Retirement village sale a chance to ‘invest in the future’

5:00 AM Saturday August 8, 2015 Colin Taylor

Aerial view of Mt Eden Gardens Retirement Village which is for sale 467 Mt Eden Rd

The sale of a retirement village in Auckland’s city fringe suburb of Mt Eden is being billed as presenting a prime opportunity to tap into a burgeoning industry servicing the retiring ‘Baby Boomer’ generation.

“People can see the growth in the aged care sector so now’s the time to invest in the future,” says Brent McGregor of CBRE New Zealand who, with colleague James Lee, is marketing the Mt Eden Gardens Retirement Village at 467 Mount Eden Road for sale by expressions of interest with a deadline of 4 pm on Thursday September 10. CBRE has a sole agency on the sale of the property and going concern business on behalf of Mt Eden Gardens Village Partnership Limited.

“Statistic released in June 2015 show that the 65 years and over age group nearly doubled in sized between 1981 and 2013 with more growth to come,” Lee says.

“The 65 plus age group made up 14.3 per cent of the New Zealand population in 2013 and that’s projected to reach 23.8 per cent in the next 30 years.”

McGregor says the demographics clearly demonstrate the investment value in purchasing an established, resident-funded retirement village in one of Auckland’s “exclusive” city fringe suburbs.

“The village has a growing cash flow profile consistent with retirement property assets in early stages of occupancy maturity. With current interest rates at historically low levels, this is a great time to invest in a well-presented and exceptionally located retirement village.”

“Retirement village and aged care operators are consistently delivering year on year growth, with some reporting record profits for the latest financial year.

“The momentum in the retirement village sector right now is with new land acquisitions -including two large sites in eastern and central Auckland in recent weeks that were both marketed by CBRE.

“Opportunities to purchase already established retirement villages are rare, particularly facilities based in Auckland, and almost never in affluent suburbs like Mt Eden.”

McGregor says the current manager is willing to stay on which is expected to increase the demand from a wide range of potential investors, including those that may never have invested in the sector before.

Originally the location of the Rawhiti Surgical Hospital, the property was converted to its present retirement village use in 2003, when Mt Eden Gardens Retirement Village opened its doors.

The expansive 4417 sq m site allows access from Mt Eden Rd and Fairview Rd, with wide frontages to both roads, giving it a high profile position in front of thousands of vehicles passing each day.

Built over two levels above a basement, the main component of the village incorporates 35 independent living apartments and communal facilities including lounges, a TV room, dining room, spa pool, workshop and petanque court. A central feature courtyard acts as “the heart” of the facility.

Lee says the village has moved with the times, adapting its spaces and configuration to cater for the varying ages of its residents.

“It is well set up to meet the needs of today’s retirees and those of the future. Independent living apartments have a variety of designs offering a range of options.

“Floor areas for the units range from 29 sq m for a studio apartment up to a maximum of 101 sq m for a two bedroom apartment along with some good decking areas for outdoor living.

“An update to the facility in 2007 included extending some of the apartments into two-bedroom units, reconfiguring the existing reception area into a new apartment, and adding a new ‘media room’ to the shared space.

“All of the apartments are linked through wide internal corridors with a single hydraulic lift system to the north end of the building and a single person ‘magic carpet’ lift to the south end. These links ensure residents have close access to each other and to assistance if they need it while providing space and independence permitting residents to enjoy their privacy and feel at home.” 

The Mt Eden Gardens Retirement Village generally accommodates one resident per unit, with a few couples occupying the larger units. The typical length of stay for residents is between four and five years, although 37 per cent of the units have now been occupied for more than five years.

Lee says the average occupancy period provides the operator with a good line of sight into the future performance profile for the facility. He says that in recent years the average entry age has increased upwards of 80 years consistent with the level of service provided at the village.

The village sits within a popular location directly to the south of Mt Eden Village less than five kilometres south of the Auckland CBD.

McGregor says the property and business could not be sited in a better location within an ideal population catchment area that has excellent public transport connections on the doorstep and easy motorway access.

Neighbours include many beautiful character homes while local amenities include specialty shopping stores, pharmacies, hairdressers, banks, bars, cafes and restaurants. For active residents, the Mt Eden tennis club and bowling club are just a short distance away, as is Mt Eden Domain and volcanic cone.”

Lee adds that the Gillies Hospital and the Southern Cross Hospital Brightside are less than 1.5 kms away from the retirement village. This gives residents and their families peace of mind that high quality medical care is just minutes away.”

Lee says of significant interest to investors in the aged care and retirement village sectors is the fact that people aged 85 years plus now make up a growing proportion of the overall 65 plus age group. He says the group of people aged 85 years and older grew from 10.8 per cent in 2001, to 12.1 per cent in 2013.

“That figure is now projected to skyrocket to 19.7 per cent by 2043 so the opportunities in this area are clear to anyone.”

Brent.McGregor, CBRE.jpg

Brent McGregor of CBRE New Zealand.