Retirement Village Finance

Retirement village and aged care development is a specialist asset class driven by Australia's ageing demographic and the growing demand for quality over-65 accommodation. The income model, whether it is an ingoing contribution with a deferred management fee, a land lease, or freehold purchase, determines how the project is assessed, valued, and financed. Retirement Villages Act compliance across each state and territory adds a regulatory layer that most commercial lenders are not equipped to navigate. Settled Funding Group works with retirement living developers, aged care providers, and boutique retirement community builders to identify the specialist lenders on the 90+ panel who understand this sector. Joseph Farhat manages the process from initial project model review through to construction drawdowns and presale or reservation campaigns.

Who This Is For

• •Developers building independent living unit (ILU) retirement villages under the deferred management fee model, where residents pay an ingoing contribution and exit fee on departure.
• •Aged care providers developing or expanding a residential aged care facility (RACF) to serve the growing demand for quality aged care accommodation.
• •Investors building a boutique retirement living project of 20 to 100 units targeting the growing over-65 demographic in coastal, regional, or lifestyle locations.
• •Those building a land lease community village for retirees, where residents own their home and pay site fees for the land.
• •Developers of integrated retirement communities combining independent living units and support services in a single campus development.
• •Those building specialist aged care or memory care accommodation, including secure dementia units requiring specific design and regulatory compliance.

How Retirement Village Finance Works

Retirement village finance is a specialist commercial development facility assessed against the specific income model and regulatory framework of the project. The income model determines which lenders will consider the application and how the GRV is assessed. ILU deferred management fee projects are valued on the ingoing contribution and projected DMF income stream. Land lease projects are valued on the capitalised site fee income. Freehold purchase projects are valued on comparable residential sales adjusted for the retirement living premium. Joseph Farhat reviews the project model, income projections, and regulatory compliance documentation before identifying the right specialist lender. The process moves from initial review and lender identification through to application, specialist valuation, approval, and staged construction drawdowns with presale or reservation campaigns running in parallel.

What Lenders Assess for Retirement Village Finance

• •Income model and regulatory compliance: lenders assess the specific retirement living model (ILU with DMF, land lease, or freehold) and the Retirement Villages Act compliance obligations in the relevant state or territory. Regulatory compliance documentation must be in order before most specialist lenders will proceed.
• •Projected cashflows and income model: the income projections must reflect the specific model. DMF projects require modelling of ingoing contributions, management fees, refurbishment obligations, and exit fee waterfall. Land lease projects require site fee income projections. Freehold projects require unit sales feasibility.
• •DA and aged care approvals: the development approval must confirm the retirement village use. For residential aged care, Commonwealth accreditation and Aged Care Facility approval may also be required, depending on the care level provided.
• •QS report and build cost: an independent quantity surveyor report confirming the construction cost and a fixed-price contract with a builder experienced in retirement living construction are required by most specialist lenders.
• •Presales and reservations: for ILU and freehold projects, a presale or reservation campaign is often running in parallel with the development finance. Lenders assess the presale position and may condition approval on a minimum presale level before the first drawdown.
• •Developer experience with aged care or retirement living: prior experience with retirement community development or aged care management significantly strengthens the application. The complexity of the regulatory and operational requirements means lender scrutiny of developer experience is higher than for standard residential development.
• •Exit strategy: ILU projects exit via ingoing contribution receipts from residents occupying completed units, with the DMF income stream retained long-term. Land lease projects exit via site fee income or portfolio sale to a land lease operator. Freehold projects exit via individual unit settlements.

The Retirement Village Finance Process: What to Expect

1. 1.Initial review: Joseph Farhat reviews the project model, income projections, regulatory compliance status, and developer experience to identify the right specialist lender before any formal submission.
2. 2.Application prepared and submitted with regulatory compliance evidence, income model and feasibility, QS report, builder contract, presale or reservation data (if applicable), and financial documents.
3. 3.Specialist valuation: a valuer with retirement living experience assesses the GRV using the specific income model, whether capitalised site fees, ingoing contributions, or comparable unit sales.
4. 4.Approval: typically four to six weeks from submission given the complexity of the income model and regulatory assessment. Projects with strong presales or reservations and experienced developers move faster.
5. 5.Staged construction drawdowns released at milestones. Presale or reservation campaigns run in parallel to build occupancy. On completion, residents settle or take occupation and the exit income stream commences.

Indicative Finance Options

Retirement Village Finance Broker

Retirement village and seniors living development is highly specialised, and only a handful of lenders genuinely understand the model. The DMF income structure, occupancy rights, staged delivery, and operator covenant make these projects unlike standard residential development, and appetite varies widely. A deal one lender cannot price is workable for another. A broker who knows which lenders actively fund retirement and seniors living development saves you weeks of wasted applications, protects your credit file from unnecessary enquiries, and gives you access to non-bank and specialist funders most developers cannot approach directly.

Settled Funding Group represents you, the borrower, not the lender. Joseph Farhat reviews your project model, DMF structure, operator covenant, staging, and feasibility, then matches the project to the right lender from our 90+ panel and negotiates terms on your behalf. We prepare and manage the submission end to end, from indicative assessment through to your first drawdown. As a broker, we are typically paid by the lender on settlement, so in most cases there is no direct cost to you. If your project is complex, time-critical, or has been declined elsewhere, talk to us early and we will tell you honestly what is achievable.