Navis would continue as a minority shareholder.
NLV Group operates nine communities in Western Australia, as well as one in Victoria, catering for over-45 baby boomers and early retirees.
Mr Wood emphasised that the demographics of his lifestyle villages, which have an average age of 64, was every different to a traditional retirement village, which has an average entry age of 86.
In total, the NLV villages have more than 1,800 dwellings, and the company is planning to expand those facilities to 3,100 homes over the next few years.
NLV said it was planning to develop a further six communities as part of its near-term expansion plan, totalling an additional 2,100 homes.
NLV said its land-lease business model is unique in the retirement village sector, allowing residents to own their homes, which are primarily modular construction, outright, while leasing the land and facilities from NLV.
Mr Wood said the investment by Blackstone was one of the largest single investments in the sector in Australia to date.
Blackstone’s initial investment will be $150 million, while the firm’s Tactical Opportunities Group’s Asia managing director, Kishore Moorjani, said there was potential for further funding.
“Blackstone’s investment follows extensive due diligence and we look forward to providing our global knowledge, expertise and capital to develop tis emerging sector in Australia,” Mr Moorjani said.
