Regular followers will know my belief that small, independent retirement village operators’ days are numbered. That before very long, most, if not all villages, will be in the hands of a smaller number of large operators – either big corporates or big not for profits. Last week came more news to support this trend.
Last week, Australia’s largest home builder and third largest retirement village operator, Stockland, announced that it has purchased eight more villages – made up of 980 village homes in South Australia from the not for profit operator, Masonic Homes.
Stockland paid a total of $75.8 million for the purchases, taking their village homes count up to 9,500 across 69 villages nationally.
Seven of the eight villages purchased are within 20km of Adelaide; the eighth is at Victor Harbour, a popular holiday and retirement destination.
The sale ends Masonic Homes involvement in retirement villages and reflects the transition of smaller village operators having to decide if they will stay in the sector or leave it to the large corporates like Stockland.
A series of unfortunate events
In April 2012, Masonic Homes sold their four aged care facilities so that they could concentrate on becoming a national retirement village player. It hasn’t worked. They stated at the time that they would invest $200 million over the next five years in both acquiring and developing villages but the funds required appear to have been too great.
Only village operators with very deep pockets can afford to buy the metropolitan land to build new villages. And only these large corporate operators have the financial strength to redevelop old, tired villages.
At Frank & Earnest, we believe that in ten years’ time, the vast majority of villages, if not all of them, will be owned by large corporations or very large not for profit organisations. The question remains: is this a good or bad thing? What do you think?
Discussion3 Comments
I think your prediction of what the situation will be in 10 years time is probably right when it comes to large villages in major metropolitan areas. This form of retirement living will also suite the relatively small proportion of older people who do want to live in larger retirement villages.
However, most older people would prefer to move into smaller homes that have been specially built to meet their needs, in their local neighbourhood if these homes were developed in much smaller clusters, say 4-6 dwellings. I know I would choose such a development when it comes time to downsize, as opposed to a large retirement village.
I think that in 10 years time there will be far greater choices of retirement homes available in small groups in nearby neighbourhoods to where older people now live, ones designed so that people like me can live in them to the end of their lives with services brought in to care for me if needs be, without having to move into a high care facility. Some creative people will find a way to build these small groups of homes for people like me I am sure.
I have lived in my Village for 12 years now, at the time I came here it was owned by a small company, we were treated like valued members of the Community, had nursing care day and night (one of my main reasons for coming here) as I lived alone, and would get 3 day migraines etc.,
However after about 4 years or so a huge Company bought us out. Staff reduced to almost no staff (sometimes I feel we are running the place ourselves) to look around at the parts of the Village that need care and attention is disheartening. My fees have quadrupled in that time also. I just want what I am paying for, surely not too much to ask.
When I have tried to get a figure from head office, to see if I can afford to move, months have gone by, then I get a letter, with TBA (i presume to be advised) on refurb costs etc etc) they must know how much it will be for all these charges. Just so frustrating, and alone I feel defeated, so I have given up.
For several years prior to my retirement I worked for the then Department of Health and Ageing. The residential aged care sector has already seen big operators swallow up the smaller residential aged care facilities and it would seem the same is happening in the retirement village sector.
On several occasions I facilitated groups of staff from residential aged care facilities and one of the exercises I conducted was as follows: Imagine yourself 75 to 80 years old needing residential aged care. Describe the type of residential aged care facility you would like to live in.
Inevitably all the responses were the same: I would like to be in a small facility, located in the area in which I live now. I would like that facility to be staffed by people who live in that same area and for there to be an on-going connection between the aged care facility and that community. I do not want to live in a ghetto.
This is the complete opposite to what has happened. Economy of scale is the catchword for the big operators which means building larger and larger complexes based on a medical model of care. To cut costs less staff are employed and those that do work within these facilities are under huge stress as there is little time for the personal contact that is desperately need by all human beings – staff and residents alike.
As was recently suggested to me a clash of culture develops between the operators and the residents. One is based on profit the other on quality of life.
There are parallels within the retirement village sector although the big difference is that the people in retirement villages are mostly still able to live independently but as the operators grow bigger and bigger so the distance between them and the residents of their retirement villages expands which contributes to a very unpleasant “them and us” culture. It is the village manager who is the “meat in the sandwich”, but that’s another issue.
The way of the current world is that the trend to bigger and bigger owner companies will continue.
Possibly what residents of retirement villages need to do is to try to keep the lines of communication open amongst themselves and between themselves and the management of their village. The large and growing companies that own retirement villages become so far removed from residents that communication with them is nigh impossible.