Bruce Bailey is a Director of Pride Aged Living, working with aged care providers and retirement living operators to build sustainable, values-driven business models. He partners with boards and executive teams to strengthen governance and strategy, and supports organisations through growth, mergers, and transitions. With experience as a non-executive director in a large, complex organisation, Bruce brings practical insight and a strong commercial lens to his advisory work.
How do you finance development without RADs?
Precis
Businesses with hard assets use a combination of debt and equity to finance them. Aged care has had a heavy reliance on Refundable Accommodation Deposits (RADs) for debt.
Recent changes to RAD retention and DAP indexation have fundamentally altered the landscape and economics of accommodation in residential care. These shifts mean that investors, banks and superannuation funds may now be attracted to the sector, provided the returns and arrangements are commercially structured.
This session will use case studies to demonstrate how developments that rely solely on DAP (rent) for accommodation income can deliver investable returns to banks and investors. We will also provide insights into viable lease terms now being adopted in Opco/Propco arrangements that provide a win for operators, investors and residents.
Key issues covered include:
• Why RAD is an expensive and restrictive form of debt
• How changes to retention and indexation are influencing consumer decisions on how they pay for accommodation — and how this is creating the conditions to attract new forms of long-term debt
• Debt-equity mix models that enable principal repayment
• Why these developments are particularly good news for not-for-profit operators
We will share research data to support the contentions, claims and observations presented.
An aged care facility is a form of home. Just as people either rent or finance the purchase of their homes with debt and equity, a residential aged care sector without RAD should explore how it can rent or buy facilities using traditional debt structures.
This session will promote:
• strategic thinking
• future focused solutions
• a visionary approach to exploring new opportunities for the sector
As such, it aligns strongly with the theme of Strategic Thought leadership.
Attracting new investment capital to aged care is necessary to facilitate the construction of the additional supply needed to meet future demand. This session is essential for anyone who is interested in charting a different future for aged care accommodation.