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Category: Latest industry developments

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Key things to help you everyday Latest industry developments Reporting Results

Code of Conduct and training of Village Managers in your Village budgets

If your village operator is a member of LASA (Leading Age Services Australia), the Retirement Living Council or the Property Council, you will be looking to implement the new retirement village Code of Conduct between now and December.

The Code of Conduct is a 30-page document that outlines how each village intends to conduct itself with residents. If you would like a copy, click HERE.

The Code is voluntary but there is a big push coming for every operator to take it up. Ask your boss!

Village management has until December to implement the Code. From January the requirements must be operating and each village accountable.

‘Severe’ breaches of the Code will result in the village being ‘sanctioned’ – named and shamed on the industry website.

From the picture at the top, you can see that ‘training’ has to be seen to be provided to you, and for it to be real and relevant training.

Have you got training in your 2020 budget? Have you discussed with your operator who will pay for training? How much should you allocate?

A tip. A KPMG focus group of operators all said the operator should pay and nominated $2,500-$3,000 for two days training, as a start.

This is an investment in your village, the success of the Code of Conduct, and of course yourself.

Our VILLAGE SUMMIT has been built around the Code of Conduct and the new accreditation system. (More about accreditation next newsletter).

Learn more about the VILLAGE SUMMIT HERE.

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Latest industry developments Things to watch

Good news: experienced and new village operators committing to the future of retirement villages

As a Retirement Village Manager, you will be thinking about your career prospects going forward.

The good news, despite the media and reactive governments, is that experienced and new village operators are committing really big funds to acquire and build new villages.

A couple of examples to demonstrate this really positive trend:

  • Glen Brown, a 50-ish veteran village operator based in Brisbane who helped build RetireAustralia from scratch, has bet his future on his new village group called Reside. He has got the capital together to build 1,500 retirement village homes over the next six to eight years – that’s worth $600 million. (Glen and his team pictured).
  • Paul Browne, a 60-ish veteran village operator who built and sold Freedom to Aveo, has created LDK Healthcare and is building 400 village homes in Canberra and just bought The Landings in Sydney (around 230 homes) for about $60 million.
  • Phil Usher, a 55-ish veteran village operator who created Tall Trees Villages, is having another go, just announcing his Odyssey Village group. The first development will be $50 million.
  • Steller Developments in Melbourne, a big residential developer, has just committed $430 million to build four villages in one go on the Mornington Peninsula, their first ever.

And there are quite a few other private people putting real money up.

At the same time not-for-profit village operators are expanding aggressively.

The message: retirement villages are growing, which means the demand for experienced, professional retirement village managers is growing too. Good news.

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Latest industry developments Reporting Results

April/May/June peak tyre kicking months – get ready

The best time to go fishing is when the fish are jumping – and the retirement village buyers should be jumping for the next three months. But are they buyers?

Check out the graph above. This is the sales action for Aveo across about 80 villages for the last two years.

The tall mid blue column is the average weekly appointments potential customers make to visit a village for the three months of that quarter.

The light blue column is the average weekly seen appointments – the number of people who actually turn up.

The dark blue column is the average number of sales made.

We have circled in red the Fourth Quarter – April/May/June. You can see they get more potential customers ‘walking down the drive’.

However the actual sales rates don’t vary that much throughout the year.

For Aveo it averages 19 sales a month, every quarter.

This makes sense because things happen in people’s lives every month, causing them to consider downsizing from the family home to a safer, more supportive community.

The moral: treat every month as a peak selling month.

What should be the sales ratio to enquiry?

The Aveo figures are interesting. They currently get approximately 180 people each week making an appointment to visit a village. 120 people actually show up – that 66%. From those 120 people around 19 actually buy; that is 16% or just under one in every six that walks down the drive.

Compared to normal residential sales that is a really good ratio. Imagine a real estate agent who knew he only had to show six people a home to get a sale.

On the other hand, there are village marketers that average one in three inspections generates a sale. Maybe their villages present better.

In our opinion the key selling feature is you, the village manager. It makes sense that if you are positive and confident about the product you represent customers will be reassured they are making a good decision – especially as you will be staying with them in their journey, unlike most salespeople.

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Key things to help you everyday Latest industry developments Reporting Results

NSW government to limit weekly fees for departing residents – max.42 days

Do your village contracts require you to charge a departing resident or their family or their estate ongoing weekly fees until their village home has been reoccupied? Most do.

But if you are in New South Wales the limit is about to be fixed at six weeks (42 days).

This means that after six weeks the operator is likely to have to pay the fees for the vacancy unit into the village budget.

This is really going to hurt a lot of operators, especially with slow sales and building vacant stock.

The average village home now takes over 300 days from when it becomes vacant to being reoccupied. That is 43 weeks, meaning in NSW the operator will be paying 36 weeks worth of village fees. At $100 a week that is $3600, or $36,000 for a 100 unit village that has a 10% turnover a year.

Is this new government ruling fair? On paper, no. If a normal lease tenant departs before the lease is complete they are responsible for the fees until the property is relet. However there is an argument that operators both take their time to relet and because they control the sale process the departing resident has no chance to intervene.

Irrespective, it is likely other states will follow the New South Wales government.

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Key things to help you everyday Latest industry developments Things to watch

Is your village listed on villages.com.au? Act now and save $200

Do you have a pay promotion listing on our retirement village directory website villages.com.au, the N0.1 digital search and education directory?

