Rotorua is set to cash in on the ''booming retirement village industry'', business leaders say, as plans for another multi-million dollar development take shape.

A $20 million retirement village with 66 units is in the pipeline for a 2.2ha site fronting Te Ngae Rd.

The Lynmore Rise Retirement Village development is a joint venture between Owhatiura South Inc and Classic Builders from Tauranga - and comes hard on the heels of Regency Park Estate's announcement last month that it will spend $12m constructing 30 retirement villas.

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Owhatiura South chairman Bryce Morrison said it owned substantial parcels of land fronting Te Ngae Rd and the retirement village had been three years in the planning.

Growth in the number of retirees and the need for more facilities has prompted the project.

''The Lynmore Rise Retirement Village is a carefully considered concept and is well located with easy access to Rotorua's amenities and the CBD,'' he said.

Classic Builders co-owner Peter Cooney said it had built a number of retirement villages and the construction of Lynmore Rise would provide local employment opportunities for contractors and sub trades.

Rotorua Chamber of Commerce chief executive Allison Lawton said it was great news for the local economy.

''It brings investment which will create new jobs across a range of industries for example construction, health care, food and beverage, management and so on.''

Retirement villages were a ''booming industry'', she said.

''We only need to look at the Tauranga region to see the positive contribution this sector has made to their economy and arguably this sector has provided a solid base for ongoing economic activity, providing the confidence for other industries, outside of the retirement industry, to invest.''

Now Rotorua would get to share in the economic prosperity created by these villages, she said.

''We also get to enjoy the financial, cultural and social benefits these retirees will bring to our city.''

Rotorua Lakes Council's Economic Growth Portfolio lead and deputy mayor Dave Donaldson welcomed the multi-million dollar development and said it showed ''an increased awareness of Rotorua as a great place to retire''.

There would also be numerous benefits for the city, he said.

''Straight away it makes a contribution to the ratepayer base for council through the capital value of the property ... so it's all very positive.''

Meanwhile the upgrade of Te Ngae Rd was expected to start in the new year, he said.

''It is going to include provision for enhanced cycling access and non transport modal access to the inner city ... it's pretty much to their doorstep so it will further enhance that site as a very attractive lifestyle proposition.''

RCG Limited provided input to the development design and research for Lynmore Rise and its property director Desmond Wai said it was an ideal fit for Rotorua.

The first stage of Lynmore Rise was expected to open in the first quarter of 2019.

By the numbers

* $20m dollar proposal

* 66 retirement units

* 2.2ha site that fronts Te Ngae Rd, and bounded by Basley Rd and Owhatirua Dr

* First stage expected to open in first quarter of 2019