Fragmented $150bn senior living sector opens major consolidation runway

Australia’s highly fragmented senior living sector presents one of the clearest consolidation opportunities in commercial real estate, with new CBRE research showing the $150 billion asset class is attracting rising investor interest and generating close to $3 billion in annual transactions.

Spanning aged care, retirement villages and land lease communities, the sector comprises approximately 480,000 units yet remains one of Australia’s most under-institutionalised real estate classes, according to CBRE’s 2026 Australian Senior Living report.

The report highlights that transaction volumes have grown strongly since 2021 to represent 5-10% of Australia’s annual CRE deals.

Activity is expected to remain elevated, supported by the sector’s underlying fundamentals, greater regulatory clarity and the scope for operators to build scale through M&A.

Marcello Caspani-Muto, Director, CBRE Australian Healthcare & Social Infrastructure, said greater regulatory clarity from the Aged Care Act and retirement village reforms had helped strengthen investor confidence, while transaction activity had deepened amid growing participation from private equity and institutional capital across both aged care and retirement villages.

“We’ve moved from a sector that traded episodically to one with a much deeper and more active transaction market. Greater regulatory clarity has helped strengthen investor confidence, and we’re seeing private equity and institutional funds actively compete for senior living portfolios,” Mr Caspani-Muto said.

CBRE’s report also points to a significant consolidation opportunity, with ownership still highly dispersed across much of the sector.
 
The top five operators account for just 17% of retirement villages and around 20% of aged care, while land lease communities are the only segment showing meaningful concentration, at 55% of developed stock.

“When the five largest players in a $150 billion sector control less than a fifth of the market, you’re looking at one of the clearest consolidation runways in Australian real estate,” said Sameer Chopra, CBRE’s Head of Pacific Research.

“Institutional ownership is low, scale advantages in care delivery and development are real, and we expect the next phase of the market to be defined by larger, cross-segment operators emerging through M&A rather than purely through greenfield development.”

On the development front, the report shows demand is compounding faster than supply can respond.

Australia’s population aged 65 and over is projected to grow from 4.75 million today to nearly 7.0 million by 2040, equating to a 2.4% per annum increase. By contrast, new senior living stock has been growing at just 1.0% to 1.7% per annum.

In aged care specifically, supply has expanded by only 0.7% per annum, or around 1,500 places, since 2020, against forecast demand growth of 4% per annum in line with the 85-plus cohort.

“Current capex levels and construction cost growth mean we don’t see that supply rate improving over the medium term. Home care has taken some pressure off, but it doesn’t close a gap of this magnitude,” Mr Caspani-Muto said.

Mr Chopra noted that the wealth position of incoming retirees would further underpin demand for high-quality senior living options.

“Some 83% of over-75s own their home outright, average dwelling values sit around $1.1 million, and a typical over-65 couple is likely to hold $750,000 in superannuation. That’s a cohort with the means to pay for quality and amenity - and their expectations will keep rising,” Mr Chopra said.