This article is from the Australian Property Journal archive
EXPECTING an undersupply of aged care beds, ASX-listed Regis Healthcare is looking to accelerate its recently-resumed building program as construction costs stabilise and pending the recommendations of the Aged Care Taskforce.
It reported an uplift in average occupancy improved over the Q1 2024 from 92.5% at the end of June to 93.5%, with spot occupancy on 20th October of 93.8%, above the sector average. Managing director and CEO Dr Linda Mellors told yesterday’s annual general meeting that while the occupancy percentage is “always of interest, the more important metric is the number of residents in our care, which is at all-time highs for Regis”.
Aged care government revenue, per occupied bed day, has steadily improved since the introduction of the new funding model a year ago, increasing from $227.70 in Q2 FY23 to $279.60 in Q1 FY24.
“This improvement reflects the Independent Health and Aged Care Pricing Authority’s work to recommend a higher unit price as well as reassessment of resident care needs,” Mellors said.
In FY23, the company decided to recommence its building program with a greenfield development in Melbourne’s inner eástern suburb of Camberwell. The development will see construction of 112 beds across a four-level residence, at an investment of about $40 million excluding land. The development remains on track to open in the second half of FY25.
“In terms of our other pipeline development projects, we continue to advance our plans and are ready to accelerate our program of works as building costs stabilise and pending the final recommendations of the Aged Care Taskforce, due at the end of this calendar year,” Mellors said yesterday.
“In coming years, Australia will move to an undersupply of both quality and total residential aged care beds due to the inability and/or unwillingness of the sector to invest when most providers have been loss-making and returns on investment remain uncertain. This lack of growth activity comes at a time when we expect large numbers of Baby Boomers to reach an age of increased usage of aged care services. The undersupply of beds will put upward pressure on occupancy and create additional demand for quality new beds,” Mellors said.
In January this year, the company acquired a parcel of land in Carlingford, in Sydney’s north west. The site has been earmarked for a 110-bed residential aged care home, with development approval in place.
Regis has two further development projects, in Toowong, in Brisbane’s inner west, and north east Sydney’s Belrose.
