Paul Morgan, co-founder and chief executive of luxury integrated retirement community operator, Wallacea Living, shares his findings from a recent ARCO study tour in New Zealand

Designed to gather insights and best practice into the retirement industry globally, the recent Associated Retirement Community Operators (ARCO) study tour included representatives from Richmond Villages, The Audley Group, Retirement Villages Group, Riverstone, Untold Living, as well as Wallacea Living.

Market size

New Zealand is regarded as a world leader when it comes to retirement living, with companies starting to develop retirement villages in the 1980s, a good 20 years or so before similar models were introduced in the UK.

Around 16% of older people are living in a retirement community in New Zealand (compared to 0.1% in the UK) with 130 people moving into a retirement village every week. ARCO’s vision 2023 for the UK highlights a target of 250,000 integrated retirement community (IRC) units to be available to our population by 2030. This is a bold challenge from the current 88,000 and will take us to around 2% of the older population.

Planning

The planning authorities in New Zealand have similar challenges to the UK in that any application is measured by bulk, location, design, traffic, noise and environmental effects to name but a few. However, as retirement villages in New Zealand are regulated through the Retirement Village Act 2003, it is slightly easier for planning authorities to understand what a standard definition of a retirement village is. New Zealand has 465 retirement villages across 67 planning authorities compared to around 75 IRCs in the UK across 337 planning authorities in England.

Wellbeing

It’s fair to say resident wellbeing is at the heart of everything offered in New Zealand’s retirement communities. From the ‘new resident coffee mornings’ on arrival, through the very full list of physical exercises – Pilates, chairobics, aqua classes etc – through to the guest talks, resident talks and so much more. One area that was very clearly an enjoyment for many residents was their involvement in some elements of ‘running’ the communities.

We saw examples of a bar that was 100% resident operated and managed, to times when residents help at the reception desk, run classes and drive the minibus into town, as well as managing gardening clubs. There was a real sense of purpose around the community.

Technology

It’s fair to say that technology in New Zealand is being tried and tested in the same way it is in the UK. When it comes to genuine examples of tele care options and communication within the community, there are examples of resident apps and two-way communication opportunities within the apartments very similar to the UK. There wasn’t a “this is the best system”, it was horses for courses.

A couple of the higher end communities were implementing keyless systems whereby people’s wrist bands can provide door entry and service charging to their accounts. The one element that the UK and New Zealand are working towards is having such a system that is safe and reliable enough to house an emergency response system.

Community engagement

Some of the activities that are much more achievable due to the number of villages in the country, is having overnight stays or tours to other areas of the country and staying in sister villages to experience what those areas have to offer. I know one or two companies in the UK undertake this, however it did seem to be more of a regular and almost expected service in New Zealand.

Care and support

Around two-thirds (65%) of the retirement communities in New Zealand have a physical care facility on site. If and when someone reaches a stage in life when they need further care, the Occupation Right Agreement (ORA) is settled, and a new one set up in the care facility. The fact there is a care facility on site and that a resident can transition through, is highlighted as the fourth most important consideration when buying into a tirement community – behind safety and security, sense of community and location. Interestingly, as the retirement sector grows in New Zealand with care facilities on site, standalone care homes are in decline, indicating a shift in the country’s choice for where they wish to be as they get older.

Finance

On moving in, a resident purchases an ORA (essentially a licence to occupy). This sum of money is not a purchase of ‘ownership’, it is a capital contribution which allows you to ‘buy’ into the village and use the services. This capital contribution is guaranteed to be returned at the end of the tenure, minus the Deferred Management Fee (DMF). Once a contract is signed, a resident has a statutory 15-day cooling off period (some operators extend this to three months after moving in). The owner pays a monthly fee to live there. Interestingly the fees are quoted and discussed in weekly terms as opposed to monthly. These fees are set very low to offset a more rapid DMF growth. DMF accrues typically at 10% per year, however, there are variations, although the majority accrue over three years.

Upon resale (which the operator is responsible for) the owner (or owners’ estate) receives original capital sum less DMF. Any capital gain or loss is absorbed by the operator. A new weekly fee is then set for new owner. The operator charges no resale fee and funds all refurbishment required in the apartment.