Drivers of the investment in residential aged care

Why the rush for acquisition of residential aged care facilities?

Apart from the challenge of securing land and planning approval to build new stock, the government is freeing up the competitive market while at the same time reducing its funding – creating demand that will exceed supply.

Currently the government funds 82.6 places in residential care per 1000 people aged 70+. By 2021 they will fund 80 places. While people will stay at home longer, improvements in medicine will sustain increasingly frail people in care longer.

Demand will exceed supply and with deregulated pricing and a public conditioned that they will have to pay for care, operators have the potential to increase margins significantly.

Forecasts indicate another 50,000+ beds will be required over the next 10 years, requiring $12.5 billion capital.