Four years after backing away from a major divestment, Bupa Asia Pacific (Bupa APAC) is testing the market again. The UK-backed healthcare giant has appointed Morgan Stanley to offload its Australian aged care operations, and Jarden to manage the sale of its New Zealand footprint. Market estimates put the combined 97-home portfolio at more than $2 billion.
Bupa operates 57 homes in Australia and 40 in New Zealand. Despite ongoing operational pressures across the sector, Bupa APAC expanded revenue by 6% to $12.9 billion in 2025. Average occupancy hit 95%, while underlying profit climbed 10% to $947 million. The provider also committed $500 million to upgrade its older Australian properties.
The move signals a clear shift in how capital views aged care assets – even as major operational and legal hurdles remain.
Legal headwinds and standard-of-care pressure
The decision to sell comes while Bupa defends a class action in the Federal Court brought by Echo Law. The lawsuit alleges Bupa failed to deliver acceptable staffing levels across its Australian facilities between July 2019 and September 2025.
Bupa attempted to throw out the case, but Federal Court Judge Catherine Button rejected the application in December 2025, sending the matter to trial. Managing compliance risk and staffing standards remains central to the operational reality of running aged care facilities at scale.
The M&A landscape has shifted
Bupa previously tried to exit parts of its regional network in 2022. At the time, it engaged Macquarie Capital to test buyers for its New Zealand aged care and retirement living assets. That process collapsed as volatile market conditions stalled transactions across the region.
Four years later, institutional capital has returned to established portfolios:
- Stonepeak and Axight acquired Estia Health from Bain Capital for $2.5 billion. Bain had bought Estia for $838 million in late 2023, expanding it from 73 to over 90 homes.
- Opal HealthCare, Roshana Care Group, and Respect have continuously absorbed existing care sites to build operational scale.
The supply crisis: Buy vs build
Investors are eager to buy existing care homes, but almost no one is building new ones.
Government figures show Australia needs 10,600 new aged care beds every year for the next two decades. Yet, providers completed just 802 new beds in 2025–26.
High construction costs and strict funding rules make building new homes financially unviable. For private equity and institutional investors, buying established, profitable operations like Bupa is the only practical way to expand.
This sale will reveal if buyers are willing to take on past legal and staffing liabilities to gain scale in a tight market. The outcome will set the direction for future mergers across the sector in the years to follow.
