An Ethical Investment Model

KPV through their Next Generation model for retirement villages provide not only an attractive return to the investor but can be considered an ethical investment as the work to which the capital is put makes a positive contribution to society. Our aim is to make a better retirement option available to more retired New Zealanders.

New Zealand is getting older. Retirement can be a vulnerable time in life, a time when a community needs to provide support. Reducing a person’s concern about where they will live and how they can afford it can be a huge relief. Yet the retirement industry is one which analysts refer to as a money machine. The cost to the community is that the standard retirement model removes the residents’ financial capability to make decisions in their retirement.

Put simply, if a resident has been in a village for a few years and wanted to leave they probably could not afford to.

Under the typical retirement village contract, upon sale, the operator receives all the capital gain in the unit plus between 20 and 30 percent of the original sale price. This means that the village operator rather than the resident benefits from the capital gain.

As an example of the typical retirement model, house prices in Auckland rose 70% in four years from 2012 to 2016 (enz.org). So, if in 2012 a resident bought a unit for $400,000 then upon sale in 2016 the sale price would be expected to be $680,000. In a traditional village operating under a 25% deferred management fee the village operator would receive $380,000 while the resident would only receive $300,000. In comparison, under a KPV Next Generation model the resident would receive $585,000, almost twice as much. You can use the retirement village calculator on the Karaka Lifestyle Estate to compare villages under different scenarios.

KPV aims to make investing in a retirement village rewarding, both financially and socially. We want to see residents be free to make decisions on where they live and enjoy living there. At KPV we believe in providing an environment where residents can thrive. Our model focuses on the residents’ wellbeing at the same time as creating a profitable investment for our investors.