Last month our DCMI PD program partnered with Your Link to introduce a new topic around Digital Literacy in Retirement Communities.
Many of you will have witnessed first hand digital exclusion.
Day to day seniors around the country are needing to become digitally savvy as they cope to use QR codes, online shopping, online ordering of services and even access many government services including MyAgedCare.
As VMs, we need an ABILITY to have a digital solution strategy for communication and service delivery.
In our PD topic presented by Your Link, we cover:
The essentials of digital literacy
Why digital skills are important for residents and village teams
The fundamentals of how to coach others to learn
and, The role of a digital coach
The aim of the topic is to encourage village professionals to create digital coaches within their villages that can assist other residents that may be at risk of digital exclusion.
Not a DCMI Member – learn moreHEREor call Sally on 0417 482 312.
At the helm of every good village is a good village manager – but as operators are being forced to compete on salaries and benefits with other industries, good village managers are getting harder and harder to attract and retain.
A good village manager is vital for a village’s success, as they look after not only the physical assets of the village but the all-important DMF income.
The deferred management fee business is reliant on resident satisfaction – so there’s the assets of in some cases $20-70 million or more that they maintain, but VMs also have to maintain resident satisfaction to be able to grow and improve the DMF side.
Together, that’s a pretty important reason for having a very good village manager.
The role has changed. Today, a competent village manager is responsible for compliance, financial management, property management, mental health management, population wellness, sales, marketing and general resident well-being.
Looking forward, VMs might also be responsible for areas such as care services, food services, and retail leases, so their skill set is actually extremely broad.
It’s not something you can go to university to learn.
What managers want
Village managers are becoming more and more savvy in terms of what they want from an employer. Prospective hires nowadays would like to see:
A solid induction program – not just a week of on-the-job training
A commitment to ongoing professional development
Sound support program structures
Technological systems that support the village operations
Project support, such around COVID planning, Accreditation or asset upgrades
And more pay to go with the increased responsibility and skills.
Mirvac CEO Susan Lloyd-Hurwitz said the country’s largest diversified developer is looking to “press the button” and follow Stockland, Ingenia Communities, Lifestyle Communities, Aspen Group, Palm Lake Resort, Serenitas and Hometown Australia into land lease developments.
“It’s a very compelling investment proposition and a very good customer proposition,” Susan told The Australian Financial Review after Mirvac announced a net profit of $565 millionfor the six months ended 31 December.
“We clearly have all the skills in-house to be able to design the right product at the right price point, experience in building community, and we have the land.”
One of the pilots will probably be at Smiths Lane, a 240-hectare master planned community at Clyde North in Melbourne’s outer south-eastern suburbs.
“Over the last year, we’ve gone ‘No, why would we do that… to let’s do that ourselves’,” Susan said.
Susan said Mirvac had no intention of buying established operators, but would look to build up its portfolio of assets, as it has done in office, industrial and build-to-rent.
“We have all the ingredients that we need – there are things we have to learn, probably, but I think we have most of the ingredients.”
Perhaps one of the key ingredients Mirvac may need will be skilled professionals that have the experience and aptitude to be able to hit the ground running when it comes to community management.
Mirvac was recognised as a HRD Employer of Choice for 2020. This accolade was received due to their ongoing commitment to gender equality, a mentoring program that focuses on career development and their purpose and values which are deeply embedded in the way their teams function.
33 minutes after announcing it was leaving retirement villages Stockland announced it was creating a new partnership with the huge Japanese real estate investment fund Mitsubishi Estate, to build a lot more land lease communities.
Together they intend to have $4 billion in development and sales over the next five years.
Stockland already had 10 land lease communities being built, plus last year they bought Halcyon’s land lease communities for $620 million.
Land lease communities are charging ahead. Home builder Mirvac also decided this month to move into the sector in a big way. See our story below.
Land lease homes sell to 55 to 70-year-old’s, while retirement village operators sell to 75+. They are a different market. LLCs also do not have any care in their offer – for now.
As long-time LLC operator Palm Lake Resort has had to do in its older locations, it has opened Aged Care homes next door.
Tarun Gupta, Stockland CEO (pictured), announced that its entire Retirement Living business, that’s 58 villages and 10 development projects underway, has been sold to Swedish investment firm EQT Infrastructure (EQT) for $987 million.
All 300 Stockland staff will transfer to EQT.
Not enough profit; want care
Stockland has had its village business for sale for seven years.
Mr Gupta has given two reasons for the sale – the village business was only making 3% cash profit, and the continued growth of village customers wanting care to be delivered.
He is quoted in the Financial Review newspaper: “They’re living longer, and average age in our retirement villages today is around 82 years,”he says.
“So, they need much more care. The sector’s moving into more what you would call healthcare with co-location of aged care capabilities.”
Year upon year Stockland has stated it was building the profit rate (Return on Investment) with a goal of 8%. They reached 6% in 2017 but then the famous Four Corners program went to air titled “Bleed Them Dry Until They Die”, referring to the DMF, and sales crashed – for three years – and Stockland sunk back to 3%.
