Sunday, December 31, 2017

Happy Newness!

Some people spend their lives building walls against floods. Eventually the flood comes and they say, "See, I told you so." Whereas, the enlightened ones have moved on to higher grounds years ago. Happy Newness everyone! I wish you all heightened awareness and not to be limited by our own beliefs. Do more. Live more. Love more. ~ Kenneth Tan

Tuesday, December 12, 2017

Part 3 - Who Are The RV Customers in Malaysia.

There is still confusion among many Malaysians about living in a retirement village, most responses being neutral or towards hesitation. Those that have felt the need and have been exposed to the concept abroad clearly welcome the news of such facilities being created in Malaysia. Those that hesitated, some have confused this with nursing homes and aged care facilities, worst being the Malaysian old folks homes. These are all separate subjects but nevertheless linked chronologically.

While I have been understudying and growing with the industry throughout the last 8 years, I take clear cognizance that there is no singular answer to the many facets of this industry. Each and every retirement facility will cater to a different mindset of people.

The retirement facility is a lifestyle choice, whereas later on in life the aged-care facility may feature due to physiological or medical needs.

The people who will choose the RV lifestyle are (in no particular order) :

A. EMPTY NESTERS
It is common among the upper and upper-middle class in Malaysia, to educate their children abroad. And many choose not to return to Malaysia after graduation for better career opportunities. This with the support of their parents.
> A retirement facility provides community and communal facilities for the parents.

B. THE SINGLE PERSON
The ones concerned fear they may be alone in their apartment should they require medical assistance or emergency help. Some have mentioned their fears of dying alone in their homes without anyone noticing. These are the ones who have few relatives or none. Most are retired professionals with very healthy retirement funds.
It is quite common talk among friends about jointly purchasing a piece of land and building a home to retire together. The problem starts when one by one, they fade in life. And subsequent ownership issues.
> A good landed retirement village may answer their needs clearly and immediately. The location matters then, as of now there is only one in Ipoh and the other in Kuching - Eden On The Park available. (I do know many developers are finally tuning in to this industry. But they must get their priorities right. This is a long term game. Not for immediate returns.)
> It will also be easier to liquidate one's ownership when one passes on.
> 24-hour emergency button and friendly neighbours are all important.

C. DOWN-SIZING
Big homes become just big houses to be maintained when the party's died down. Alarms, maids, driver, pet animals, 4 doors, 20 windows, garden, swimming pool, et cetera. A large house becomes a hassle without relevant use of the space.
> A high-end retirement facility may help improve the quality of life. In a gated & guarded environment, with just one key, the person/s can just lock up and fly off to vacation without worry.

D. LIQUIDATING FOR RETIREMENT
An example profile is the typical Petaling Jaya bungalow owner from the 1970s. Purchased at below RM50,000, the land itself is now worth thirty times more (although leasehold). Some pensioners may not have sufficient funds set aside for renovations and upkeep, or to upgrade their lifestyles. They may have kept for their children or for medical needs later.
> Liquidating wisely and choosing a retirement facility at below 40% of their newly available funds may put them not just in better financial position, but also in a new refreshed environment. 
> In very near future, the knowledge and skills of RV residents will be tapped on and in return work opportunities become a new focus in life.

E. THE FOREIGN BUYER
Retirement Villages that adopts the leased model are commercial business arrangements. Thus, the minimum price quota for foreign home purchase or RM1 million does not apply. However, the buyer need to apply for a resident visa or look into the MM2H program, of which there are many experts around. I am not one.
> This is good news for developers and land owners.
> Malaysia is consistently ranked The World's Top Five Retirement Destinations. Penang and Ipoh being favourites.
> Here are the reasons why: Favourable forex rate, Lower cost of living (high quality), English is widely used, Multi-language, Relative safety, Food-food-food, Universality, Cosmopolitan, Cultural, Asian, Friendliness, Transportation, Centrality, World class medical facilities and infrastructure.

Here are just 5 common profiles of the potential retirement living residents in Malaysia.

Kenneth Tan: I am an advocate of quality retirement lifestyles living in Malaysia. While all these seems to be focussed on the wealthy, it must be understood that the writings are geared towards understanding retirement living industry as a business. I choose to share the knowledge I have in the hope of fast-tracking those whose lives have just been opened up to the industry. 

Sunday, December 10, 2017

Part 2 - The business side of Retirement Living Industry in Malaysia

The best ownership model for a good retirement village is still the leased model. Here are many reasons why.

1. Integrity of concept.
A retirement village is created to cater for those above 55 years of age or whichever that is set by the owners/operators. This protects the sanctity of such properties. If the single resident chooses to marry a 40-year old somewhere down the road, the new spouse does not qualify to live in the property. The stakeholders can decide on this. Should they have an offspring, the integrity of the village disintegrates. Being a leased model, it is easy for them to dispose their lease and find new residence.

2. Evicting neighbours from hell. 
The best years of our lives when we retire can turn out to be the worst should karma intervenes and present us with neighbours from hell. Again, the leased model allows for the operator or management committee to control the sanctity of the place. This is the same with shopping malls in Malaysia; valuable lessons learned - Berjaya Times Square, Summit Subang, Amcorp Mall, etc.

