Residential Park Living The Affordable Alternative for the Over 50’s July 2013
Investment Capital Halcyon Investment Capital halcyon is a perpetual, inflation linked, low risk, asset backed cash flow, with potential to mark to market with additional protection against increases in operating costs. NOI $ Time
Gateway Lifestyle - Current Status Gateway Lifestyle Residential Parks (GLRP) offer an alternative living option for the Over 50’s demographic. The group has sold in excess of 100 new homes across 4 parks. Ten (10) Parks along the eastern seaboard valued at $115m + with 1,700+ sites Development pipeline of over 400 homes for delivery over the next 3 years Proven sales and marketing. Strong desire to acquire more parks to establish critical mass and operational efficiencies Our strategy has been to focus on metropolitan locations where the demand is based purely on location and affordability rather than on services and amenities
Background to Strategy – 2010/11 There is five million Australians age 55 and over. Within the next 40 years that number is expected to exceed 11.5 million, with projected growth of 150,000 people per annum. Within a generation, a 1/3 of Australians are going to be >55 years and close to a 1/4 >65. Assuming that all those aged 55 and over were to move into a new dwelling, there will be a need to create 90,000 new homes each year across the country for our target market. However, most 55 plus households can’t afford to move into retirement living arrangements. The high entry and rental costs of current retirement and aged care facilities prevent them from doing so. The more practical requirement is for around 15,000 new retirement dwellings per year, 3/4 of which are needed across the eastern seaboard. This market segment is undersupplied. Estimates suggest that new retirement housing construction has ranged between 3,500 to 4,250 new starts each year over much of the last decade. About 80% of 55 plus households own their home outright. When 55 plus households do move, it’s primarily for lifestyle reasons (35%), affordability (25%) or the desire for a smaller and more hassle-free home (20%) Source Michael Matusik
PCA Press But, as the population ages, the Government’s ability to pay for the extra places needed will decline as its taxation base is eroded. Where the government can’t do the job, the private sector will have to step in, says Mary Wood, the newly appointed executive director of the Retirement Living Council. Another shift is in the average age of entry into retirement communities. Ten to 15 years ago, people moved to villages in their early 70s. But now they’re closer to 80 years old, says Jason Anderson, chief economist at property sector forecaster MacroPlan Dimasi.
About Gateway Lifestyle Residential Parks
Retirement living options OPTION 1: OPTION 2: To remain in the home To relocate to a Retirement Village or Residential Park Locks away the asset/cash value Releases cash to invest, to live on and to provide a financial buffer Ongoing maintenance and expenses Lower operating costs with co-op purchasing Poor maintenance will affect value Replaces old house with a new house Renovations to support ageing process Designed for retirement, lifestyle and ageing Need for increased security Emergency support at no extra cost
What is a Residential Park The fundamentals of this style of development embrace the principle that it is a combination of traditional land development in regard to civil and infrastructure works, together with a cash-flow business over time, incorporating the social agenda of affordable metropolitan community schemes Land is not subdivided in title. It is held englobo and owned/operated by the developer or a corporate vehicle or a Fund. Residents lease an identified area within the englobo parcel and locate a home (manufactured off-site) upon that designated area or site Regulated by state based Acts – (MH Act Qld – Residential Parks Act NSW soon to be Residential (Land Lease) Communities Act )
Key Difference - Governance The whole premis to the legislation addresses fundamental issues with current RV legislation. Extracts from the recent draft Bill • The draft Bill sought to provide appropriate protections for home owners, while also recognising the needs of operators to develop and sustain efficient and effective business operations. Recent proposed NSW changes have introduced the potential to also incorporate DMF arrangements, however as a group we will strongly resist introducing these measures as they dilute the benefits of the current arrangements. The strength of the legislation is its simplicity and fairness
Target market Semi-retired, retired singles and couples aged 50 and over who are looking to lower their cost of living and free up capital Study by Monash University identified the following to be most important to our target market: • Wellbeing; • Financial position and cash flow; • Achieving lifestyle aspirations; • Living options that are affordable; • Home and garden maintenance; • Social and family connections.
Key selling points Residential Parks create: • Financial independence By freeing up capital, our residents have greater freedom to do all the things they want to do and achieve in retirement. • Clarity and peace of mind Our residents can enjoy clarity and peace of mind over their living arrangements and be part of community decision-making on what’s most important to them. • Low maintenance living Residents enjoy all the benefits of owning their own home, without spending time and money on maintenance requirements. • Community lifestyle Our residential parks provide social and recreational opportunities within a gated community.
Why buy in a Residential Park? No stamp duty Simplified contract of sale No entry or exit fees No rates or taxes No strata/community levies No sinking fund levies Single level dwellings Gated entry and community facilities Community relationships
Residential Park Living options Residential Park living has now shifted from a caravan and annexe to high quality manufactured homes whilst retaining affordability. Residential park living is transitioning from eyesores The Present The Future into quasi-subdivisions with community infrastructure providing lifestyle aspects not achievable from standard subdivisions.
Residential Park Living today
Residential Park Living today
Residential Park Living today
Why live in a residential park? Lifestyle Economic Residential park living is attractive on an economic and Upfront costs of entering a park are in most cases significantly lifestyle front. below the upfront costs of entering a comparable retirement village or residential property. This is due in part to the resident Modern residential parks provide residents with resort not needing to purchase their land or pay any stamp duty on style facilities such as gated security, recreational the acquisition. facilities, bowling greens, pools and tennis courts. The ongoing costs of living in a park (site rent) are in most Residential parks provide unique opportunities to live in cases less than the ongoing costs of living in a retirement suburban or sea change locations at a reduced cost. village (service charges) and not much greater than residential A community style of living with residents clubs, activities property (rates and body corporates). and like-minded neighbours. Pensioners, both Centrelink and Veterans Affairs, are eligible Park managers are responsible for maintenance, allowing to receive rent assistance towards their weekly site rents. Such residents to focus on living. rent assistance is not available when owning residential property. Simple, plain English purchase contract and site agreement (as opposed to complex retirement village lease contracts). Exit costs are minimal as there are no deferred management fees of retirement villages and residents are able to retain capital gain realised on sale (capital gains are often shared with the manager in retirement villages).
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