At the LEADERS SUMMIT, speaker after speaker identified the retirement village model of seniors’ accommodation – with care – will emerge as the strong preference of customers.
The Royal Commission identified that virtually no one wants to move to high care. At the same time, people are living longer and the emerging Baby Boomers’ market will forsake handing over a large inheritance for self-funding support as they age.
This trend is being promoted by Government as well, with its emphasis on home care.
More big operators in village sector
In my presentation, we looked at the capacity for growth of new seniors’ accommodation stock, focusing on the number of operators, number of potential customers, access to capital and access to land.
This is before shifting Government policies and funding coming out of the Royal Commission.
My conclusion is that villages will grow faster in five years’ time and land lease communities will most probably never catch up.
The basic facts are:
- The average age of new village residents is 76 while LLCs are 63 – the ‘need’ and value proposition is vastly different and more persuasive with villages
- In five years, we predict there will be just four to six big LLC operators compared to 20 big village operators – so the sheer executive capacity to develop more sites is with villages
- Today, competition for LLC sites is intense and is mopping up available large scale broad acre land – in five years’ time what land will be left? – while the village model will be middle-ring metro and CBD-focused regional apartment sites, with demand being that village operators will be able to compete with residential developers
- More capital will open up for village developers, especially the big operators with experience
The net result, our prediction that LLCs will be delivering the equivalent of 20 new LLCs at 250 homes in five years’ time each while village operators will be delivering 50 to 100 new (vertical) villages a year of 50 to 100 homes, or up to 10,000 a year.
It may take 10 years for LLCs to catch up to villages – if they do at all.
It is part of the greater story of the future of villages discussed at the LEADERS SUMMIT.
You will be able to read the full story in this week’s edition of SATURDAY, which will arrive in your inbox at 6am Saturday morning.
We explain why village demand will be so much greater than LLCs, and more.