Ryman Healthcare has put a "relatively low-risk toe in the water" in Australia with the purchase of its first site in Victoria, Forsyth Barr broker Suzanne Kinnaird says.
The development would be part of Ryman's existing 550-unit-and-bed annual build rate and Forsyth Barr had not changed its forecasts.
Ryman's historically prudent and long-term approach to expansion meant it was better placed than many in the past to be a success in Australia, she said.
It was unlikely to join the array of New Zealand "corporate skeletons" on Bondi Beach.
"Successful New Zealand businesses have failed in Australia through underestimating the differences and overpaying for poor businesses," she said.
"We expect Ryman to take a conservative approach and will wait and see how successful this first village is before deciding on a more extensive Australian rollout."
Ryman would have close to 30 villages in New Zealand by the time the Australian village was operating so it would be a small component of its overall business, Ms Kinnaird said.
Ryman now had 24 villages and would open a further three over the next year with villages in Gisborne, Tauranga and Christchurch.
Ms Kinnaird had the view that it was a lower-risk and longer-term strategy to build a portfolio from scratch rather than paying for an established portfolio.
That policy had worked well in New Zealand over many years with Ryman never buying a completed village.
Like New Zealand, Australia also had a sharply ageing population and its retirement sector was fragmented with more small operators, she said.
There was also a large number of not-for-profit operators in the rest-home part of the market.
As was the case in New Zealand, there was a lack of operators focused on providing the full continuum of care, and given Ryman's success in New Zealand with that model, the Australian market provided it with a significant opportunity.
"Our view is that longer-term, the key barrier to entry and critical success factor is mastering the delivery of the aged-care component in an integrated village.
"Given the likelihood of a shortage of high quality aged-care services, guaranteeing high quality care facilities will drive demand and pricing for occupation licences longer-term, reducing pricing risks associated with the residential housing and property development cycles," Ms Kinnaird said.
