The demand for retirement villages has increased substantially in recent years. According to a mid-2015 report released by Statistics SA, those aged 60 years or more make up 8% of the total South African population. Furthermore, according to the Global Retirement Index, compiled by Natixis Global Asset Management the primary ranking concerns for these individuals are healthcare, security and material well-being. South Africa, having scored a mere 34% globally in the said index, leaves much room to be desired as the ideal country for retirement.
This has resulted in the rapid growth of retirement village developments, stemming from people acquiring a more pressing desire to secure their plans, ensuring they have well-prepared themselves and their families for superannuation.
Retire24 (Pty) Ltd was established to act as a holding company for new retirement accommodation and related real estate projects sourced and managed by C’est La Vie Property Developments and marketed by Nellie Van Staden Properties in conjunction with local estate agencies where applicable. The Musa Group’s housing division, Skyward Housing has taken up shareholding in Retire 24 alongside the founders and management and intends to continue providing new equity and debt funding to Retire 24 for future projects on a case by case basis.
This partnership fits well into Musa Group and Skyward’s vision of providing a full spectrum of real estate development services by leveraging the years of experience of C’est La Vie and their well-developed retirement accommodation model. This new partnership ultimately aims to bring the South African retirement accommodation offering in line with the successful and proven models of first world countries, while being able to offer retirees peace of mind that Retire 24 is backed by strong corporate stakeholders.
The parties entered into discussion regarding the forging of a long term funding and investment partnership, with the Retire24 team mandated to specifically develop retirement accommodation that provides long term annuity income to its investors. Focus is placed on the Life Right model (a model widely used in the United States, Australia and the United Kingdom) and rental stock portfolios. The model is however not limited to the aforementioned and, in select cases where the location of the development is triple A Grade, such as Retire 24’s newly launched exclusive development in Hermanus, sectional title and or full title properties will also be developed and sold.
The life right model provides a unique solution to retirees as retirement accommodation becomes more affordable under this method and provides security of tenure to the occupant for the remainder of their lives. The developer also permanently stays involved in the life right scheme, thus ensuring that the properties are well maintained and managed going forward. Life rights are governed by the Housing Development Scheme for Retired Persons Act no. 65 of 1988, thus providing extra legal protection to the occupants of retired persons.
Alternatively, rental stock, for a more medium term profitable solution, works in the manner that the developer rents retirement properties to the open market, typically on an annual lease basis. This model generates monthly annuity income and capital growth which is realized upon exit.
Musa Group CEO, Mr William Jimerson explains that, “above and beyond the everyday retirement village rationale, which only affords the basic amenities, new retirement village models take into account the fundamental needs of the residents. Mid-to-high income individuals place far more value on their ability to afford basic assisted living care; full frail care, catering services, cleaning services, laundry services, maintenance services etc. Increasingly, individuals approaching and within retirement age, are looking to do so comfortably, circumventing prevalent concerns of health and safety.”
Musa Group’s new partnership with Retire 24 has already made co-investments in up-market retirement village developments alongside Old Mutual Alternative Investments (A division of the Old Mutual Group) and Power Development Projects (A division of the Cape Town based Power Group) and will continue to grow this relationship with these two high-profile partners.