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The purpose of this paper is to examine public–private partnership (PPP) approaches for the construction of rental retirement villages in Australia and to allocate the investment proportions under a certain project return rate among three investors which are the government, private sectors and pension funds. The apportionment will achieve a minimum overall investment risk for the project.

Capital structure, particularly determination of investment apportionment proportions, is one of the key factors affecting the success of PPP rental retirement villages. Markowitz mean-variance model was applied to examine the investment allocations with minimum project investment risks under a certain projected return rate among the PPP partners for the construction of rental retirement villages.

The research findings validate the feasibility of the inclusion of pension funds in the construction of PPP rental retirement villages and demonstrate the existence of relationships between the project return rate and the investment allocation proportions.

This paper provides a quantitative approach for determination of the investment proportions among PPP partners to enrich the theory of PPP in relation to the construction of rental retirement villages. This has implications for PPP partners and can help these stakeholders make vital contributions in developing intellectual wealth in the PPP investment area while providing them with a detailed guide to decision making and negotiation in relation to investment in PPP rental retirement villages.

Targeting public–private partnership (PPP) rental retirement villages, the purpose of this paper is to bring forward the solution of insufficient research in a non-competitive guarantee (a restrictive agreement) towards the compensation and guarantee costs in consideration of benefit redistribution if the governments are unable to keep the promise on guarantee provision.

Real option principles are applied to assess the public–private investment proportions and the expected return rates of the private sector in a non-competitive guarantee and analyse their effects on the public–private benefit and risk allocations as well as the success of the project. Instead of granting direct capital support, this research accomplishes the compensation of non-competition guarantee by adjusting the project benefit distribution ratios between the government and the private sector to achieve the option value of the guarantee. An empirical example with alternative scales, which is developed from an existing rental village in Geelong, is used to numerically verify the research process.

The results illustrate that the option value of the non-competition guarantee plays an important role in supporting the implementation of the PPP rental retirement village projects. The option value of the non-competition guarantee has a close relationship with the guarantee level and the government guarantee cost, which is positively correlated with the guarantee level and negatively correlated with the government guarantee cost. To reduce the government guarantee cost, the government should carefully determine the public–private investment proportion, appropriately control the return rate of the private sector and approve the construction of the new project after the investment recovery of the private sector.

This research mainly focusses on the economic loss of the government due to the guarantee responsibility. Further research could be conducted to determine the guarantee level more precisely and take the social cost of the government guarantees into consideration.

This research is the first attempt to investigate the government compensation and costs of non-competition guarantee for PPP rental retirement village projects and will enhance the understanding of the nature of PPP applications. The evaluation process and the implementation of the compensation through the adjustment of benefit distribution provides a comprehensive method to analyse the non-competition guarantee of PPP projects and help the parties negotiate in good faith to agree on a method of redress.

The growth in ageing population globally has led to the increase in demand for retirement or aged care homes. Adopting public–private partnership (PPP) in the global retirement village market has become the new approach to address some of the emerging challenges. This paper aims to explore and analyse the critical success factors (CSFs) for the adoption of PPP in the global retirement village market.

An empirical questionnaire survey was conducted with experienced practitioners in the global PPP and retirement village markets. Mean score analysis, normalization range method, Kendall’s coefficient of concordance and factor analysis were used for analysis.

Results show that out of the 27 CSFs identified, the most significant ones in developing PPP retirement village projects are “the age-friendly design of villages”, “appropriate location of PPP retirement village”, “reliable and accessible health and physical facilities” and “effective social inclusion and integration in villages”. Further analysis shows that the 27 CSFs can be grouped into 7 major factor groupings, namely, “effective project monitoring”, “financial support”, “social integration”, “effective contractual arrangement between parties”, “government commitment and support”, “sustainable design of village” and “effective payment structure”.

The outputs of this study will adequately inform retirement village developers, retirement village stakeholders and local government authorities of the best practices they should put in place to ensure the sustainable growth of the global retirement village market.