New Zealand's pension fund, Infratil to sell RetireAustralia for $551 million

Aug 8 (Reuters) - New Zealand-based Infratil IFT.NZ and the country's sovereign pension fund have agreed to sell their entire stake in an Australian retirement village operator for A$845 million ($550.60 million), the infrastructure investor said on Friday.

Infratil and NZ Super will each sell their 50% stake in RetireAustralia to the real estate arm of global investment manager Invesco IVZ.N.

The divestment offers little to no return for Infratil after more than a decade of ownership and tracks with its strategy to offload businesses unlikely to scale under its stewardship, in an attempt to shore up its balance sheet.

"Despite a positive outlook for the business, it is increasingly difficult for an investment of this size to deliver meaningful returns for Infratil shareholders," Infratil said in a statement.

The transaction comes closely on the heels of Brookfield Asset Management's BAM.TO A$3.85 billion sale of senior living platform Aveo in late June, underscoring operational and regulatory challenges faced by investors in the retirement living sector.

"The sector has faced a number of challenges, which have contributed to us not being able to fully realise our ambitions for the RetireAustralia business," Infratil said.

Infratil expects to book a loss of about NZ$80 million ($47.62 million) on the sale, based on the asset's NZ$404 million investment value, as of end-March.

It initially invested A$215 million ($140.09 million) in RetireAustralia in December 2014 and is set to receive A$300 million in proceeds when the sale completes by the final quarter of 2025.

Shares of Infratil closed 1.5% lower at NZ$11.84 on Friday versus a 0.3% drop in the S&P/NZX 50 benchmark index .NZ50.

($1 = 1.6798 New Zealand dollars)

($1 = 1.5347 Australian dollars)