Fletcher retirement-village units go up
Business has invested hundreds of millions in area, CEO says
Four Auckland terraced homes are up at Fletcher Building’s first retirement village but all 48 new places are due to be finished early next year, going from $725,000 to $1.2 million.
Steve Evans, Fletcher residential and development chief executive, said construction was advancing at the new village, Red Beach, on the North Shore where Fletcher has already built hundreds of homes.
But now it’s adding homes for those aged 70-plus at the site 36km north of the city centre.
“All 48 terraced homes are under construction and will be finished by next March, including the community building,” Evans said.
The site is under 1ha and unlike most other new retirement villages, will have no rest home or hospital. Instead, Fletcher has struck deals with support businesses.
The village is branded under the new Vivid Living.
Last weekend, the show home opened at 3a Tiromoana Drive. No stand-alone homes are being built and no pre-sales had yet been made.
“Our preference is to sell completed homes. We want people to go and see them,” Evans said.
Most people who had visited the display home so far already lived within a 5km radius of Red Beach, he said. They wanted to stay in the community but release money from the sale of existing homes.
The village will have no bowling green, no cinema, no indoor heated pool, no crafts areas or hairdressers.
“Residents will have access to [some of] those places, though. At Red Beach, a 500m walk gets you to shops. We are therefore able to offer the lower deferred management fee,” Evans said of Vivid only keeping 15 per cent of people’s money instead of the 20-30 per cent kept by other listed village owner/operators.
The village is beside Red Beach land where Fletcher Living has built more than 400 homes in the last five years in terrace, stand-alone and duplex configurations. Evans said the business had invested hundreds of millions in the area.
Smoke and personal alarm systems at Vivid’s Red Beach retirement village will be managed by Securely. Private Care NZ and Spritely would support residents’ health and care needs, Evans said, in place of an onsite rest home or a hospital.
A one-bedroom, one-bathroom terraced home is going for $725,000. A three-bedroom, two-bathroom place is $1,295,000.
Fletcher announced Vivid in December last year.
A second village is planned near Manukau: Waiata Shores will be a 27-unit project and like Red Beach, Fletcher has built free-market homes on its land there too.
Evans said Vivid would also share capital gain on properties, which most other operators didn’t. When the time comes to leave, residents will get half the capital gains, less the cost of refurbishment.
The Red Beach opening comes at a time when retirement village operators are sometimes having to wait longer to sell units.
Jeremy Nicoll, chief executive of the $3.6b Arvida, this week announced the half-year result.
Asked on the investor call about the housing market’s effect on retirement village sales, he said a “bit more of a grace period” was given to allow some people time to sell their homes to move into villages.
His comments indicated a stronger level of interest by retirement village companies in the slowing house sales market. But he did emphasise to the analysts and investors that Arvida sales remained strong.
Other villages have been unable to sell units because house sales are falling through. In September, a Tauranga village was at the centre of publicity for not repaying a widow $790,000 10 months after she left.
Two sources and the village’s manager identified the place as Woodlands but Consumer did not name it when it published the case of “Mary”, aged 80, who said she was in financial limbo because she couldn’t get the $790,000 out that she paid.
She left the village after a year. Her husband was diagnosed with terminal cancer and had to be moved to a place with hospital-level care. She couldn’t afford weekly fees at the village on top of the care.
So last September, she told the village operator she needed to go, terminated her licence to occupy and said she wanted her money back.
It couldn’t be repaid because Woodlands could not sell her unit and wouldn’t repay her till it did. People wanting to buy into Woodlands can’t get the prices or offers they want on their own homes to enable them to settle on the retirement village unit, leaving ‘Mary’ in limbo.