An artist's impression of how the new scheme could look. Photo / Generus Living Group
An artist's impression of how the new scheme could look. Photo / Generus Living Group
New retirement village licence-to-occupy price records have been set on apartments where unit occupation rights have sold for just under $4 million each.
The Auckland 'village' is modelled on London's upmarket Chelsea Barracks on the site of a historic former military base in Belgravia, one of the world's wealthiest districts.Places there go for millions of pounds each.
Graham Wilkinson, owner and founder of privately-owned Generus Living Group, said licences on a number of new upper-level apartments at The Foundation Parnell were the highest in New Zealand.
"Several apartments licences sold for between $3m and $4m," Wilkinson said.
The $300m-$400m development is a partnership between his Generus and Blind Low Vision NZ, previously called the Blind Foundation, which owns historic buildings on the site with some surplus land.
It is that land and where structures are being removed that Wilkinson's business is developing, as well as striking a deal to lease the red brick historic-listed Pearson House opposite Auckland War Memorial Museum.
Wilkinson said deposits had been taken on 80 per cent of yet-to-be-built apartments in the first of three blocks planned for the site at the Maunsell Rd intersection.
Pearson House will be incorporated into the new village. Photo / Supplied
Generus takes a 30 per cent deferred management fee so $3m-$4m buyers will forgo around $1m on each licence purchase under that arrangement.
Ryman takes a 20 per cent deferred management fee but the higher 30 per cent is charged by most other retirement village operators.
Retirement village properties are not sold by most owner/operators. Only licences to occupy are sold, so buyers don't get a property title but a contract to live in the place as long as the terms of their contract are not breached.
Wilkinson said the average pricing of apartment licenses in the first building was $2m.
"The total value development is between $300m and $400m," he said.
Headquarters in Parnell on the site which is being developed. Photo / Brett Phibbs
Kalmar Construction is building the project, now working on the basement of the first building, due to be finished by 2023.
Peddlethorp designed the buildings with Stewart Harris doing interior designer. Its design was modelled on a British village
"These will be extremely high-end design, technology and finishing," Wilkinson said.
Italian stone facade material worth about $2m for the first building was on the sea to ensure no supply holdups.
"Recently, the partnership reached an agreement on securing Pearson House to supplement village facilities. That will have a café fronting on to the Auckland Domain, upstairs billiards room, bridge room, library, etc. Pearson House is category 1 Heritage and will be seismically strengthened and renovated in keeping within heritage guidelines but be re-purposed," Wilkinson said.
Generus has also restored the heritage building Ranfurly House at Mt Eden, making it a community centre with a library, meeting areas, dining and movie theatre for the Ranfurly Village at 539 Mt Albert Rd.
In both cases, Wilkinson tapped charities - war veterans at Ranfurly and Blind and Low-vision in Parnell. He has also joined with iwi at Pacific Coast Village, Mt Maunganui.
Graham Wilkinson of Generus Living Group. Photo / Brett Phibbs
Leases of more than a century are struck so the charities or iwi don't sell the land but lease it, leaning on Wilkinson for his development expertise to derive annual incomes rising as places are completed, sold, then re-sold for potentially rising prices.
Wilkinson said construction of building two in Parnell would start in early 2023.
Building three was planned behind Pearson House and would have a gym, pool, wellness spa, restaurant, private bar and 40 aged care beds.
Some consultants questioned why people would pay just under $4m only to lose $1m or so when they die.
But the Epsom/Remuera/Newmarket catchment has some of New Zealand's most valuable residential properties. Higher prices could be charged and better apartments built than elsewhere, others said.
Oceania Healthcare sold places in its The Sands at Browns Bay for an average $1m each. Nine places there reportedly sold for $1.7m each.
Nigel Matthews of consultancy Aged Advisor said that historically, occupation rights agreement prices were 70 per cent to 80 per cent of the going rate for other residential properties in a suburban area.
"Whether it's a $400,000 or $4m apartment, it's pretty relative. People still need to be really clear on the deferred management fee model and what's in that occupational rights agreement," Matthews said.
An artist's impression of how the new scheme could look. Photo / Generus Living Group
Some of the questions people could ask, Matthews said, included:
• Do I get a share in the capital gains, and if not, am I okay with that?
• If the housing market drops, does my ORA contain a capital loss clause?
• Can I financially wait for my money if, for whatever reason, I need to move out, especially if I have no say over the sale price or sales/advertising process?
• If my spouse is under the minimum age, will they still be able to stay there if my circumstances suddenly change?
• Is there ongoing/future construction planned that will impact my lifestyle?
• Can I get another pet if mine dies after I move in?
