We have been following in The SOURCE the extraordinary sales being achieved by new village operator LDK Living. It gives the village sector an insight into how a new model can activate a stream of new customers.
Sales opened in November last year, 11 months ago. The village itself opened its first stage in late March – six months ago. Sales to date: 133 contracts or 12 a month. In September, they sold 19 homes on top of the 26 they sold in August.
The village is Greenway Views in Canberra. It is a big site, approximately 60,703sqm in Greenway in Tuggeranong. Originally an office complex for the Department of Social Services, it is made up of ten buildings, which are being repurposed as a retirement village.
The DA was for 380 serviced apartments, ranging in size from 40sqm one-bedroom units to 85 to 95sqm two-bedroom units.
Matching the size of the project, LDK is a joint venture between sector veteran Paul Browne and Cromwell Property Group, a Brisbane property investment fund that now has 220 properties across 11 countries.
The anchor for the LDK model is their ‘One Move Promise’, meaning that a resident will not have to move again to residential aged care. LDK commits to deliver care into their village home or provide serviced apartments or a Care Hub in the precinct.
While this may appear no different to a co-located village with a RAC on site, the positioning is that you always will be in a home environment.
Paul Browne points out that they have three levels of clients buying in. Those that need care now, over 80 and well but frail, and under 80 and well.
The average age of entry is 82.
To allow a seamless and no cost transfer from one apartment to another, LDK is moving from a lease to a licence to occupy contract, which he says is receiving no pushback.
Browne says he never expected this level of sales action ‘in my wildest dreams’.
The other thing he had not expected is the level of participation of residents in the care support – a form of volunteer army.
The business model is based on delivering certainty. The residents pay an entry fee (average $800,000) and when the resident departs the entry fee is 100% refunded. There is no capital gain or any costs/deductions such as refurbishment or marketing.
They also pay an entry membership fee (approximately $185,000), which is not refunded on departure. If they can’t pay this upfront, it can be deferred until they depart at the higher rate of $225,000 deducted from the entry refund.
The weekly fee is $175 fixed for their time in the village.
Home Care packages are utilised and additional care is delivered at cost, in their home in 15-minute increments.
LDK is an aspirational sales proposal, backed by the reassuring care offer, with a simple contract and the promise – you will never have to move again.
