Retirement village industry investment – stable capital, steady income

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Despite a decade of significant growth, New Zealand’s thriving retirement sector is still working at full stretch to keep pace with demand from an ageing population. This is among the key take-outs from JLL NZ’s 10th annual Retirement Villages and Aged Care Report, as reported by Voxy Tuesday 19th of July 2022.

In the 10 years that JLL NZ has been tracking the sector’s performance through its New Zealand Retirement Village and Aged Care Database, the number of retirement units in New Zealand has increased by 71 per cent, with 37,489 units now spread across 425 villages nationwide, accommodating an estimated 48,736 residents.

But with drivers for demand set to become even stronger, JLL NZ’s Head of Research, Gavin Read, says the pressure is on for providers to deliver their development pipeline – and then some.

John Jackson is the Executive Director of Senior Trust Retirement Village Income Generator and has been involved in investment in the sector for 22 years. He believes the current surge in demand reflects the concerns of many senior New Zealanders about social isolation, security, and a desire for a good quality of life in their golden years.

The senior living sector is orderly and well-regulated, with a proven investment track record. Where the operators we invest in are registered retirement villages, they are also required to adhere to the Retirement Village Act 2003. The regulatory framework is a contributing factor to the stability of the sector and the capacity of retirement villages to generate long term steady income, derived from solid, real property assets.

Unlike other industries, senior living growth has been sustained despite the current disruptions such as Covid and share market downturns. The slowing residential market will impact on the take up of new retirement village dwellings as most incoming residents have to sell the family home prior to arrival. However, the prime motivators for a shift to a retirement village remain as strong as ever. Further, the rising cost of living which heavily impacts seniors managing on fixed incomes, is becoming an increasingly compelling factor in the trend amongst seniors to downsize and release equity out of their residential asset.

Another significant trend is a growing demand in the regions and well-located urban areas, for independent villages with a less corporate, more intimate and innovative experience in stunning locations. Senior Trust focuses on this segment of the retirement industry, supporting and funding experienced, capable operators, who deliver high quality villages at the premium end of the market.

This focus has enabled Senior Trust to maintain its long history of attractive returns. We monitor the investment markets constantly to ensure we remain competitive. In the last three months we have increased our distribution rate twice. Effective 1 September 2022, Senior Trust investors will enjoy an income return pre-tax of 7.00% per annum.

Senior Trust Income Generator – specialist funding of premium retirement assets that deliver attractive, solid returns – while helping create quality places to live. Building wealth and wellbeing, to help Kiwis live more comfortable lives.

Senior Trust Retirement Village Income Generator Limited is the issuer of the products. The Product Disclosure Statement for the offer is available and can be obtained on our website at www.seniortrust.co.nz

 

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