The emerging trend within the residential industry is the progression of developers into the retirement development space. For investors, retirement estates are becoming an exceptionally lucrative prospect, especially as they can plan ahead, experience great capital appreciation and rental returns, and also be assured the holistic benefit of a retirement estate when it is required in their future. Collins Residential, one of South Africa’s largest private developers who boast a broad property portfolio, have identified this trend and have developed a great solution for the retirement market.
A portion of the South African population, around 13.2%, is made up of the ‘baby boomers’. Coupled with the average life expectancy increasing by 5 years since 2004, it is clearly evident that demand for retirement living has increased and will continue to do so. “Without foresight from both the buyers and developers, there is going to be a significant shortage of suitable retirement development opportunities in the foreseeable future. KwaZulu-Natal is already seeing a huge gap with the demand for retirement living far outweighing the supply. The reality of the matter, shows established retirement homes with waiting lists that are longer than the average life-expectancy,” says Murray Collins, Director Collins Residential, a subsidiary of H. Collins & Sons Group.
Mount Edgecombe Retirement Village, offers an opportunity to a range of investors, from those who are looking for a retirement home now or for later, and is especially a great product for property investors. In most cases, when the property is secured with a deposit, the buyer then sits back and waits 18-24 months before making their first payment at transfer, seeing between 20% to 30% capital appreciation growth within that period.
Collins explains, “What few people understand is that some of the better retirement developments are experiencing capital appreciation and rental yields that far exceed traditional residential stock. Retirement developments provide some of the best investment and future planning that one could possibly hope for. An example of retirement investments experiencing capital appreciation can be seen within established retirement estates in Umhlanga, where certain units have appreciated by more than 200% over a 2-year period and where rental income, on a moderately sized 3-bedroom unit, fetches from R16000 and up to R20000 per month. This makes for an exceptionally strong and stable annuity income once the unit is paid off. From our experience, we often find with the first buyers in a scheme like Mount Edgecombe Retirement Village’s, the returns are fantastic, especially given this is a sought-after product.”
Investors looking to buy at Mount Edgecombe Retirement Village to rent out their units, will be assured to know that there will always be a tenant demand, as well as assurance that there is almost zero rental default risk.