Supersize Me: Is Australia ready for the first mega-operator in retirement living?
Should The Living Co. succeed in bringing Keyton under its umbrella, the combined operation would serve a population of residents of more than 25,000. That level of concentration is new territory for the retirement village sector.
The retirement village sector does not get many moments that feel genuinely seismic.
Earlier this year, as reported in The Weekly Source, The Living Co. grabbed national attention with its $3.85 billion acquisition of Brookfield Asset Management's Aveo.
Now there is credible talk that The Living Co. is lining up a bid for Lendlease’s 25% stake in Keyton. If that happens, we may be watching the creation of Australia’s first true mega-operator in retirement living.
A quick reality check on scale.
Aveo already manages a portfolio of more than 10,000 units across 67 retirement villages. Following their recent divestment of 10 villages to BaptistCare, Keyton remains a significant portfolio in its own right with 65 retirement villages comprising close to 12,000 units.
Should The Living Co. succeed in bringing Keyton under its umbrella, the combined operation would serve a population of residents of more than 25,000. That level of concentration is new territory for the retirement village sector.
So here is the core question. Is the market ready for a supersized player with national reach and unmatched bargaining power?
As part of the potential deal, The Living Co. has also requested the option to assume management of Keyton and charge fees for doing so, estimated at around 0.5% if it secures the Lendlease shareholding. One assumes this will see a move toward genuine efficiencies and stronger service standards under a single umbrella of executive management.
The Living Co. has stated it wants to more than double its portfolio of student accommodation and retirement living units to 100,000 over the next five years.
The challenge for this potentially supersized operator comes with the risk of drifting toward a one size fits all model that fails to maintain local character inherit in each retirement village. As we hear many times from residents and Managers, “our retirement village is not like others.”
Then it becomes, how long until another emerges? In the early 2000s, we had a race to the top with the rise of FKP (now Aveo), Stockland (now Levande) and Lendlease (now Keyton).
We anticipate the next will emerge in the Not For Profit space. See the earlier mentioned BaptistCare. Their recent consolidation of State-based Baptist aged care brands into a single national identity shows that scale is no longer off the table. Nor is the ability to expand with the acquisition of Keyton’s Western Australian assets.
The numbers point to a sector on the brink of major change, with scale set to go to a level we have not seen before. Are we ready for the supersized operator? Are the residents? Are Governments?
Something to consider as 2025 comes to a close and have on our radar in 2026 and into the future.
