A fascinating side comment by Michael Gunn (pictured) of property agency CBRE was that “the four majors account for 49% of all the retirement units in NZ and run their businesses as a ‘going concern’. All the rest run theirs as a ‘property’ business”.
And this was the overriding theme of the sessions we sat through. Everything related to ‘property’ and sales of property. There was little discussion really of care and services.
This is despite the fact that nearly all villages are now collocated with serviced apartments and residential care. In fact virtually no standalone aged care facilities have been built outside of a village in the past six years in NZ.
The four majors (Ryman, Summerset, Metlifecare and Arvida) are all so large in the NZ economy that all of them are now in the Top 50 businesses on the NZ Stock Exchange. They need to extract every dollar out of every service they deliver to justify the up to 30 times P/E ratios they enjoy.
Most interesting was Richard Hinchcliffe’s comment when he said that the public now understands the retirement village value proposition – security and a care path to end of life.
The public knows what ‘villages’ are. Now they just have to build them. And they are.
As Michael Gunn pointed out, 6,000 new RV homes will be built in the Auckland region alone over the next three years (population 1.4M). In Australia we will deliver about 8,000 in that time for the whole country with a population of 24M.
