As reported last week Patrick Smith has purchased Southports Grande Pacific retirement village which has been in receivership for five years. It was first offered for sale six months ago by PPB Advisory.
The only real high-rise village in the country, it was built by Queensland developers City Pacific and Hallmount at a cost of $70 million at the commencement of the GFC. It collapsed financially in 2009 with approximately 20% of its 108 apartments sold. Today just 21 are occupied, meaning that Patrick has 87 apartments available for sale.
Receivership, rumours of structural problems and flooding plus the builder going into receivership before rectification just added to the risk profile of resurrecting a 25 story retirement village. The fact that it is located in the centre of the (until recently) moribund QLD SE corner housing market has not helped.
Patrick has a reputation for driving new businesses but is understandably little-known in the sector; he has just 30 months experience in villages and care. But it has all been good.
A pharmacist by training he used that retail and suburban experience 20 years ago to build a video rental empire that became the Australian arm of Blockbuster video, which he sold out of successfully.
He then spent 10 years looking for a new area to commit to when approached by Paul Brown to invest in the supported living retirement village model. He bought two adjacent villages in Toowoomba and they created Freedom Aged Care but operating under the Retirement Village Act.
Patrick says he discovered his sweet spot, a young industry with significant growth potential combined with positive outcomes for customers.
Following Patricks hands-on involvement, Freedom was a commercial success, resulting in Paul Brown and an investment partner offering to buy him out which they did in August.
His plan for Grande Pacific is to create a wellness environment where resident care is actively managed by staff. They will target a 50% blend of younger retirees seeking lifestyle with a 50% of ageing residents seeking care support in their own home.
At Freedom they developed a care insurance product that funded care services over and above government funded care packages, a concept they will introduce at Grande Pacific.
Patricks ownership has been welcomed by residents given his commitment to invest in revamped community facilities plus hold general service fees even though they have not changed in seven years.
With most of the 108 apartments featuring water views Patrick is confident he will be able to command prices from $400,000 for a one-bedroom apartment up to $1.5 million for the remaining four-bedroom penthouse. He has 87 of them to sell.
