Hall & Prior Health & Aged Care Group CEO Graeme Prior, who owns and operates 30 RACS in WA and NSW, is warning of a period of consolidation in the sector and that investors have to accept long-term lower returns as compliance costs rise.
Mr Prior said the Perth-based privately-owned company wants to build or acquire more facilities to expand the business in the future, as operators exit the industry after it was the subject of a two-year Aged Care Royal Commission.
“There will be consolidation in the sector. You will see less players and a lot of homes close down. How we go about this is going to be key. These are vulnerable people and all of a sudden their home is closing. It can be terrifying,” he said.
Hall & Prior recently opened its 13th aged care facility in NSW, a $70 million 111-bed aged care home at Penshurst, 17km south of Sydney’s CBD.
In total, the provider has about $650 million worth of aged care properties and employs about 2,400 specialist staff who care for 1,500 aged care residents, and another 1,000 people through its home care program in WA.
With consolidation and Federal Government’s commitment to “ageing in place with in-home care, Mr Prior said investors in the sector would face lower returns over longer-term periods.
“There needs to be the right metrics around investment for the long-term, it needs to be highly ethical and investing for the right reason in care as opposed to speculation in property,” he said.
He said the aged care sector had “reached the crossroads” and that in France, Britain and parts of Europe a wider care sector had emerged across “aged, clinically based home and community (care), mental health and disability. It is fairly siloed in Australia but hopefully we will harmonise and let the federal government manage the whole thing,” he said.
