Babcock and Primelife in $180m deal for Fini retirement homes

Fini Group founder Tony Fini has negotiated a $180 million deal to sell his retirement village portfolio to investment bank Babcock & Brown and prominent retirement village player Primelife Corporation Ltd.

The Fini Villages portfolio comprises large retirement villages in Ellenbrook, Mindarie, Woodvale, Woodlands, Booragoon, Bibra Lake and Mandurah.

Mr Fini built the business after selling his construction firm in 2001 to Mirvac Ltd, which currently employs his son Adrian Fini as WA chief executive.

The Fini Villages deal announced to the ASX today will be dependent upon Primelife shareholders agreeing to the creation of the ASX listed vehicle Babcock & Brown Communities Group (BBC).

If given the green light in July, BBC intends to launch a $300 million minimum capital raising to fund the Fini acquisition, recapitalise the business and provide working capital for potential village expansions.

Primelife spokesman Mark Westfield said the Fini deal would be a bolt-on acquisition for the company which already had a strong presence in New South Wales, Victoria, Queensland and South Australia.

Primelife owns just one retirement village in WA on Claremont Crescent in Swanbourne.

"The sector hasn't been attractive to institutional investors before but there's likely to be more consolidation this year," he said.

Mr Westfield said it was too early to tell if the new entity would embark on an expansion program for the Fini Villages or seek other retirement village acquisitions in WA.

BBC is expected to keep the present management of Fini Villages in place.

Fini Villages currently has a new 160-unit property under construction in Ellenbrook and a 35-unit expansion of its Harbourside Village in Mindarie under way.

Babcock & Brown and Primelife's move into WA follows that of ING Real Estate Community Living Group, which paid $47 million for the Settlers Lifestyle Villages portfolio in April, including properties in Ridgewood, Meadow Springs and Ravenswood.

Fini Villages was unavailable for comment