Today we cover Mark Bindon and Franco DePasquale announcing their re-entry to the retirement village sector with three separate village projects of around just 25 homes each. Meanwhile Adrian Puljich announced at the LEADERS SUMMIT his new Aliria brand will deliver Pocket Park infill developments. Small is in.
Both point to reduced size of projects being the answer to new development in Australia. Mark quotes the fact the costs of construction now mean to do a larger project is a far bigger risk commitment, requiring far bigger prices to win your investment back.
A 25 home project at premium prices is far easier to sell than 85 homes at the prices required.
Adrian told us that smaller is easier all round. He is looking to 50 homes in his Pocket Parks.
Mark and Franco are targeting the premium market, stating today’s seniors housing customer demands that. Their thinking is $1.75M to $3.0M.
Adrian is seeking $1M+ for his Pocket Park homes in say Rockhampton.
The sacrifice is that they won’t be land lease communities or retirement villages as we know them, where the rule book says 85 is the minimum number of homes to both pay for the facilities and staff required, and have a diverse but inclusive community.
And what about home care? I expect small will still be desirable for a care provider if say 12 of the 25 homes require a care service, making them a desirable group of customers.
Interestingly, Mark and Franco are going hard on the positioning of wellness, with upmarket state-of-the-art wellness facilities. Also not your traditional retirement village.
The good news is that these new retirement villages and pocket land lease communities are springing up in places that haven’t seen these seniors housing options in many years, like central Rockhampton, Port Stephens and Coffs Harbour. They will keep the concepts fresh and market acceptable.
Meanwhile only the biggest village and LLC operators with big balance sheets will be able to develop the traditional models, if they can find the land and can make the project feasibilities work. And there aren’t many of them.
