business case

178 Pages·2014·5.43 MB·English

BUSINESS CASE
AUGUSTA LIFESTYLE/RETIREMENT VILLAGE
MAY 2014
Rosewood Care Group
67 Cleaver Street, West PerthWestern Australia 6005
P: [phone] F: [phone]
E: [email protected]
www.rosewoodcare.org.au
Business Case AugustaLifestyle/Retirement Village May 2014
TABLE OF CONTENTS
PART 1-DEMAND STUDY
Summary Page 3
1.1 Introduction Page 6
1.2 Community Meetings Page 7
1.3 Demand Analysis Page 10
1.4 Community Survey Results Page 13
1.5 Housing Options/Competition Page 15
1.6 McCrindle Baynes National Survey Page 18
1.7 Conclusions Page 20
PART 2–DEVELOPMENT & CONCEPT
2.1Environmental Proposals Page 23
2.2Services Page 23
2.3Site Plan/ Staging Plan/ Floor Plans Page 24
2.4Commerce Page 26
2.5Program Page 28
2.6Land Tenure Page 28
2.7 Type of Village Page 29
2.8 Recommended Village Option Page 35
2.9Putting the Package to the Not for Profit Market Page 36
Appendices:
Appendix 1–Survey Questionnaire Report
Appendix 2–Environmental Proposals
Appendix 3–Service Plans
Appendix 4–Architectural Concept Plans
Appendix 5–Order of Magnitude Estimates
Appendix 6–Indicative Development Program
Appendix 7–The Deferred Land Payment Option
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BUSINESS CASE
AUGUSTA LIFESTYLE/RETIREMENT VILLAGE
PART 1 – DEMAND SUMMARY
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SUMMARY
The Shire of Augusta Margaret River has identified the potential need for a lifestyle/retirement
villagein Augusta.Afeasibilitystudy produced by the AEC Groupin March 2013confirmed that the
proposal could be feasible under the right conditions.In January 2014, theShire appointed the
Rosewood Care Grouptoprepareabusiness casefor a new lifestyle/retirement village in Augusta.
This section of the business case aims to establish the level of demand for a lifestyle/retirement
village in Augusta.Particular importance has been placed on community consultation.
Fromtalking to a wide range of people in the local Augusta community, we established that there is
demand from existing residents for alternative housing options for older people in Augusta.
However, the level of demand was difficult to quantify. The concept of a lifestyle/retirement village
appears to be accepted by the community, so long as it offers free standing, age friendly, 2-3
bedroom homes at around a $400,000 price point.
Whilst the existing 18 Leeuwin and Catholic Church units play a valuable role in the community,
there is a view that they are an older generation of seniors housing and that they are not attractive
to a large section of the current over 65’s population in Augusta.
The site identified by the Shire for the purposes of this report-close to the Community Halland
accessed off Hillview Road–was generally considered to be well located in terms of town centre and
leisure facilities. Some people would like to see a larger site (with a larger village) developed and
some people would like the site to have the capacity for expansion.
Based on ABS census data and typical market penetration for retirement villages, the theoretical
demand in Augusta (2016forecast) isestimated to besomewhere between6and9units, increasing
to between12and 16units by 2021 and to between 18and 23units by 2026. This demand forecast
is based on the localtownship ofAugusta population only and ignores people who may move
directlyto a retirement village unit from elsewherein the south west region or from further afield.
A questionnaire based demand survey was carried out in Augusta. A total of 99 responses were
received from local people aged 65 and over which we have calculatedto represent 175 local
people, or 41% of the people aged 65 and over living in Augusta. This is considered to be a very
representative portion of the local community.
A selection of the key results from the questionnaire is listed below:

89% of the peoplewho responded owned a house with a value of over $400,000,

The house features people are looking for are in line with current industry norms–e.g. a
free standing home with 2 or 3 bedrooms,

88% of people who responded consider the proposed site locationto be a good one.

