Strong outlook for retirement living sector

Strong outlook for retirement living sectorThe need for an additional 69,000 aged care places by 2022 is driving growth and attracting the attention of large-scale investors, according to a new report from Colliers International.”Changing of the guard: boutique to corporate – a shift in ownership” finds the healthcare and retirement living sector is undergoing a period of transformation in the face of continued shortage of stock and growing demand. The number of Australians aged over 65 is expected to more than double, growing from 3.6 million today to 8.5 million in 2055.Colliers’ report finds that private and family operators are being consolidated and concentrated among fewer larger players as size and scale supports greater profitability, smoother cash-flowers and reduced risk. Phil Smith, Colliers’ national director of healthcare and retirement living, says that regulatory changes have increased compliance costs for aged care operators, which has resulted in the need for scale and has paved the way for consolidation.The report also finds the outlook for the sector is positive. The industry has been buoyed by private equity investment and recent Australian stock market listings of Japara, Regis and Estia, which Colliers says have attracted strong market interest.According to Mary Wood, executive director of the Retirement Living Council, a rapidly growing retiree population, increasing life expectancy and baby boomers expectations are having a profound impact on the industry.”It is no longer a cottage industry, but a sector with publicly-listed companies and many large members with complex businesses,” Wood explains.”Colliers’ report underscores the great opportunities for our sector – but we need supportive policies from governments to ensure we meet the greater demand for diverse village types and locations,” Wood concludes.