With three words, Tony Randello changed retirement living for ever

In 2021, with relatively new owners (Brookfield Asset Management), a new CEO in Tony Randello and a new executive leadership team, Aveo introduced contract options: Now, Later, Bond. 

An executive with 20-plus decades in the retirement living sector, Tony knew the question to ask to challenge his leadership team and new owners: is the DMF dead? What does the future of a business model established 60-years ago look like for today’s customer?  

Tony was also aware the oldest Baby Boomer turned 75 in 2021 – an important number as this remains the average age a person enters retirement living. 

When we last spoke to Tony for our SATURDAY digital magazine in 2023, he told us that one-third of all incoming residents were parting with large sums of cash upfront in choosing their ‘Now’ contract option.  

The PwC / Property Council Census 2024 suggests that the only real shift in retirement village contracts over the past four years has been an increase in new residents entering villages under a DMF with no capital gain share model. 

If this is the extent of innovation, then the operators must have their head in the sand. 

Some are starting to see the light 

All three of Australia’s largest private retirement living operators have now moved to providing the customer with choice around contracts with Keyton introducing the option to Pay Upfront, and Levande advertising four contract options on their website: Prepaid Plan (Now), Deferred Management Fee (Later), Refundable Contribution (Bond), and Pay As You Go. 

LDK Seniors Living’s modus operandi is an upfront payment with an additional village membership, which 85% pay upfront. It is a model that underpins their entire private aged care model. Look at their growth – a fourth village in Brisbane planned. 

Not For Profit Anglicare Sydney, which owns 50% of LDK, is introducing its For Life version – which has now been accepted by residents in three villages.  

For over 20 years, Lifestyle Communities has operated its land lease communities with a Deferred Management Fee (DMF). After being hammered by the ABC 7.30 attack in July 2024 and the ruling of the Victorian Civil and Administrative Tribunal 12 months later, it has caught onto Tony’s thinking. 

The operator is making the option available for new residents to: 

•  Pay Upfront – Pay 10% of your home’s purchase price when you settle and move in with no more to pay at exit. 
• Pay Later – Pay up to 20% of your home’s purchase price when you leave the community to free up cash now.  

The DMF Model isn’t dead. It just needed a shake-up. 

Tony says in an exclusive interview – his first since Aveo’s sale to The Living Company – in the first issue of SATURDAY magazine, available on Friday: 

“Where did that get us? It got us to a business that was almost fully occupied at 97% previously at 72%; Sales were consistent, hitting anywhere between 1200 to 1500 units a year for a 10,000 unit portfolio.  

“And that translated to a cash yield of around 6% per annum.” 

Is your cash yield even close to 6% per annum? Perhaps it is time to read what Tony has to say. He pulls no punches.  

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