One of the world's biggest investment businesses, New York Stock Exchange-listed global funds manager The Blackstone Group, is boosting its focus on New Zealand with plans to buy five big retirement villages - and that's just the start.
Kishore Moorjani, a Blackstone senior managing director, arrived in Auckland yesterday revealing major growth plans in the Auckland and Tauranga areas.
Blackstone announced this morning that it would initially buy five large, well-established villages from ASX-listed, Australian-headquartered Lendlease, subject to Overseas Investment Office approval. They are Peninsula Club at Whangaparaoa, Parklane Village in Forrest Hill, Knightsbridge Village at Mairangi Bay, Mayfair Village on Oteha Valley Rd near Albany and Ocean Shores Village at Mt Maunganui.
But Moorjani, originally from India, based in Singapore and here until Friday, said a much larger presence was planned, buying further existing villages.
"We're very keen to put additional capital to work," he said.
Blackstone might own about 10 New Zealand villages in the next few years with about 3000 units.
"We're looking to unleash this business and make it a growth business, working with the villages we have and working with others."
Just over a year ago, Blackstone bought A$150 million ($162.8 million) of Australian retirement village assets and now has $490 billion of assets internationally, providing benefits to 29 million pensioners in the United States and elsewhere, more than 2000 employees in 17 offices and investments in real estate, private equity, credit, hedge funds, new opportunities and strategic partnerships.
In New Zealand, it owns the franchise for the Burger King chain, which continues to lose money as sales growth is swallowed up by finance costs and other expenses.
In 2011, Blackstone paid almost $108 million to buy the franchise to 75 Burger King restaurants.
Blackstone also owns chemical business Ixom here.
Moorjani said Blackstone had partnered with Auckland investor Todd Strathdee, who would take an active role, and Jill Darcey, regional manager for the five villages, who would remain with the business, which employs 141 staff and manages and owns 1000 residences, which are home to 1200 people.
Moorjani is not responsible for Blackstone's Burger King investment: "We're continuing to persevere with that, right? We look at that, and every single investment, on a stand-alone basis. The idea is to work with that and not run for the hills at the first sign of a challenge."
See Morjani speaking to Herald property editor Anne Gibson here:
Tarun Gupta, Lendlease's property chief executive, said the conditional sale of its retirement village portfolio was in line with a strategy to recycle capital into its development pipeline.
"We will work closely with Blackstone to ensure a smooth transition for village employees and residents," Gupta said. "The retirement living sector remains an important business for Lendlease and we are the largest owner and operator of retirement villages in Australia, with more than 70 villages across the country."
Blackstone Assets in New Zealand
• Burger King, national food chain.
• Ixom, a former division of Orica.
• Buying 5 existing retirement villages.
• Overall has $490 billion of assets internationally.