Are retirement villages now real estate gold?
They recognised five, seven, ten years ago that the village offering of a secure later life, underpinned with quality design and construction, will win cashed up Baby Boomers.chr
This past week has witnessed the confirmation that astute, mature Australian village operators can build – and sell – the best retirement villages in the world.
They recognised five, seven, ten years ago that the village offering of a secure later life, underpinned with quality design and construction, will win cashed up Baby Boomers. $4, $6 and $8 million village homes are now real and acceptable.
Within seven days, veteran retirement village operator Kevin Ryan will open his new Bowral village with sales of $320 million, while also paying $173 million for a suburban Sydney village development block. (If that is the land cost, what will the apartments be sold for)?
Not For Profit VMCH opened its St. Clare village in suburban Kew in Melbourne last Friday, with 103 apartments valued at a collective $250 million (one penthouse tips the scale at $4.6 million).
Last Wednesday, Levande opened its vertical village The Cambridge in very suburban Epping. The development is the third tallest village in the world at 28 storeys and valued at $180 million – including a $2.4 million penthouse.
Last month, Patrick Abolakian and his family opened the low rise Hyegrove in Sydney’s Willoughby, with apartments in the $4 million mark for three bedrooms.
In other words, customers are looking past the traditional idea of villages being a downsizing, lower cost accommodation offering. They are clearly placing real value on the complete value proposition – a safe haven in an uncertain health support world, backed by trust in an operator that stays with you on your health journey and has skin in the game through capital appreciation and reputation.
Added to this is the extraordinary quality that these operators are building into these new villages. Again, they have skin in the game – they are building in quality that will last 40 to 50 years.
And the yield these developments are delivering? 7% is being quoted, which makes villages one of the best property sectors for investors, safeguarded by demand increasingly exceeding supply.
Retirement villages are, at last, emerging as real estate gold.
