One of New Zealand's biggest retirement living projects is being created on a 35ha site in the Bay of Plenty by one of New Zealand's richest private developers in a joint venture with Māori. The project is developing assets projected to be worth nearly $500 million.
Graham Wilkinson, a Queenstown-based Generus Living Group multimillionaire with hotels and three other retirement villages, says the new project between Mt Maunganui and Papamoa will be one of the country's largest retirement developments.
It will include Pacific Coast Village, where all villas are finished and occupied but construction work is continuing on larger facilities, and the adjoining new Pacific Lakes Village, now under construction.
John Collyns, executive director of the Retirement Villages Association, says the country's largest village is the 51.8ha Queenstown Country Club, although that includes commercial land, followed by the 48.6ha Speldhurst Country Club Estate at Levin.
Wilkinson says, "the completed value will be about half a billion dollars."
The project is a joint venture between Generus Living and Mangatawa Papamoa Blocks, a Māori incorporation. "We're investing land and capital in what will be two very large villages and collectively the biggest single retirement village project in New Zealand on 35ha of land," says Wilkinson.
Businesses were created to form joint ventures with Mangatawa, leasing its land for an initial 75 years, with a further 75-year right of renewal. The Coast village is at 210 Maranui St and Lakes is inland, beside that.
Wilkinson says he and Mangatawa became more confident about the project's profit prospects after the first Coast venture.
But the Maori Land Court noted in a February decision that not all went well at Coast initially. "The development of the village was extremely slow in the early years, hampered by the global financial crisis of late 2008. The uptake of enquiry and the purchase of occupation right agreements was sufficiently slow during the 2010-2014 period that there were real concerns about the ongoing viability of the village. That prompted Mangatawa to seek the partition of an adjacent site to develop a retirement village of sufficient size and scale to ensure its success."
Mangatawa initially got $300,000 each year in 2009, 2010 and 2011, but nothing in 2012, 2013 and 2014, the court said. In 2015, it got $250,000, $325,000 in 2016, $400,000 last year and $600,000 this year, "with the expectation that Mangatawa will be repaid $1,000,000 in the year ending 31 March, 2019," the court noted.
Wilkinson says it is no secret that the joint venture was initially slow, but as the local economy recovered, momentum increased and licences to occupy 100 villas were sold and settled last year.
This time, the joint venture is building a far more intensive development in the second, Lakes scheme: while Coast has 227 mostly single-level and stand-alone villas with garages, Lakes will have 350 terraced, two-level villas with garages.
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"As part of our environmental focus, we're going more intense on the second site with a smaller footprint. For every four villas, you can get six terraced homes," Wilkinson says of the change. The new development involves numerous other environmental initiatives including solar power, recycled water systems, hot composting depots, glasshouses and garden allotments, and electric vehicles and charging stations.
With more buildings comes higher profit, derived initially from initial sales but then almost constant sales turnover as residents with licences to occupy properties age and leave the independent residences due to illness, which might result in them moving to a new hospital, now under construction.
Changing personal circumstances and death are other reasons to go, but most people are discouraged from leaving their property for the rest of their lives by being provided with amenities such as the pool, as well as a punitive financial mechanism which discourages selling. Departing residents lose 30 per cent of their capital, standard in most New Zealand retirement villages.
They also get no capital gain, even if the residential property market continues to rise in the popular Bay of Plenty area. That gain is kept by Generus/Mangatawa.
"Where Generus and Mangatawa generate money is through the turnover of units in the medium to long term," Wilkinson says, estimating that some residents might be on the property for 10 to 15 years.
Lakes residents are expected to be slightly younger than Coast residents, so a tennis court is planned at Lakes, he says. Marketing of that new project started this month and earthworks are well under way.
Wilkinson hopes the first Lakes villas will be finished next year, and they are now being marketed at $660,000 to $820,000 for an average 152sq m, three-bedroom, two-bathroom home. If needed, the properties can have lifts installed by the licence owners.
The Lakes name comes from existing stormwater retention areas which are being modified to make a series of small lakes. "We're making lemonade out of lemons," Wilkinson says of the land, "by taking something not initially attractive for development and creating a lakeside residential amenity."
Other Generus villages are Ranfurly in Auckland's Mt Eden and Christchurch's Russley and Holly Lea.
Pacific Coast Village:
• Work nearing completion
• 227 stand-alone single-level villas finished
• 36 serviced apartments rising in one block
• 60-bed hospital planned
• 18ha site with indoor pool, bowling green, dining facilities
• Fees: $179/week charged for new sales
• Value of sales: around $185m
Pacific Lakes Village:
• Earthworks under way, initial development stage
• 350 two-level terraced homes
• Value of sales expected: around $250m
• 17ha site with stormwater ponds or lakes
• Lake House community centre planned
• The Pavilion 'town hall' planned
• 40-bed memory assist/dementia care unit planned