The same occurred at Lendlease where Tarun Gupta was then a senior executive. He led the sale of 50% of Lendlease Retirement to investment funds there as well.
Good news for VMs
The Stockland sale is likely good news for village management and residents because the new owner understands the lower return and is seriously wealthy, with funds available to reinvest in villages to make them attractive to tomorrow’s customers.
And they understand that increased health support needs to be made available in villages, and has the time and patience to invest in providing it.
For village staff this means more upskilling and respect by management. The managers on the ground are the new owners’ biggest asset, protecting their $987 million investment.
Retirement village operators in NSW are facing their biggest administrative burden – the introduction of Asset Management Plans (AMP).
The AMP is a 10-year plan which sets out how major items of capital are going to be maintained and repaired – and whether the operator or residents will foot the bill.
NSW: all items over $1,000 recorded while other states $10,000
That still means operators must have their plans ready to be inspected by residents by 1 July – just over two months away.
The AMP must detail the items of capital priced at $1,000 and above for which the operator is responsible – and the list is long.
Items of capital include any building or structure in a retirement village; any plant, equipment or machinery used in the operation of a village, any part of the infrastructure of a village, plus fittings, fixtures, furnishings and non-fixed items.
Shared items of capital, for example, a minibus shared with the co-located aged care home, must also be recorded.
Some items are excluded, such as equipment that is a consumable used in the operation of an item of capital or in the day-to-day operation of the village – but the majority of major purchases would qualify.
The operator must record the age of the item, its prospective life and the amount of money paid under the village contract – and keep the plan up-to-date.
Most states work on $10,000 threshold
Paul Burkett is the CEO and Director of Baldwin Care Group, which has eight retirement villages across NSW, QLD, Victoria and Tasmania – he is also the NSW President of the Retirement Living Council (RLC).
Speaking solely as an operator, Paul says the challenge with the AMPs is the $1,000 threshold.
Most states work on a $10,000 threshold, he says.
“No other state brings it to that low value. When you are going down to such minute detail with every item, you could have 15,000-to-17,000-line items for a village.”
While he says the Government’s position is understandable, given the level of concern by residents around responsibilities of repairs and maintenance, Paul believe the requirements around the regulations require more fine-tuning.
NSW facts to understand: items left out can’t be funded from capital works
Critically, the first plan must be presented to the residents at least 60 days before its start date so they can inspect it and provide feedback which must be recorded by the operator – including any changes to the plan in response to this feedback.
This means operators must be working on plans now in order to have them ready in the necessary timeframe.
The plan must also include an asset register of the village’s major items of capital, including information about the effective life of items of capital, and a maintenance schedule of the village’s major items of capital, including estimated cost and maintenance dates and information about capital replacement.
Importantly, if a major item of capital is not in the register, the item’s maintenance can’t be funded from the capital works funds or recurrent charges – leaving operators to pay the bill.
The register will only apply to items purchased or constructed before 1 February 2021 – but will prove to be an exercise in paperwork moving forward as new major items of capital have to be added to within seven days of their purchase.
July 2022 is now set down as the start date of penalties for operators that fail to meet their AMP requirements.
Three-year budget delivered annually
Operators must also prepare a three-year report for capital maintenance extracted from the AMP to help inform expenditure for major items in the village’s annual budget.
If this three-year budget differs from the information in the asset management plan, operators must revise the plan within 28 days of the budget being approved.
And if the total cost for capital maintenance for all of the major items listed at the start of an asset management plan is likely to increase by 25% or more (net of CPI) by the end of the 10-year period, the operator must revise their capital cost estimates.
These must then be made available to residents who will have the option to comment on the changes – effectively giving residents the opportunity to ‘sign off’ on any large budget increases.
Residents unlikely to fund plans
Rohan Harris, principal of law firm Russell Kennedy, tells us that the cost of preparing the asset management plan could be included in the village’s budget, if the residents agree.
“This is well and good in theory, but doubtful in practice because it requires the residents’ approval. Residents would need to see the benefit and be happy share the additional cost of the plan, which is essentially the operator’s responsibility.”
He also believes the impact will differ between operators.
“Well-organised operators with existing capital asset management programs in place will deal with the new requirements, and may have capacity to absorb or pass on any additional costs. Operators who have failed to meet base level capital maintenance standards that already exist will be found wanting.”
Long history of resident disputes
You have to ask the question though: did the sector bring this on itself?
The Greiner Inquiry highlighted a number of disputes between residents and operators over maintenance and repair costs in the village.
The word we hear from village residents’ associations is that operators are reluctant to commit the cash to replace expensive items – preferring instead to repair items and forcing the cost into the residents’ budget.
For example, typically a new bus would need to be purchased every seven years.
But by continually repairing the bus with new parts – long past its normal use-by date – residents pick up the bill.
