Younger retirement accommodation is being corporatised. Is this a good thing? Can the corporates build genuine ‘community’? Do we care?
Younger retirement accommodation to us is land lease; the average age of entry is 60+. They are seeking downsizing, freed up cash and lifestyle.
The average age of retirement village customers continues to creep towards 78 and older; they are increasingly seeking a care pathway.
And the corporates are taking over land lease, and fast. Check out the graph above, provided by land lease specialists Chadwick Property Valuers.
Significantly, the Top 10 are 56% of all LLC home sites and have $8.5B in new home and park development today. This calculation is based on 20,194 homes at $400K each ($8.1B) and $400M in community facilities and works.
Note, this figure really doesn't take in Mirvac’s Serenitas activity yet, which will expand LLCs into its master planned developments.
This growth is thanks to the land bank strategy of incorporating land lease into master planned communities. This in effect plants an Over 55 community in the centre of a new home buyers’ (read young families) development.
Is this soft intergenerational living? Perhaps yes.
Is this attractive to the new LLC customer and resident? We feel yes.
The large corporates are now very sophisticated in tailoring built environments that facilitate positive experiences in daily living. The LLC resident has this younger vibrancy on their doorstep but will still be able to retreat and turn off the lights at 9pm.
More importantly, these corporates are going to be planting land lease in masterplans closer to metro areas. This will speed up the universal understanding and acceptance of land lease.
The big end of town is betting on themselves that they can deliver accommodation that people will pay for now to buy a house and they can deliver a favourable experience over the longer term as they continue to pay sizable weekly fees.
Read more about the land lease operators diversifying into master planned communities, and much more, in the latest issue of SATURDAY – subscribe here.
