Across 13 speakers at our LEADERS SUMMIT Masterclass last Wednesday, the repetitive theme was that tomorrow’s retirement accommodation customer (the Baby Boomer) expects ‘community’ to be packaged into the living environment. And they want cash today to live well and they want to control their life - not have their life controlled. Build to Rent ticks all these boxes.
More sophisticated concierge services that incorporate community building and care guidance are emerging, like Chanje Partners and “Move, Nourish, Connect” by Five Good Friends.
With Build to Rent, customers can sell their family home at, let’s say, $1.5 million, and put that money in the bank or an investment to pay their rent – but they have control of that money to do what they like. Our figures show that, in real dollar terms, they are better off as BtR customers than village customers over 10 years.
Meanwhile, they live in an intergenerational building and neighbourhood with community meeting facilities, concierge and home care delivered.
Luke Mackintosh, Real Estate Advisory Partner at EY, took the Masterclass audience through why Build to Rent is the first property class to be supported from its launch by institutional investors, and showcased that over 40 buildings are in development now across the country.
In this issue of The SOURCE, the ACT Government releases its first plot of land for Build to Rent, and confirms it is offering tax and other reliefs to speed development.
The retirement village operator who looks at an average of seven years to develop a retirement village, usually a vertical village with all the inherent risks, and then has to wait 7 to 14 years to receive a regular income stream, could look at Build to Rent as an alternative.
There are many appeals, but the most significant is cash flow. From day one, the operator receives rental income, and you have freedom to control your pricing year-on-year and not have the Retirement Villages Act to contend with.
Mission-based organisations can mix and match the tenancies with affordable housing and essential services, as well as older Australians – plus consider the concentration of potential home care clients. You have a wider market for GP and allied services to be placed in the ground floor commercial areas, servicing the older residents as well.
If you are building a retirement village that hits the market in seven years’ time, will the Baby Boomers want it? The image of a retirement village may not appeal, and by then the number of Build to Rent options in every city will be big.
Food for thought.