If not, perhaps you should. Did you know that:

  • 870,000 people searched for a retirement village on villages.com.au in the past 12 months
  • Google ranks villages.com.au No.1 in most searches
  • villages.com.au educate visitors on retirement villages and contract with videos and expert education

The investment is $800 for 12 months for a full promotion listing, but rises to $1000 in July.

Why not search your suburb or town HERE, to check us out.

Need help with photos and words – we can do that for you.

Email us HERE or call Nathan on 02 9555, 9576.

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Key things to help you everyday Latest industry developments What the research tells us

Retirement villages are a really important member of the local community – invest in it

Many of us don’t think about how much a retirement villages contribute in the local community and how many people we touch.

100 residents each have two local friends and let’s say two local children – that’s 400 people and 400 families.

100 residents have doctors, dentists, hairdressers, pharmacists, clubs and shopping centres they buy from.

With 100 residents, you have a business that may be valued at $10M+ that spends money every week on maintenance and operations.

The village is important and you as the village manager are important to all these people.

And they are important to you.

To maximise the enjoyment of your role and the value of your village, for your residents and operator, our advice is to get out in the local community.

Here are some suggestions:

  1. Join a local community club or business council – it can be refreshing to network with other local business managers
  2. Ask your residents if they have any special local relationships that you can promote e.g. membership of local clubs, children who run local businesses
  3. Check the council website or visit their office to get the calendar of local events over the next 12 months to see what you can participate in
  4. Understand and promote what transport options are available to residents
  5. Promote local events in the village (special business sales, community events)
  6. Identify local businesses that can benefit both the residents & business owners and suggest some special deals e.g. the local butcher offers of a village special once a week or businesses that can deliver, offer seniors discount, or are willing to do a talk/host event for residents are a great start
  7. Inviting local community groups into the village for an agreed function/activity or be a guest speaker

I like to think as Village Mangers we are striving to be great Community leaders in every way.

It’s the last day of January so why not start the year on a fresh note.

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Latest industry developments

High-rise villages gather momentum

Something for you to think about. Over the Christmas period a couple of new retirement village developments were announced, and they are big high-rise buildings.

How would you like to be managing a 21-storey retirement village with 142 apartments (pictured) Ozcare, a QLD not-for-profit operator, is going to build one 500 metres from Aveo’s 19-storey Newstead village.

Also, over Christmas, another QLD not-for-profit operator, Bolton Clarke (the old RSL Care) announced a 25-storey retirement village which will have 182 apartments.

In December the construction of a retirement village called U City topped out in Adelaide at 20 storeys. It is being built by another not-for-profit, Uniting Communities.

These are big and expensive projects; their cost ranges from $100 million to $200 million to build. They will take village management to a whole new level – which is exciting as it expands career opportunities.

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Latest industry developments Things to watch

Interesting bit of information – Ingenia testing ‘flat pack’ homes made in China

We will report on this in more detail over the next few months but thought this might tickle your fancy – it sparked our imagination.

Land lease community and rental village operator Ingenia, with over 50 locations, is trialling the manufacture of complete homes in China and shipping them here to Australia.

We hear they have already built one and have ordered and a further nine.

Why are they doing this? Their CEO Simon Owen comes from the retirement village sector and he tells us its origins were affordable housing for Australia’s ageing population. He wants to continue that service.

The potential cost of a two-bedroom home – less than $200,000.

This is not new. Check out these hotels

For hotel rooms we have been told that the room arrives complete with the linen on the bed and the towels in the bathroom!

Your next village may be made in China!

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Latest industry developments

VIC Liberals and now NSW Labor promise a retirement village ombudsman if elected

The role of an ombudsman is to be the policeman (or woman) of the retirement village sector.

In Victoria, Labor is in power and resisting the appointment of an ombudsman. They have an election in one month’s time, 24 November. The Liberals say they will appoint an ombudsman if they win.

NSW goes to the polls on 23 March next year. The Liberals are in power and last week the Labor Opposition Leader Luke Foley promised to appoint a retirement village ombudsman if elected.

At the moment Liberals are planning to announce a position they call an ‘ambassador’ in the next week. It is uncertain what this role is but it will have less power than an ombudsman.

Labor leader Luke Foley said the ombudsman would consider disputes related to the Australian Consumer Law, Retirement Villages Act 1999, Residential (Land Lease) Communities Act 2013, and associated regulations, and report systemic problems in the sector to Parliament.

What this all demonstrates is that if you are in government you don’t want more regulation to administer. If you are not in government you will say anything to win the day.

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Latest industry developments

Dementia – expect a lot more discussion about how well retirement villages can support residents

This is our prediction.

Out of the Royal commission will come a discussion about how well people with early and advancing dementia can be cared for in their home, with home care, and in retirement villages.

As a village manager you will be well aware of the challenges – identifying your residents early, supporting them and then judgements on the most suitable accommodation for them in the longer term.

With retirement villages increasingly being marketed as supportive of residents with increasing frailty, and coordinating home care, there will be discussion in the Royal Commission on skill sets and training of village staff.

A major focus of the Four Corners program was that a Certificate 3 AIN only receives four hours dementia tuition in their training course.

Our prediction is that village staff in the not too distant future will require training as well.

Four Corners is right. The standard course module for dementia is grossly inadequate. You can check it out HERE.

Interestingly, part of the course is to implement strategies for yourself to manage the stress of caring for people with dementia. A valid point.

We believe all village staff should receive dementia training – to be supportive of residents, to support you and to protect operators and the business.

Here is a link to Dementia Training Australia is one example.

It is a three-day course.

This is our prediction. What do you think?