The con­cept of re­tire­ment homes

Financial Mirror (Cyprus) - - FRONT PAGE -

For many years, we have seen in Amer­ica and then in Europe, the con­struc­tion of re­tire­ment hous­ing com­plexes on an or­gan­ised ba­sis, with the re­cent de­vel­op­ments in Spain sug­gest­ing trends of a new con­cept, which might be of in­ter­est to Cypriot prop­erty devel­op­ers and in­vestors.

When some­one refers to re­tire­ment homes, ev­ery Cypriot’s mind goes to the seedy im­age of most old peo­ples’ homes with low- to mid-in­come pen­sion­ers, which can only bring shame on us. Even though there are new units with high stan­dards (at a cost of around EUR 1,500-2,000 / month per per­son), the con­cept of ‘re­tire­ment res­i­dences’ is an­other more up­scale prod­uct that should tar­get both Cypri­ots and for­eign buy­ers and in­vestors. Th­ese projects have their own high qual­ity spec­i­fi­ca­tions and fa­cil­i­ties for ten­ants. It is a ‘con­cept’ be­tween wholly-owned and or­gan­ised group with com­mon man­age­ment.

Gen­er­ally, the ‘home cy­cle’ in Cyprus starts from the young cou­ple that buys an apart­ment, then jumps to a house of 3-5 bed­rooms, per­haps with swimming pool, etc.. When it reaches the age be­yond 60 years and although the cou­ple re­mains ac­tive, the house is too big and empty, while the cost of up­keep and main­te­nance work and the mul­ti­ple lev­els of a house make it dif­fi­cult to stay and en­joy liv­ing there. Fam­i­lies are no longer tied as it used to be years ago, chil­dren do not visit or pay spe­cial care to their par­ents and the num­ber of friends dwin­dles, as driv­ing too be­comes dif­fi­cult. Projects of re­tire­ment homes have ac­tive re­tirees who want­ing to keep their own home, but they want this to re­flect the liv­ing con­di­tions of their age. In gen­eral th­ese projects have the fol­low­ing spec­i­fi­ca­tions: • Or­gan­ised group with 30-80 units mainly of one or two bed­rooms.

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

• The doors and el­e­va­tors are wide enough to wheel­chair ac­cess.

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

• The fa­cil­i­ties should con­sist of the cen­tral build­ing for the res­i­dent (bar, gam­ing room, bil­liards, darts, etc.), spa fa­cil­i­ties and in­door pool, com­fort­able out­door shal­low pool (1.40 m deep), prefer­ably heated, etc.

• All units must have mod­ern se­cu­rity sys­tems, with a di­rect con­nec­tion to the in­ter­net and nu­mer­ous tele­vi­sion chan­nels.

• Or­gan­ised vis­its or reg­u­lar link to the med­i­cal cen­tre for the needs of the ten­ants, by pri­vate minibus or nearby pub­lic ac­cess.

Th­ese units are avail­able in the form of long-term rent­ing, the pe­riod of which de­pends on the age of pur­chasers and con­di­tions of the project. As­sum­ing that the life­time is 82 years and the buyer is 60 years, then it is log­i­cal to rent for




(fit­ted 25 years. The buyer pre­pays this rent and if be­fore the ex­pi­ra­tion of the rental would like to sell the lease, they can do so for the rest of the rental pe­riod to a third party, in con­sul­ta­tion with the main prop­erty de­vel­oper. Thus the orig­i­nal pur­chaser is not trapped there for life.

If the pur­chaser does not re­side per­ma­nently (eg. for­eign­ers) they could be al­lowed to rent the unit to third par­ties dur­ing the pe­riod of va­cant pe­ri­ods.

Ac­tiv­i­ties may in­clude ten­nis courts, green bowl­ing, laser shoot­ing, etc., which are more suitable for such groups.

To avoid any con­fu­sion, I am talk­ing about a “ho­tel com­plex” where each one uses the unit as the ab­so­lute owner, with­out re­stric­tion, but there is the own­ing or­gan­i­sa­tion, ad­min­is­tra­tion and man­age­ment. So each buyer can have his own car and all the ameni­ties of any prop­erty with ab­so­lute own­er­ship The ad­van­tages of such projects are: • The ex­is­tence of ma­ture per­sons who may still be ac­tive in work or not.

• The avail­abil­ity of clean­ing, main­te­nance, man­age­ment of com­mon spa­ces. • The ex­is­tence of ca­ma­raderie and fel­low­ship. • The abil­ity to use pri­vate as­sis­tance (live-in maids) in the unit of each pur­chaser in a rel­e­vant room.

• The in­de­pen­dence from chil­dren and friends, as maybe the re­tirees may not wish con­tin­ued con­tact with them and want their peace of mind.

• You are not obliged to buy the house, for ex­am­ple a 2bed­room apart­ment at the go­ing mar­ket rate of EUR 250,000 for a pe­riod that ex­ceeds the life ex­pectancy, but the cost would then be around 180,000 for 30 years, for 20 years about 155,000 and for 15 years 130,000 - with the pos­si­bil­ity of rental or re­sale.

• It is un­der­stood that in such or­gan­ised projects the cost of man­age­ment are main­te­nance charges are high and may ex­ceed EUR 5,000 a year, but then this cost is not very high when con­sid­ered as an ad­di­tional cost of an ab­so­lute-owned prop­erty.

Ideal lo­ca­tions might be 3-5 km away from the coastal towns to sites that of­fer views and fa­cil­i­ties with nearby vil­lages of­fer­ing shops, su­per­mar­kets, leisure cen­tres, with the main con­cern be­ing the com­fort of the space and open ar­eas.

An ideal de­vel­op­ment could be the re­cently sold Ker­mia Ayia Napa ho­tel that meets most stan­dards, ex­cept, ba­si­cally, the dis­tance from the ma­jor towns and the dull win­ter pe­ri­ods.

In this pe­riod of low oc­cu­pancy at ho­tels, buy­ing or con­vert­ing ex­ist­ing tourist vil­lages could works, although not an ideal so­lu­tion, but is tar­geted pri­mar­ily to for­eign­ers.

Projects such as the above could be of in­ter­est to in­vest­ment funds, in­surance com­pa­nies, prov­i­dent funds for use by re­tir­ing of­fi­cials and oth­ers (for­eign or lo­cal). As in­no­va­tive as it may seem, re­tire­ment com­plexes like those in Florida will soon be mak­ing their ap­pear­ance in Cyprus.

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