Re­tire­ment con­dos: A new idea for the mar­ket

Financial Mirror (Cyprus) - - FRONT PAGE -

For many years now there has been a suc­cess­ful con­cept in Amer­ica and later in Europe, with the con­struc­tion of re­tire­ment hous­ing com­plexes on an or­gan­ised ba­sis, while re­cent de­vel­op­ments in Spain show the trend of this new con­cept which may be of in­ter­est to Cypriot busi­ness­men, prop­erty de­vel­op­ers and in­vestors.

When some­one talks about re­tire­ment homes in Cyprus, there comes to mind the mis­er­able pic­ture of most re­tire­ment homes, which are an em­bar­rass­ment to so­ci­ety (al­beit there are ex­cep­tions). Even though there are no new units with such high stan­dards, the con­cept of re­tire­ment home is an up­scale prod­uct that could tar­get both Cypri­ots and for­eign buy­ers and in­vestors. Th­ese projects have their own spec­i­fi­ca­tions and main­tain a high qual­ity of fa­cil­i­ties for ten­ants. It is a con­cept be­tween whol­ly­owned and an or­gan­ised group with a sin­gle man­age­ment.

Gen­er­ally, the res­i­dence cy­cle in Cyprus starts from when the young cou­ple buys an apart­ment, then jumps to a house of 3-5 bed­rooms, with pool, etc. and when they reach the age of 60 odd years and while the cou­ple may re­main ac­tive, the house turns out to be very big and lonely, while the cost and ef­fort of main­te­nance and the dif­fer­ent lev­els of our homes, make it dif­fi­cult to stay and en­joy living.

Fam­ily ties are no longer what they used to be ; chil­dren no longer visit and many gen­er­ally be­come de­tached, car­ing less for el­derly par­ents, while the num­ber of friends dwin­dles. Pur­pose-built re­tire­ment hous­ing projects are where ac­tive re­tirees want to feel at home, but the projects also re­flect the living con­di­tions and needs of this age. In gen­eral, th­ese projects have the fol­low­ing char­ac­ter­is­tics:

• Or­gan­ised com­plex with 30-100 units, mainly of one or two bed­rooms.

• The units are sin­gle level (ground floor) with a gar­den or if it is on two lev­els, there should be pri­vate el­e­va­tor unit.

• The doors and el­e­va­tors are wide enough to ac­co­mo­date wheel­chairs.

• The units are fully equipped with kitchen fur­ni­ture, air con­di­tion­ing, etc.

• The fa­cil­i­ties in­clude cen­tral ser­vices at the main build­ing (lounge, cards, bil­liards, shut­tles, etc.), spa fa­cil­i­ties with in­door pool, con­ve­nient out­door shal­low pool (1.40m), prefer­ably heated, etc.

• All units have mod­ern se­cu­rity sys­tems, a di­rect line to the re­cep­tion­ist, in­ter­net and nu­mer­ous tele­vi­sion chan­nels.

• Or­gan­ised vis­its or part­ner­ship with a med­i­cal cen­tre for the needs of ten­ants, pri­vate minibus ser­vice, etc.

• Out­door ac­tiv­i­ties may in­clude ten­nis courts, green bowl­ing and other ;aid-back ac­tiv­i­ties and sports which are more suit­able for such ages.

Th­ese units are avail­able in the form of long-term rental or lease, the pe­riod of which de­pends on the age of the ten­ant and the terms of the project op­er­a­tor. As­sum­ing that the av­er­age life­time is 82 years and the buyer is 60 years old, then it is rea­son­able to of­fer a rent of around 25 years. The buyer pre­pays the rent and be­fore the ex­pi­ra­tion of the rental may sell it to a third per­son, in con­sul­ta­tion with the owner or project op­er­a­tor. Thus the orig­i­nal pur­chaser is not trapped in the project for life.

If the pur­chaser is not a per­ma­nent res­i­dent, ie. a for­eign vis­i­tor, he or she may be al­lowed to rent the unit to third par­ties dur­ing the va­cant pe­ri­ods.

To ex­plain, let’s con­sider a ho­tel com­plex where each ten­ant uses the unit as ab­so­lute owner, with­out re­stric­tion, but there is the or­gan­i­sa­tion, ad­min­is­tra­tion and man­age­ment pro­vided by a pro­fes­sional op­er­a­tor. So, each buyer can also have his own car and all the ameni­ties of ab­so­lute prop­erty own­er­ship. The ad­van­tages of such projects are: • The pres­ence of ma­ture aged peo­ple who may even be work­ing.

• The avail­abil­ity of clean­ing, main­te­nance and man­age­ment of com­mon spa­ces. • Ca­ma­raderie and fel­low­ship. • A pri­vate maid use for each ten­ant with the ap­pro­pri­ate room.

• The in­de­pen­dence from chil­dren and friends where a ten­ant may also want less con­tact with the out­side world.

With this con­cept, there ten­ant is not obliged to buy a, say, 2 bed­room apart­ment for EUR 250,000 for a pe­riod be­yond his of her life­time, but may do so for 30 years or less where the cost would be around EUR 180,000 or even 155,000 for 20 years and for 15 years just 130,000 - with the op­tion of rent­ing or sell­ing it.

In such or­gan­ised projects the cost of man­age­ment or main­te­nance charges may be high and could ex­ceed 5,000 eu­ros a year per unit. Then again this cost is not very high as it does not have the ad­di­tional costs we find in other prop­er­ties, such as the main­te­nance cost of home own­er­ship, prop­erty taxes, etc.

Ideal lo­ca­tions for such projects might be 3-5 km away from the coastal towns of­fer­ing views to the sea, but also near enough to take ad­van­tage of fa­cil­i­ties near or with vil­lages, such as shops, su­per­mar­kets and leisure cen­tres. An ideal project trans­for­ma­tion of this kind could be the Ker­mia ho­tel in Ayia Napa that meets most of th­ese re­quire­ments, ex­cept, ba­si­cally, dis­tance from cities and pos­si­bly a dull win­ter. Dur­ing this pe­riod we see low oc­cu­pancy lev­els in ho­tels, and whereas buy­ing or con­vert­ing an ex­ist­ing tourist vil­lages could works, it may not be a per­fect so­lu­tion for lo­cals, even though this would be more at­trac­tive to for­eign­ers. For a sim­ple com­par­i­son, a dou­ble room at a qual­ity med­i­cal cen­tre or re­tire­ment with food charge could be about 1,600 eu­ros per per­son ev­ery month and in­cludes care ser­vices, while when shar­ing a room the cost could drop to 900 eu­ros a month per per­son.

Projects such as th­ese might in­ter­est in­vest­ment funds, in­sur­ance com­pa­nies and prov­i­dent funds for use of their re­tired of­fi­cials, as well as for other ten­ant, for­eign or lo­cal.

This is an in­no­va­tive con­cept and projects such as those popular in Florida or across Amer­ica may soon make their ap­pear­ance in Cyprus, with a new clas­si­fi­ca­tion of Condo Ho­tels whereby re­tire­ment res­i­dences and apart­ments could co­ex­ist.

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.