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Aged Care Services


scotchnice

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It's all part and parcel of Lib/Nat policy:

Over time, health problems of the elderly and needy will fix themselves. :hypocrite: Given their generous salaries and forever protected Super packages, none of our Parliamentarians will come into a comparable situation; to them, it therefore doesn't exist.

 

Of course, it's far more important to ease the tax burden of our suffering companies; make sure they can pay their directors and shareholders fair compensation and make up for reduced interest rates and our stagnant economy.

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Australia's ageing population will mean close to $22.5 billion worth of aged care facilities will need to be built before 2031 in the main capital cities alone according to Calibre Consulting Engineers. The estimates are conservatively based on the federal government's planning ratio which forecasts that 88 people in every 1000 people aged more than 70 years of age will need some government funding for aged care.

 

Calibre's research shows that to meet growing demand for assisted living and aged-care facilities Melbourne will require 32,252 more residential care places by 2031, Sydney will need 32,954 more places, Perth will need 9750 more places and Brisbane will need 17,000.

 

"If we apply a fairly typical development cost of $250,000 per place, that's something like $22.5 billion in new development required," Calibre's head of Civil & Urban Brent Thomas said.

 

Calibre expects the biggest hindrance will be local planning.

 

"Our dealings with various aged care or retirement living operators around the country identifies one clear and common problem: every one of them is concerned about a lack of suitably zoned sites, especially in neighbourhoods where we know demand will increase," Mr Thomas said.

 

"Partly this is the result of planning schemes which don't keep pace with present or future community need and partly it is nimbyism that fights against changed land uses in established areas." "But the consequence of supply shortages created by inflexible zoning or lack of political will are the same: prices will rise for available sites, and many seniors will be unable to afford the type of care they need in areas they want to live." "Some might suggest a solution is to insist seniors housing move to urban fringe locations, but this is a Stalinist approach."

Operators such as Regis Healthcare, Ryman, Estia Health, Japara Healthcare, Bupa, The Village Group, Seasons Aged Care, Aveo Group, Uniting Care and Opal are just a few of the competing businesses looking to deliver the aged-care facilities across Australia.
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Thought it was more recent, but maybe just a rework. (I am out of action / office, so I can't check)

 

The big issue; growth, yes, but funded from where. Always wary of subsidies, govt money can shrink in a flash, and allocation of those dollars needs transparency.

 

Good businesses, margin plus, most of the time .... until they aren't.

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  • 3 months later...
Aged care operators and developers, including troubled company Estia Health, have been downgraded by CLSA and Bank of America Merrill Lynch following an update from the federal government on guidelines for charging additional private fees in residential aged care.

 

On Friday the federal government clarified what fees aged care operators could charge their residents and gave examples of fees that were not permitted, such as those for; "maintenance inside and outside the aged care home", "any repairs or refurbishment of the resident's room after they have left the aged care home" and "capital costs, asset management or replacement". The fees are commonly referred to as "capital refurbishment fees" and "asset replacement contributions".

 

"We understand that the capital charges of $15 per day charged by Regis Healthcare, Estia Health and Japara Healthcare are similar to those fees examples listed above," BAML analyst William Dunlop said. "A layman's reading of the department of health guidance and the referenced legislation clearly suggests these types of fees are not permissible under legislation. As a result, we are removing them from our Regis, Estia and Japara earnings forecasts."

 

As a consequence of the reduced earnings, BAML downgraded its price targets on Estia Health to $2.75 from $3.35, Regis to $3.70 from $4.30 and Japara to $1.90 from $2.30.

 

CLSA has also picked up on the government clarification. "We note the listed operators began including the fee in incoming resident contracts effective June 2016. This throws into question whether a capital refurbishment fees can be charged," CLSA analyst Zara Lyons said.

 

CLSA reduced its price target on Estia to $2.87 from $4.10, Japar's to $1.77 from $2.53 and Regis to $3.71 from $5.30, downgrading Estia to a "sell recommendation" from an "underperform", Japara to a "sell" recommendation an "outperform" and Regis also to a "sell" from a "buy" recommendation.

