Good evening,

It’s no secret that private capital has hit the big time, including in commercial real estate, with Stockland striking a $1 billion capital partnership with Invesco Real Estate as it pursues growth in the red-hot land lease communities subsector.

Street Talk can reveal the ASX-listed property giant was preparing to sign on the dotted line with Invesco on Monday evening, after fielding proposals from local superannuation funds and global private capital players in a process run by Jarden. The partnership is expected to be announced as early as Tuesday morning.

Under the deal, Stockland and Invesco would own and develop land lease communities together in a 50-50 partnership. To get the ball rolling, Stockland would kick in three assets and about 1200 homes from its pipeline across NSW and Queensland.

While that should mean a payday for Stockland – it would effectively be selling a 50 per cent stake in the three assets – investors know that the bigger prize is securing a deep-pocketed backer who is keen on unlocking a $1 billion pipeline for the venture. Of note, the fund would be open-ended to allow it to capitalise on future demand.

Australia’s ageing population and housing crisis have made land lease communities popular with property developers and owners as an alternative to retirement communities. Under the land lease model, a buyer owns the home but doesn’t have to buy the land, which it leases from an operator like Stockland.

Stockland’s freshly minted partner Invesco, with its $US90 billion ($136 billion) invested in property across the globe, is understood to see land lease communities as a key area of growth in Australia.

Read the full story tomorrow and more on the Street Talk page.

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