“A community crisis unlike anything Australia has seen”: Regis Chair
To improve profitability in residential aged care and encourage the development of new beds, Regis Chair Graham Hodges has proposed a doubling of the RAD retention rate and an immediate $10 increase in the accommodation supplement.
Aged care policy must be tweaked to give operators an added incentive to build desperately needed new residential aged care beds, Regis Chair Graham Hodges told the company's AGM on Tuesday.
With Government forecasts putting demand for new beds at 9300 annually for the next 20 years, only about 5,400 beds have been added in the last four years, and only 802 in 2024-25.
“I believe we are fast heading into a community crisis unlike anything Australia has seen before,” Graham said.
“While this has not been caused by today’s Government, it’s today’s government that must address it. The demographic time bomb is predictable and relentless.”
To improve profitability in the sector, key to operators building, Graham proposes:
- increasing the RAD retention rate from 2% to 4%,
- an immediate $10 increase in the accommodation supplement plus an additional $40 prpd, and a further $20 prpd for residents in newly built facilities, and
- replacing the Maximum Permissible Interest Rate (MPIR) with the sector Weighted Average Cost of Capital (WACC).
Growing gap between supported residents
The “gap” between the accommodation funding received for non-supported resident and supported residents is growing, said CEO Linda Mellors. The shortfall is creating “perverse disincentives” for providers to accept supported residents, especially as operators record losses on accommodation services.
Graham commented: “The accommodation supplement is in urgent need of a significant increase.”
Improved greenfield economics
With construction costs having “moderated", occupancy rates high, room prices up, and RAD retentions in place, greenfield development economics are “attractive”, Graham added.
That being the case, Regis retains its target of 10,000 beds by FY28, requiring it to gain another 1,600 beds within three years. Regis' acquisition of OC Health last month puts Regis at more than 8,400 beds and 74 aged care homes.
The ASX- listed operator said construction is underway at Toowong (QLD) and Carlingford (NSW), with work at Belrose (NSW) expected to begin in 2026. Regis has nine development sites, after acquiring five in 2024-25.
Quarterly update
In the first quarter of FY26, Regis generated $90 million of net RAD inflows, compared with $195 million for the entire 2024-25. The increase included $31 million from Regis Camberwell, which has been in ramp up and achieved full occupancy on Monday.
Regis held $99 million net cash as of 30 September 2025, compared with $192 million as of 30 June 2025.
Average revenue per occupied bed day increased 11% to $451.6, up from $406.4 in Q1 FY25.
The Regis FY25 AGM presentation is available here.
