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Ryk Neethling on Evergreen: Retirement on the ‘Life Right model’
Olympic swimming gold medalist Ryk Neethling now finds himself in the vineyards caught between Stellenbosch, Franschoek and Paarl. He’s the marketing director and a shareholder of Val de Vie. In this podcast with Biznews publisher Alec Hogg, Neethling discusses a new retirement village, which is right in the heart of the upmarket estate. He describes the motivation behind Evergreens as being geared towards community and social connections – the key to longevity – and explains how the retirement village is based on the Life Right model – which is essentially a long-term lease. Partnering with Evergreen is Val de Vie and PSG, and Neethling says it promises to be ‘more than what the brochure says’. – Nadya Swart
The discussion is brought to you by Val de Vie and I’m in Ryk Neethling’s office at the upmarket estate and we’ve been talking about your development and the project which would have special appeal to a lot of the business community. Many members of our community who are retired or looking at retirement places – some want to go overseas, some are looking at various parts of the country, but Val de Vie is not known – certainly this part of the Cape is not known for its retirement options and yet, you’re in that game now.
Yes, the retirement village for us is the last piece of the puzzle. I think we’ve left the best for last. It was always part of the plan to incorporate retirement. Phase 1 of 88 homes is almost sold out, so it’s been quite successful.
Was it just an experiment to begin with?
No. When completed it will be the biggest retirement village in the Western Cape. It was part of the plan, but we are quite conservative as developers – we do things in small phases – so the first phase was 88. We don’t like to take on debt and it’s almost sold out. We’ve got big plans for over 400 houses. We’ve got 200 apartments, we’ve got more than 80 beds in a frail care centre as well as a dementia ward. It will be one of the best in the country. As you said, the area is not well-known for retirement, but just like Val de Vie, this area is incredible. We’re 25 minutes away from the airport and about 35 minutes away from the Cape Town Waterfront. We’re 5 minutes away from Paarl, 15 minutes away from Franschhoek, 15 minutes away from Stellenbosch – so we’re really in the middle. We’re an hour away from Hermanus, so the lifestyle offering is just incredible. The weather’s great and the facilities that we have here on the estate…. The retirement village is right in the middle of the estate.
You’re not putting all the oldies out on the boundary?
Unfortunately there’s a bit of a trend like that, but our retirement village is right in the middle. It’s the early stages, but we see a multigenerational richness – grandkids to the kids and the grandparents – all living on the same estates.
Community is quite a big thing for you here. It’s interesting that you know a lot of the people, they seem to know each other, was that part of the DNA from the beginning?
No, but it’s definitely one of those trends. If you look at one thing that is key for longevity; sure you need to exercise, you need to eat healthily, not smoke nor drink too much – but your social connections is the one thing that’s going to ensure that you live a long life. So the community is incredibly important for your overall health. We started to see this in all the studies and almost everything that we do is geared towards that community. We’ve got dog parks, yes it’s great for the dogs but it’s also a connection point for people.
Where does that idea come from? Why even consider that within such an upmarket estate?
We had the space and it was an idea that was brought up in one of the development meetings and we thought we’d give it a go. I think we had about 2,500sqm fenced off and we also put some tunnels in, and within maybe a month – we realised it was too small. It was very popular and there was a high demand from the residents to make it bigger – now it’s just under a hectare. It’s a big connection point. We’ve got more than 40 km of mountain bike trails – we’re the home of the ABSA Cape Epic which finishes here every year – we’ve got walking parks, we’ve got three gyms, we’ve got a coffee rotisserie (which is also great for the community), and we’ve got a social committee that organises a “potjiekos” competition.
You won’t get lonely.
No, and we almost have to coach people when they move here from other parts of the country on how to be social again, because the sad reality is that, with all the security issues that we have in South Africa, people don’t talk to the neighbours. There’s no high walls in between the houses here. It’s also great for security, because when somebody sees the garage door standing open or a side door, they just walk over to the neighbour or they can call him and say, ‘I think you left your door open’. So, there’s a lot of benefits and we focus a lot on the community. For us – it’s really worked extremely well.
