Residents buy their homes and pay ongoing fees that vary with the type of services they need or desire. The Otways paid £325,000 for their two-bedroom flat and currently pay £1,500 per quarter in service charges. When his home is resold, 10 per cent of the sales price will go to the village operator, LifeCare Residences, which is run by Gavin Aleksich, a seasoned retirement village entrepreneur who moved from New Zealand to the UK in 2005 after identifying it as a particularly promising market.
He foresees Asia undergoing seismic change in care for the elderly, particularly in China, where the one-child policy has undermined the family-based tradition, leaving typical adult couples with four parents and a child to look after. “They don't have answers yet but there are a range of providers moving in,” Aleksich says. He adds that real estate downturns like the UK's can actually boost the retirement community sector by steering developers away from traditional residential schemes, where demand is slack, toward housing where sales are need-based and cannot be deferred. Aleksich points out that New Zealand's senior care communities took off in the late 1980s during a significant property market correction.
The UK's BMB Property Investments, a developer specialising in elegant homes in the prime central London market, recently entered the retirement village sector with a development with a business model similar to that at Grove Place. Welland Quarter in Market Harborough, Leicestershire, is also operated by LifeCare Residences and BMB is planning to develop two additional villages. Director Julian Mercer feels he is offering an alternative to rent-based luxury continuing care residences that can expose residents and family members to terrific financial strain.