3. Legacy property business.
Being a leased model, the ownership of the land is perpetual to the landowner/developer party. With conventional development, whatever choice land is never yours again. However, you do need to build the retirement village facility first before you sell. TI Homes invested RM10 million just on the clubhouse (inset photo) alone in time for the official launch.
The RM10 million clubhouse at GreenAcres.

4. Ease of disposal of asset.
A few years back there, there was a retirement purposed property offered for outright sale by the coast in Selangor. It was a reasonably large project with many facilities and features. I have limited information but I do know that uptake was extremely low. Being larger units and a higher price tag makes it competitive with itself.
For an investment of RM2 million, it is likelyhood the intending buyer may be discouraged by the children to move overseas with them instead. The children may not want to inherit a RM2 million property thousands of miles away with a niched buyer profile. They would not likely be using this property as well, not for a long while. The asset will become liability. With the leased model, it is almost automatically resolved upon death or voluntary exit of the property.

NEXT: Who and why do people choose to live in a retirement village.

Thursday, December 7, 2017

Retirement Living industry in Malaysia (Part 1)

RVs have high potential for mid term and long term rentals.
Ever since the 1980s, different groups and individuals have wanted to establish lifestyle retirement villages (RV) in Malaysia. This was yet not an industry back then, neither is it very much now, but it was certainly a foreseeable and felt gap in the country. The Sunrise group was one of the firsts to put their money where their thought was in the 90s and created one such property. They should be lauded for doing that even though in hindsight, the market was not ready to 'retire' in a village. Perhaps back then, the ownership model was not evolved yet.
Today, many RVs are based on the life-lease model. Many people in Malaysia cannot fathom this model. Living in an RV is clearly not about property investment, many must clearly understand. A Retirement Village is also neither a holiday resort nor a hotel. And most importantly to know, a Retirement Village is NOT a nursing home nor an aged care facility.

Are property developers ready?
After being an understudy since 2009 on this subject matter, I can add that this may not be the most accurate question to be asked. It takes more than property developers to create an RV. Are operators in place? Is the marketplace ready? Are city planners and local authorities ready? Is the immigration authority ready to provide better visa arrangements (not just MM2H) for potential RV residents from overseas. Long stay visas? They all have to work in tandem on their own course but with the same objective to facilitate this industry to activate and blossom.
The good word is, much progress has been made in recent years and now. And Malaysia is more than ready to let this new business grow. I term this as business because this can only happen as a self sustaining business model. It costs a lot of money to create and operate a successful Retirement Village. But yes, you can share-buy a plot of land with friends and call it such. But will you have 24-hour concierge, community manager, shuttle bus, activities, dance classes, art, movie hall, friends and so on?

The recently launched - a completed livable GreenAcres Retirement Village in Ipoh is the best thing to happen for the industry in Malaysia. I will derive more in my next posting. If I can only choose one keyword to describe the owners at Total Investment Group, it is INTEGRITY ~ Doing what is right even when no one is looking. I have been totally fortunate to have started on my own learning journey with them since 2010, understudying with their Australian consultant. GreenAcres has set the benchmark for the region, in terms of attention to detail, passion, care and investment.

More in the next postings about GreenAcres RV, Ipoh, Perak, Malaysia.

Other areas I hope to share and enlighten about:
> Other groups progressing on the retired lifestyle industry.
> The intrinsic design of Retirement Villages.
> Why lease and not outright sale?
> What about aged care?
> What is ageing in place?
> Where is a good place to build an RV?
> There are so much learnings to be had from Australia. Even bad case studies.
> The legacy business.

Sunday, December 3, 2017

The Coming GenZeration

Baby Boomer managers are in for a bigger shock! Complain they did about GenYs and the 'differing' attitudes and workplace nuances.

They will be very shocked to find GenZ's willingness to take up roles of almost any kind with ease and immediacy. Working at the coffee machine, online research, data entry, gardening, cleaning, teaching, helping out at the stores... Maybe not as diligently at home but with certain understanding of tasks at the workplace and pronto, to carry out the work.

Reading online about them, you will know they are natives to the digital world. My three girls grew up with the now-archaic Apple PowerMacs nursery games almost from hospital birth.

These are our nation builders. They grew up in an online world where they farmed vegetables for gold coins. Sold vegetables. Traded. Built more farm houses. Built hotels. Built homes. Learned to save. Collected more Nuggets. Planted carrots. Worked as a cashier. I honestly can never remember the names of the games they played and are playing now, except one. But I do extract from them their whys and 'what's-happenings'. I only know of the YoVille that my wife and I family-ventured with them. At my last check YoVille is now YoWorld. Certainly most appropriate name change to mark the coming of the generation.

They don't really have much chips on their shoulders. They know they just have to get things done. This is a generation that has built cities, villages, homes and businesses. They have traded globally from the age of five.

And in Malaysia where we live, GenZ do not start out in life having to think of buying homes. They are seeking their roles to play in the worldplace. I have not seen Malaysian youths take up holiday jobs with so much ease as now. Or maybe I was in a cocoon.

While these are clearly my opinions, they are witnessed from growing up with all 3 GenZs at home. I look forward very much as they have already started transiting their roles to the 'real' world. Here again lies the ponder - Is the virtual world also not a real world?

Welcome, to the kids with the mark of Z.

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