Now that’s an ambitious retirement plan or retirement unit that you’re putting into the middle of the estate. Security on this estate is already a high priority, so I guess that’s even more secure. But how do these plans work? How do people buy into a retirement village? Do you have to be a certain age? Do they have to give the unit back when they die?
Our retirement village is based on the Life Right model. So, at least one of the buyers needs to be over 60 years old. The Life Right model – in short – is a right to live in the house until the last member of the marriage lives and it gives people lots of flexibility. If you’re over 70, there are some discount options – when termination of the Life Right depends on what the estate gets back.
Termination of the life right?
This occurs when they die – which is a reality for all of us.
So what happens – you buy the unit and then you live happily for 20-25 years in the community that you spoke about, have lots of coffee every day….
Life Right is essentially a long term lease. The developer takes care of the house – so it’s stress free living. There’s even more community activities that the developer will initiate and, if the full price is paid, then the deceased estate will get the full purchase price back and the developer gets the house back.
And there’s no inflation on value accretion?
And you say if they pay the full price, is there another option?
Yes, so if you’re over 70 – you can get discounts, but that will impact the money that you get back. So, it just gives a lot of flexibility. If people want to pay 50% of the purchase price, they can invest the other 50% into a fund if they feel more comfortable with that, or they can use it to travel.
Is it as much as that? 50% if you’re over 70?
And what are the price points?
We start at R3.2m. We haven’t launched the apartments yet, but that will happen soon. We’re quite excited about the apartments, there is already a clubhouse there as well as a clinic that has already ben built – so the entry level is just over R3m.
Will the apartments be less or more?
They will be less. The apartments will obviously be a little bit smaller, the size at the moment is about 120 sq m. So we’re quite excited about this. The Life model is how retirement is sold overseas, in Australia, New Zealand and the UK. It’s a very popular model and I think as people get more accustomed to it – it’s just more of a stress free retirement – and they can really enjoy their retirement.
Let me just understand this. So if you’ve got R3.5m, you can buy yourself (and I’ve seen them, they are beautiful) a retirement home, a self-standing house – and then you live there for as long as you live.
What other costs are involved? Are there levies?
Yes, so you pay a levy which is equal to what people pay on a normal house and that gives you access to all the facilities.
What is that?
So that’s a pretty reasonable amount and then that’s it? You say that you don’t have another cost in your life. If you pass on – your estate doesn’t get anything except for the purchase price?
Yes. So you get the purchase price back, but if the market improves you don’t get the growth.
So there’s no secondary market in these properties? In other words, you can’t sell it to a friend if you wanted to?
No, the developer takes it back and the developer will sell it again.
Hence the retirement. You can’t sell it to a 30 year old as a cheap way to get into Val de Vie. Where did this idea come from?
We’ve partnered with Evergreen – who are one of the leaders in the country. They’re also a shareholder in Val de Vie Investments – which is the holding company. They are really the experts, so we decided to partner with them. We’re also backed by PSG. There are some horror stories out there of developers not finishing what they promised, but people can be assured that between Val de Vie, Evergreen and PSG – you get more than what the brochure says.
Have Evergreen got other projects in South Africa?
They’ve got many projects. I think they’re kicking off with a big one now at Zimbali, they’ve got Bergvliet in Cape Town, they’ve got a few in Gauteng – so they’re an established brand.
How big is it? You mentioned that there are another 400 properties coming on – is that it? If you sold 88 with another 400 about 500 dwellings?
Yes, and then the 200 apartments and the frail care section with the dementia ward – so that will be (let’s say) between 600 and 700 units. We think that’s one of the biggest and with that kind of scale – you can do really nice things for the people who decide to retire here.
You mentioned frail care – who runs that? Do you have your own staff or are you partnering there as well?
That will also be Evergreen, as they handle the management of the whole estate. We’ve got a partnership with the University of Stellenbosch with a lifelong learning program where the professors from Stellenbosch come in – so they organise all these things. They do trips – educational trips and entertainment trips – so it’s a really big operation and very slick. There’s a lot of hospitality guys that come from Sun International and from Southern Sun who are operating in these different villages, so you can see the hospitality aspect coming through in the lifestyle.
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