M&G Real Estate makes foray into Australian senior living sector

Artist's impression of a home at Halcyon Jardin, one of two projects that are being developed under the M&G Real Estate-Stockland joint venture (Picture: Stockland)

Global real estate investment manager M&G Real Estate has formed a strategic capital partnership with Australian developer Stockland to invest in and develop projects in the senior living segment. Under the partnership, M&G will hold a 49.9% interest, while Stockland will own the remaining stake. The collaboration will focus on delivering land lease communities across Australia.

The partnership marks M&G’s maiden foray into the Australian senior living sector. “Our entry into Australia’s land lease community sector reflects our conviction in senior living as a structurally supported segment that is becoming increasingly institutional,” remarks Jin Dong Lai, CEO and chief investment officer of M&G Real Estate Asia.

The first projects under the partnership comprise two land lease communities in the suburbs of Melbourne, Victoria. Halcyon Jardin, located in Clyde North, and Halcyon Evergreen, located in Clyde, are expected to deliver a combined 573 homes. The projects are currently under development and will be delivered in phases through 2029.

Situated about 60km from the Melbourne CBD, the two projects are designed to cater to active seniors. Lifestyle amenities include a gym, community gardens, a library, social lounges and a pool. Major infrastructure works at both sites have been completed, with home sales currently underway, say M&G and Stockland.

Both Halcyon Jardin (pictured) and Halcyon Evergreen will cater to active senior, with lifestyle amenities such as a gym, community gardens, a libary, social lounges and a pool (Picture: Stockland)

Land lease communities are purpose-built residential developments where residents own their homes, but lease the land on which the homes sit. In Australia, these communities are typically professionally managed neighbourhoods that provide lifestyle amenities, alongside community and care support.

The development model has gained traction in Australia in recent years amid a growing senior population and rising demand for affordable downsizing options, says Stockland. According to the Australian Bureau of Statistics’ 2023 population projections, the number of Australians aged 65 and above is expected to increase by around 40% over the next two decades, implying a sustained demand for senior living solutions in the years ahead.

“Demand for modern, amenity-rich land lease communities continues to grow, and partnerships such as this [partnership with M&G] support Stockland’s ability to serve that demand while delivering sustainable, long-term value,” comments Justin Louis, Stockland’s chief investment officer.

Against this backdrop of growing demand, the land lease sector has attracted increasing institutional participation. Investors are drawn to the model, which combines home sales with recurring site rental income. “Partnering with Stockland enables us to combine global capital with experienced local development and operational capability, creating a platform positioned to deliver both development-led returns and long-term income for our investors,” says M&G’s Lai.

The partnership marks M&G’s second collaboration with Stockland. In 2024, the two companies formed a partnership to invest in logistics assets in Australia.

Stockland has also partnered with other institutional investors on land lease communities. In 2022, it formed a joint venture with Mitsubishi Estate Asia to build and operate land lease communities across Queensland and Victoria. Earlier this year, the Japanese company put its 49.9% stake in the joint venture up for sale as part of its capital recycling strategy.