Real estate · Industry brief

Australia's senior living sector – encompassing aged care, retirement villages and land lease communities – is generating close to $3 billion in annual transactions and represents one of the clearest consolidation opportunities in Australian real estate. CBRE research shows the $150 billion sector spans approximately 480,000 units with the top five operators controlling less than 20% of the market, signalling significant room for M&A activity. Transaction volumes have grown to represent 5-10% of annual commercial real estate deals since 2021, driven partly by regulatory clarity from the Aged Care Act and retirement village reforms that have strengthened investor confidence. The sector faces a widening supply-demand gap, with new senior living stock growing at just 0.7-1.7% annually against forecast demand growth of 4% as Australia's over-65 population is projected to rise from 4.75 million to 7 million by 2040. Institutional ownership remains low and analysts expect the next phase to be defined by larger cross-segment operators emerging through M&A rather than greenfield development.

Federal budget changes and superannuation regulation modifications have shifted investor focus towards apartments and commercial real estate in Australia. Investor interest in apartments has grown due to lower purchase prices and stronger yields, with 242 unit markets currently offering yields of 5% or higher compared to only 48 house markets. Property expert Michael Wilkins notes that apartments are increasingly regarded as viable alternatives to houses for owner-occupiers, particularly in cities like Brisbane, Adelaide, and Perth, where they are showing superior capital growth. Changes to superannuation regulations have simultaneously driven investor attention towards commercial properties, which offer higher net yields and long-term leases with tenants covering outgoings.

Malaysia's retail sector is experiencing a shift toward suburban markets, with Real Estate Investment Trusts (REITs) increasingly acquiring neighbourhood malls in areas like Petaling Jaya, Wangsa Maju, and Klang between 2023 and 2026, according to JLL. This trend reflects institutional investor preference for suburban retail with predictable income streams and lower tourism volatility compared to city-centre assets. The transaction activity includes both related-party asset injections by REIT sponsors and third-party acquisitions, while the development pipeline is similarly moving toward suburban mixed-use and transit-oriented projects with MRT connectivity.