Richard de Haast is a lateral thinker with a track record. We do need more of him.
Sitting behind Richard in the photo above is Scalabrini’s 1980s decommissioned aged care home on the absolute waterfront of Sydney Harbour in Drummoyne. He is redeveloping it as a retirement village. It is likely his last.
He will only accept residents aged 75+ (no exceptions) and he expects all of them to pass away in their village home. Home care he believes will transform villages – and any other form of accommodation.
Despite the fact that he is a ‘village man’, having been the CEO of the big New Zealand village operator Metlifecare (now owned by Swedish investment fund EQT), he tells us the profits of this project will go into affordable housing for migrants, Scalabrini’s original mission. Villages are no longer the best strategy.
Richard believes that the big competitor to retirement villages will be the apartment builder Meriton.
Why will people buy into a retirement village when they can downsize to a Meriton apartment with Level 5 Home Care packages delivered into them (with 100% capital gain and no DMF), he asks.
Meriton is the largest owner and manager of serviced apartments; they know how to look after people very well, says Richard.
Why tell you all this? Because everywhere there are signs that potential village customers are not waiting for the village sector to deliver them seniors accommodation to the old formula.
Build to Rent is winning between 11% and 16% of its customers from ageing downsizers who can see the attraction of holding on to the $1 million plus in cash from the sale of their family home, rather that giving up their cash to a village operator, and their housing freedom.
Australians are also retiring to Bali and Thailand. They are paying their children to care for them at home or in a granny flat in the back yard. They are finding options.
But the leaders of village operators are not finding new options, not creating new products and consequently not assuring their shareholders of a long term future.
Richard told us that he is planning for when government home support will hit $90,000 a year. He says he will be ready with a business that will place live-in staff recruited overseas. He doesn’t think it is far off. (By the way, Canada has offered Permanent Residency for live-in carers for about seven years – check it out here).
With the cost of construction making many medium density projects unviable, is it time to follow Richard and develop new thinking on how to win customers that are not ‘same same’ but very different?
Browse villages.com.au for the latest on Seniors Living including availability.
Richard de Haast's lateral thinking speech at LEADERS SUMMIT 2024
