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CAPE TOWN, Sept 19 (Reuters) - South Africa’s PSG Group spent 675 million rand ($50.77 million) for a 50 percent stake in Evergreen Lifestyle, part of local property business Amdec, as it eyes expansion into the lucrative retirement property sector, the companies said on Tuesday.
“Our investment mandate is to invest in and work with businesses that show high growth potential,” said Nico de Waal, chief executive of PSG Alpha, a unit of PSG Group.
De Waal said the investment was subject to regulatory approval.
The investment holding company, PSG Group, is already a majority shareholder of Curro Holdings, South Africa’s largest private education group which is expected to float its higher education business next month.
James Wilson, chief executive of Amdec Group, which includes the mixed-use Melrose Arch in Johannesburg, said there was scope to meet increased demand for retirement lifestyle villages.
The cash injection will allow for expansion to around 3,000 homes over the next three years, from the current 500 homes offered now, mainly in the Cape Town region.
Beyond five years, the companies plan to have more than 20 operating villages with 10,000 homes, growing the gross asset value to 20 billion rand from just under 2 billion rand now.
“We want to scale quickly because the numbers of middle to upper-income retirees in South Africa are growing quickly, so not only does the demand for quality accommodation exist, but it is swiftly outstripping supply,” Wilson said in a launch statement.
$1 = 13.2960 rand Reporting by Wendell Roelf; editing by Jason Neely