Only 12 people who responded considered themselves to be “actively looking for the right
lifestyle/retirement village” at the moment, and

Only 3 people who responded said that “if they found the right development they would be
likelyto move in the next 12 months”.
Only 12 responses from people who said that they were actively looking for the right
lifestyle/retirement unit (from 41% of the over 65 population) would suggests that there may be
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current/new demand from people living inAugusta for as many as 29 units.However, it is
consideredunlikely that everyone who says they are “looking” would choose to live in a new
retirement village in Augusta (if it was built).
Only 3 responses from people who said that they were likely to move in the next 12 months (from
41% of the over 65 population) suggests that there is current/new demand from people living in
Augusta for only 7 units.This is likely to be a more accurate reflection of the real demand today.
The closest retirementvillage unit provision to the LGA of Augusta Margaret River is Busselton,
where there are two larger lifestyle retirement villages and one smaller village. Retirees seeking a
sea change/tree change lifestyle in the South West corner of WA are likely to consider Busselton
alongside Margaret River and Augusta.
There are currently 443 retirement village units in Busselton, which represents a market penetration
of 9%-considerably higher than the WA and national averages. From a positive point of view, this
market penetration suggests that retirees move to Busselton from elsewhere. From a negative point
of view, if we combine Busselton with Augusta Margaret River, the overall market penetration of
retirement village units for the region is 8.2% which suggeststhat the combined region is over
provided with units.
The2011 Census informationidentifies thatthe demographics within the Augusta Market is heavily
weighted to retirees and holiday homes. Witharound34 %of the population being over 65. It would
alsoappearthata large number of the 550 occupied dwellings are retirees whilst the 500
unoccupied dwellings would suggest a large number of holiday homes.
For the 16 year period prior to the Global Financial Crisis in 2008 the average turnover of property in
Augusta was 83 sales per annum. Since then it has dropped to an average of 31 sales per annum. As
a result of this huge decline in sales and the fact that thenormal levels of new listings become
available each year,the number of properties currently on the market is abnormally high at 171-of
which 100 are houses or units.
The Silver Vinesretirement village in Margaret River encountered price resistance when Stage 3 was
launched with prices around $400,000. The Silver Vines development is considered to be very dense
and there are no double garages–a preference for potential purchasers.
The December 2013 McCrindle Baynes national study of the retirement village industryidentified
the following information:
o For new village entrants,8% wereunder 65 years of age, 17% were aged 65 to 69, 20% were
aged 70 to 74,54% were aged 75 or olderand32% aged 80 or above.
o More than half (56%) of the village residents moved more than 10 km from their previous
home to their current village residence.37%moved more than 20 km and 22% moved more
than 50 km.
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o The top 3 reasons village residents chose their particular village (Pull factors) were because
they could stay independent (87%), safe environment and emergency support (87%), and
village facilities (87%). Closely matched was maintenance on site (86%).
o Recent village residents are mostly satisfied that their expectations have been met, with 73%
stating they were ‘extremely satisfied’ or ‘very satisfied’. This increased to 94% with
‘somewhat satisfied’. Just 2% stated they were ‘Not satisfied at all’
o Perhaps most importantly for an age group that is generally 75 years or older, 30% stated
their ‘overall happiness and life satisfaction’ had increased significantly since moving into
the village with a further29% stating it had increased slightly–a total of 59%.
o 48% of recent residents had a significant health incident prior to moving to the village, that
health incident either somewhat or strongly influenced their decision to move into the
village
o Almost all residents funded their village home by selling their previous family home (88%).
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1.1 INTRODUCTION
Thetownship of Augusta is located on the south-west coast of Western Australia, approximately 310
km’s south of Perth and 40km south of Margaret River. The township is a popular retirement
destination and has a proportionately older age profile.
The Shire of Augusta Margaret River has identified the potential need for a lifestyle/retirement
village to allow both ageing in place of existing residents andto accommodate the needs of people
in the broader region who seek to live in an attractive and iconic setting with a variety of
recreational opportunities.
The Shire previously commissioned a feasibility study for the potential lifestyle development. A
feasibility report was produced by the AEG Group in March 2013 which confirmed that the proposal
could be feasible under the right conditions.
In December 2013, the Shire sought quotations to prepare a business case to determine whether
there is sufficientmerit in progressing with the proposal and to be used to attract and inform
potential developers/operators.
In January 2014, the Rosewood Care Group was selected to prepare the business case.
This section of the business case aims to establish the level ofdemand for a lifestyle/retirement
village in Augusta.
The main focus of the work undertaken to establish potential demand was to engage directly with
the local community through discussions with individual people, community meetings and an
