Money talks at the retirement living outlook
The Retirement Living Outlook focused on the buying, selling and developing of retirement villages. Guests enjoyed some frank and energised discussion relating to the pitfalls and opportunities to be had when buying or selling a retirement living asset.
Mitesh Ramji, Partner Corporate Finance, Grant Thornton said: “The interplay of the specific nuances to the retirement village industry such as the unique resident profile; demographics and contract variables of each retirement village, makes valuing them more complex.
“A portfolio of retirement villages at different stages of maturity helps even out the lumpiness of cash flows caused by the inherent nature of the DMF model particularly as residents tenure becomes more unpredictable over time.”
Speaking to the crowd Colliers International Investment Services Executive Henry Vu told delegates the retirement village industry was facing a new level of competition from property developers outside the industry who were attracted by the idea of a development profit and the promise of an annuity from retirement villages.
“Traditionally, retirement village operators have focused on the on-going running of the business and not on the development aspect which is largely reflected in the standard discounted cash flow valuation methodology,” Mr Vu said.
Masonic Care CEO ML MacDonald revealed candid insights into the buying and selling process from the perspective of a retirement living operator.
ML’s top tip: Ultimately, confidence in a purchase depends on the confidence you have in the team around you. A great team has a shared vision, compliments and strengthens each other.
Jackson MacDonald Partner, Simon Moen explored the pitfalls many operators fall into when either buying or selling an asset. Simon addressed the big questions both buyer and seller must ask themselves before instigating a transaction.
Ensuring an asset is sale-ready was one of Simon’s biggest tips and likewise ensuring you are ready to buy.
Too often a deal is delayed or lost all together because one party has failed to ensure they are sale ready.
The Property Council would like to thank the event sponsors Perrott Painting and Jackson MacDonald.