Aug 8 (Reuters) - New Zealand-based Infratil ( IFUUF )

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 ( IFUUF ) and NZ Super will each sell their 50% stake in

RetireAustralia to the real estate arm of global investment

manager Invesco ( IVZ ).

The divestment offers little to no return for Infratil ( IFUUF ) 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 ( IFUUF ) shareholders," Infratil ( IFUUF ) said in

a statement.

The transaction comes closely on the heels of Brookfield

Asset Management's ( BAM ) 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 ( IFUUF ) said.

Infratil ( IFUUF ) 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 ( IFUUF ) closed 1.5% lower at NZ$11.84 on Friday

versus a 0.3% drop in the S&P/NZX 50 benchmark index.

($1 = 1.6798 New Zealand dollars)

($1 = 1.5347 Australian dollars)