By Ayushman Ojha

(Reuters) -Australia's Mirvac Group said on Wednesday it would buy land lease operator Serenitas from Singapore's sovereign wealth fund GIC for A$1.01 billion ($642.76 million) along with Pacific Equity Partners Secure Assets (PEP) and Tasman Capital Partners.

Serenitas will operate as a joint venture following the acquisition, with Mirvac and PEP holding 47.5% stakes each, while Tasman Capital Partners will own the remaining stake.

Founded in 2017 as a land lease community business, Serenitas has its assets in Australia.

The acquisition is a good move from Mirvac's perspective strategically, given that it has lots of offices and high-end apartments, said Winston Sammut, an investment manager at Sequoia Financial Group.

"This reduces their exposure to those difficult property sub-sectors. It's a good approach," Sammut said.

The deal comes at a time of increased investor interest in the Australian housing market amid critical undersupply, affordability challenges, and attractive benefits provided by retirement homes.

"This acquisition expands our residential offering, propelling Mirvac to become one of the largest owners in the attractive land lease community sector," said CEO Campbell Hanan.

The property developer will make a A$300 million initial investment, with A$240 million funded on settlement and A$60 million deferred for 12 months.

"The company appears to have identified investing in lifestyle communities as a potential avenue for growth, and so the acquisition of Serenitas fits the bill in that regard," said Tim Waterer, chief market analyst at KCM Trade.

Mirvac will fund the deal from existing liquidity sources and recent asset disposals, the company said, adding that the deal was expected to settle in the third quarter of fiscal 2024.

Shares of Mirvac were down 0.24% to A$2.075 by 0041 GMT.

($1 = 1.5713 Australian dollars)

(Reporting by Ayushman Ojha; Editing by Shailesh Kuber and Subhranshu Sahu)