Shares of listed residential aged care operator Estia Health Ltd (ASX: EHE) rose higher on Thursday after the company announced its plans to develop in excess of 500 additional aged care beds by the end of the 2019 fiscal year.
Estia said that it has entered into an agreement with Living Choice Australia Ltd, which is one of Australia's largest privately owned retirement village companies, to build two new facilities on the Sunshine Coast in Queensland.
This initiative will help it work towards its strategic plan to achieve 10,000 aged care beds by 2020, as well as its target of 500 to 1,000 places through greenfield developments, also by 2020.
The location of the facilities is also important. Australia's population is aging and growing at a rapid clip – a trend that is expected to continue over the coming decades. While the services provided by aged care facilities will thus become increasingly important, it is those who provide the best services in the most ideal locations that will likely benefit the most.
Estia Health's Chief Executive Officer, Paul Gregersen, said: "Queensland is an increasingly important market for Estia's growth plans and securing two additional residential aged care facilities on the Sunshine Coast, with its ageing population and strong socio-economic demographic, represents a very attractive proposition for the group."
Estia listed on the Australian Securities Exchange late last year following the successful floats of rivals Japara Healthcare Ltd (ASX: JHC) and Regis Healthcare Ltd (ASX: REG). Although it got off to a very shaky start, the stock has risen strongly in the months since, but still appears to be a promising investment case for 'Foolish', long-term investors.
