'Vertical villages' the next frontier for aged care
SENIORS' living and aged care is tipped to become an increasingly hot sector for commercial property in South East Queensland, with industry commentators predicting a boom in vertical 'apartment-style' aged care villages integrated with allied care.
The news follows confirmation that over 50s living provider Palm Lake Group is set to develop its second retirement village on the Sunshine Coast, after receiving council approval for its new Palm Lake Resort at Little Mountain.
The group has been granted approval to build 276 villas and a 120-bed aged care facility on a 20ha site at 313 Caloundra Rd, Little Mountain. The group paid $15 million for the site in 2015.
The Palm Lake Group is also currently developing its Palm Lake Resort Cooroy-Noosa over 50s living project at Trading Post Road, Cooroy, which is a short drive inland from Noosa.
Meanwhile, in a separate deal, a 7175sqm development site in the nearby Novus Innovation Park, at Sippy Downs, was also recently sold to an aged care provider for $3.086million, with plans under way to build an aged care facility on the site.
Colliers International predicts the aged care sector will see a rapid adjustment in coming years, with a convergence between the traditional care silos of residential aged care, home care, retirement villages and hospitals.
Shalain Singh, head of healthcare and retirement living at Colliers International, said there would be an increasing blurring of the line between aged care and retirement living, providing village operators the ability to lengthen residents' stay, resulting in an expansion of their revenue stream.
"As a result of the convergence of various healthcare profiles, coupled with the increasing number of people using retirement village environments, superfunds and offshore investors by way of pension or private equity funds are expressing strong interest within the sector - the return profiles are good and getting better.
"Consolidation has been a key driver of activity from companies such as Stockland, Lendlease and Aveo who have in recent times undertaken a combined total of $625 million of retirement acquisitions."
The Property Council of Australia has reported that by 2025, the demand for retirement living for people aged over 65 is expected to double.
In a bid to ensure supply meets demand, Brisbane City Council's Lord Mayor Graham Quirk recently announced a package of incentives to encourage an increase in the city's retirement village and aged care development.
The incentives include a reduction in development infrastructure charges by 33% over a three-year period, additional two-storey allowances in medium and high density locations if best practice design requirements are met, and amendments to the city planning framework , the Brisbane City Plan 2014, that will see a streamlined new code introduced for assessing aged care and retirement living development.
It is expected that the incentives will change the way seniors living and aged care providers and developers operate, as it should allow developers and aged care providers to build more on each site, effectively raising yield and increasing viability.