extensive survey questionnaire.
The outcomes from this community consultation were combined with previous demand studies (the
AEC Group) additional research, a review of the local property market and reference to national
retirement village research to produce a more accurate reflection of potential demand.
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1.2 COMMUNITY MEETINGS
Twoimportant community meetings were arranged to identify key local issues.
First Community Meeting – Key People
On 17 February 2014 a full day of meetings were scheduled at the AugustaShire offices which
included the following people:
o Michael Smart, President AMRS,
o Kym Hastie, Councillor AMRS,
o Matt Cuthbert and Nick Logan from the Shire of Augusta Margaret River,
o Merv Barrett from the Men’s Shed,
o John Williams and Wilson Garrick from Leeuwin Lodge,
o Cam Gilmourfrom the Community Development Organisation, and
o Stocker Preston Real Estate Agency.
Key issues noted during the meetings were as follows:
o In addition to the smaller site identified in the brief provided to Rosewood Care, Shire
Councillors have also considered a larger retirement village on an 8 hectare site to the west
of the sports oval.
o Discussions with Shire officers suggested that the larger site will have significant fire and
environmental issues to resolve.
o There may bea future requirement for a second sports oval which would affect the size of
site available close to the Community Centre.
o Several people commented that Augusta has, historically, been a “middle income retirement
destination” but houses may now be too expensive for the traditional market.
o It was noted that the caravan parks in Augusta are full of “grey nomads” who may be part of
the target market.
o It was suggested that a lot of local older people would not be able to afford expensive new
retirementvillage housing.
o A lot of older residents currently move away (e.g. back to Perth) because there is no suitable
retirement housing.
o A number of comments were made that the Leeuwin Units and Catholic Church units were
“past generation” and not attractive tomany people.
o There appeared to be a general view that the Silver Vines units in M/R were not what people
in Augusta wanted–too dense and too many single garages.
o It was emphasised that any development would have to be “attractive” to get people here
from outside of Augusta.
o An elaborate/expensive clubhouse is not required.
o The Community Hall is nearby and should be utilised more.
o The managers of the Leeuwin units believe that the Shire should be talking to them about
expanding this site. It was noted that additional land is available adjacent to the Leeuwin
units.
o The existing Men’s Shed site could easily be connected to the proposed retirement village.
o Houses need to be big enough to accommodate visitors.
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o Locals would prefer a form of title and are veryconscious of property investment and
inheritance.
o There was a general view that $400,000 housing product would be very marketable.
o Currently, there is no suitable (for down-sizing) “quality” houses in town in the $350K to
$500K range.
o There are a lot ofpropertiescurrentlyfor sale in Augusta.
Second Community Meeting – Survey Results Presentation
A widely advertised community meeting was held at 2pm on 27 March 2014. The main purpose of
the meeting was to present the findings from the survey questionnaire and to invite discussion and
comment from the community.
An outline plan for the proposed site (together with community links) and example house plans
were also presented.
A total of 38 residents attended the presentation/meeting.
The presentation waswell received and a number of questions and issues were raised by attendees.
Questions asked/issues raised included:
o Some attendees expressed surprise that a decision had been made to utilise a specific site
close to the Community Hall–the site bounded by Hillview Road and Allnutt Terrace. It was
explained that a final decision had not been made. However, the identified site was selected
because of its proximity to the town centre and existing services.
o One attendee expressed concern that the Shire wasprepared to “give” land to a retirement
village operator rather than use the proceeds to improve services in Augusta–which he
described as already being a retirement village. It was explained that land would only be
given to a not-for-profit provider and that the Shire could not sell the land.
o A number of attendees thought that any site selected should have the capacity for future
expansion–with additional units or an aged care facility.
o One attendee stated that increasing the number of retirement units in the town will lead to
an increase in demand for aged care services therefore the Shire needs to consider the
“whole picture”.
o A question was asked about the likely form of tenure for the proposed units. It was
explained that this had not been decided but that most not-for-profit operators used a
lease/loan structure. This form of tenure and the associated deferred fee model was
explained.
o One attendee stated that as the recycling plant was going to close, this would provide an
opportunity for additional land.
o One attendee asked if solar panels and rain water tanks would be provided. It was stated
that many locals have solar power and do not pay water rates because they collect their own
water.
o Attendees were interested in block sizes and appearedto accept the density of units shown
on the draft site plan.
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o Attendees were interested in the size and layout of the example houses presented. Our
impression was that the 2 and 3 bedroom freestanding home examples presented were the
type of house people wanted.
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