“What really underpins our model is that we’re not so much selling a home, we talk to our residents about ‘what would your life look like if you had an extra couple of hundred thousands dollars in the bank to support the pension?'” Ingenia chief executive Simon Owen said. “There’s a meaningful arbitrage between what the resident can sell their home for and what their buy-in price is in one of our communities.”
…. But [these] companies face challenges too. The main one is the built communities are a land-hungry model that requires access to lower-cost real estate. Another key risk is the state of the broader residential market. A meltdown would disrupt the transition of downsizers into the prefab communities.
… landlords do not just rely on home sales. At Ingenia for example that revenue accounts for just 30 per cent of its total income. The rest is from the rent roll, an annuity style income that flows on regardless of vicissitudes in the property market. Much of that income total, in turn, is underpinned by government-funded pensions. “Our residents have very low credit risk,” Mr Owen said.
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