 

CLSA went further saying, there could be penalties if fees that were not meant to be charged were in fact charged. "Should an aged-care operator decide to charge for services that the Department has now deemed are outside the Act, then it is possible that a complaint could be made by a resident to the Aged Care Commissioner."

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Certainly hammered for sure.

 

A stockbroking friend of mine said to invest in aged care stock as the growing aged population,couldn't possibly lose in this sector.

 

That was 6 months ago but I am glad I stuck with banks after yesterday,so long as no one wants to throw more cold water on banking,royal commission etc,cheers mrbear

 

 

 

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as well as these two, there is another player in the manufactured homes space

 

Ingenia Communities Group - INA - owns, manages and develops a diversified portfolio of 61 quality affordable seniors living communities across Australia. INA has three segments including Garden Villages (rental), Settlers Lifestyle (Deferred Management Fee) and Active Lifestyle Estates (Manufactured Home Estates).

 

Lifestyle Communities Limited - LIC - develops, owns and manages affordable independent living communities for working, semi-retired or retired people.

 

Gateway Lifestyle Group - ASX Code: GTY

 

Gateway Lifestyle Group is one of Australia's largest manufactured home estate providers operating within the broader aged accommodation industry. With a current 5 per cent yield supported by stable and growing cash flows, GTY is an attractive investment option for income-oriented investors. GTY provides affordable community living options to over 55s. Listed in 2015 with 36 communities, the strategy is to acquire and convert mature and mixed-use MHEs in the highly fragmented market. This year the company acquired 17 communities, bringing the total to 53, which are spread across eastern states.

 

To generate revenue GTY makes a margin on manufactured home sales and charges residents weekly rent for the right to occupy sites and for facilities maintenance. GTY owns the underlying land and residents own the manufactured home. The average sale price is about $245,000; typically prices are 40-60 per cent of the median house price in the surrounding areas. GTY generates a $100,000 margin on purchases from the manufacturer of the home. Rent averages $146 per week, and rises each year at or above the rate of inflation.

 

GTY should see steady demand in coming years as Australia grapples with housing affordability and the growing population of underfunded retirees.

 

According to the ABS and the 2015 Intergenerational Report, the median superannuation balance for persons over 60 and not yet retired is $95,000, while the mean household wealth of lone persons aged over 65 is $620,000. In other words, the majority of wealth is tied up in home equity.

 

The average retiree, who retires at 60 and lives to 83, is expected to run out of savings and investments 10 years into retirement. This represents a 13-year funding gap.

 

Meanwhile, Australia is in the midst of a housing affordability crisis after two decades of house price appreciation at double the rate of median wage growth.

 

For underfunded retirees GTY provides a way to release equity in the family home while maintaining the ability to live independently in a community of like-minded residents.

 

Industry: Retirement accommodation

 

CY17 forecast distribution: 12 cents per share

Jonathan Wilson is an analyst at www.clime.com.au
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A major US-based trailer park operator is believed to be poised to put the country's modular housing industry into play, with Hometown America tipped to be planning a takeover bid for Gateway Lifestyle GTY and Ingenia Communities INA in an upcoming deal that could create a $1 billion-plus Australian behemoth.

 

Some have suggested that Bank of America Merrill Lynch could be involved in a prospective transaction, although it is unclear what banks are working with the parties as advisers. It is also uncertain whether the group is looking at buying both targets and merging them or owning only one, although many believe bringing the $463 million Ingenia and $643.7m Gateway together makes sense due to the synergistic benefits.

 

The modular housing sector in Australia remains highly attractive to American groups that have the expertise running trailer parks and are eager to consolidate the Australian market. Already, Blackstone and Kohlberg Roberts have circled Gateway Lifestyle before it listed around the middle of last year, as did Hometown America at the time...........

The Australian
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