Quantity surveyor to be required
Villages will now require a quantity surveyor or similar person to sign off on the plan before it can be given the stamp of approval.
“In addition, where a village has commenced its notice period on a proposed 2021/22 FY budget before the commencement of the proposed amending regulation, the operator will not be required to have its asset management plan reviewed by a qualified person for that budget cycle.”
Rohan says: “Features like the $1,000 planning threshold begs the question – would the time and effort on documenting and budgeting to that level of detail be better spent on the assets themselves?
“But overall, the asset management plan requirements are there to hold operators to greater account for what they are already required to do – that is to maintain capital items in reasonable condition, having regard to their age and money paid by the residents to the operator.”
“Operators that aren’t able to deal with this and other reforms will find doing business more and more challenging.”
All village operators beware – and prepared, including in other states.
This week DCMI participants enjoyed Masterclass 5 in Solution Selling with our great colleague an industry expert Jacqui Perkins.
During the session Jacqui touched on the importance of asking the right questions, listening and presenting the most appropriate feature and benefit tailored for the client.
Some of the key takeaways from participants included:
The importance of building creditability through asking the right questions, rather than the information shared!
80% of the interaction should be questioning & 20% sharing the information
First 4 Masterclass sessions now available
Jacqui’s Solution Selling masterclasses are an 8-session series, to date Jacqui has covered the following
Developing your brand & Sales Funnel
Purposeful Networking
Understanding your customer types & communication types
Diagnosing before prescribing the solution
Selling solutions
With all of these sessions are available in the DCMI Knowledge Centre portal for participants of the DCMI Village Management Professional Development program to refer back to, a great resource!
Last week I read a great alert from our Industry Partners Russell Kennedy that provided a timely reminder about screening of movies within Retirement Communities, particularly during these COVID times when residents are often more likely to stay within the village.
In my experience there is often some confusion about whether operators are required to have a license when screening movies in community centres.
Most of us will have seen the notices at the start of DVDs or streaming services warning that the film is provided for in-home use only. At the time of purchase you are often also purchasing the right to view the movie in your own home.
However, what if you wish to screen the film in the community centre. That is when things get a little complicated.
Our colleagues Rohan Harris (pictured) and Gina Tresidder at Russell Kennedy share the following.
There are no blanket exceptions or specific ‘fair dealing’ provisions that apply to the screening of films in aged care homes or retirement villages1 or for not-for-profits. So the question becomes whether it is a ‘private’ or ‘public’ screening.
What’s the difference between a ‘Private’ and ‘Public’ screening?
There are no specific guidelines set out in the legislation.
Generally, if a resident is watching a film in the same way a person might do in a private home then it is likely to be considered a private screening. For example: If a resident of a retirement village hires a DVD or signs up to a streaming service and watches a film alone in their room or invites a few friends over to watch.
This would generally be regarded as a private screening that would not require permission.
However, if the provider or the operator organises to screen a film for multiple residents in a common area such as a recreation room, for example, this is more likely to be considered a public screening requiring permission from the copyright owners. For example: If a retirement village committee plays a DVD in the community centre and residents from the village gather there to watch it, even if there are no guests from outside the village;
This is more likely to be considered a public screening requiring a licence.
Where can I get a licence?
Rather than approaching the individual owners of copyright in the particular films you wish to screen, to streamline matters, the various studios have granted rights to different organisations to manage licensing on their behalf.
In particular, we understand that Roadshow Public Performance Licensing (RPPL) (www.roadshowppl.com.au) manages licenses for studios such as Roadshow, Warner Bros, Universal, Paramount, and 20th Century Fox. RPPL has recently authorised a specialist distributor, Heritage Films International Pty Ltd, to issue the Big Studio Movie Licence (www.bsml.com.au) to retirement communities and aged care facilities.
What if I do not get a licence?
If you do not get a licence, then you may be infringing the copyright in the films you screen. The copyright owner or authorised licensee could take legal action against you any time up to six years after the infringement occurred. The copyright owner could seek orders from the courts including that the infringer pay damages or a portion of profits. In some circumstances, directors can also be found personally liable.
If you need some further clarification or guidance on this matter please reach out to Rohan or Gina at Russell Kennedy’s IP team.
DCM established villages.com.au in 2006 and it has grown steadily through GFCs, negative media coverage and now a changing consumer, thanks to the first Baby Boomers now passing age 75.
In 2021 traffic grew a BIG 11% Year on Year with over 1.3 million visits. Remember, the only reason people visit villages.com.au are people who have had an event in their lives (or their parents) and they are looking at future accommodation options.
But last month saw another significant jump, significantly in the number of people reaching out to operators, seeking more information.
All up, 17,400 people took the next step with a website click, phone call or an email, which was the choice of 1,200 people.
To place this in perspective, just 23,000 village homes become available to sell. That is 1,963 homes a month.
With 17,400 people putting up their hand as interested, demand does exceed supply.
Want to know more about villages.com.au, email us HERE.
