9 July 2019
Struggling golf clubs are taking a swing at retirement village projects to keep their finances on par, in a move which is also helping drive new active lifestyle and downsizing opportunities for seniors.
Downsizing.com.au is aware of at least seven new golf course retirement living projects across Australia.
Already a popular trend with war veteran and bowls clubs, Golf Australia says there are financial advantages for golf clubs to couple up with retirement operators.
Stephen Pitt, CEO Golf Australia told Downsizing.com.au: “Any time a golf club or facility can generate significant revenue that ensures it a healthy future is a positive outcome. This is particularly true when it’s done in a way that doesn’t diminish the experience of users or members.”
According to Pitt, putting retirement villages on golf courses makes sense, given that several independent global studies demonstrate that golf keeps people mentally and physically active and socially connected.
“So, golf, as a sport, makes sense for people of all ages, but particularly for those looking to stay active and experience a better quality of life as it progresses,” he said.
Below is our analysis of the trend in different States:
Members at Indooroopilly Golf Club in Brisbane and Toowoomba Golf Club have agreed to allow retirement operator Aura Holdings to build retirement village operations on their hallowed courses. It’s been reported that the Indooroopilly golf club received planning approval for 215 new retirement village dwellings in June.
Tim Russell, director, and co-founder of Aura says: “Golf clubs are looking for other ways to make money, and quite often they have ageing capital assets such as a clubhouse. However, what they have in abundance is real estate.”
Russell says villages on established golf courses such as Indooroopilly will help retirees to age-in-place, rather than having to move into distant suburbs.
“They (the Indooroopilly and Toowoomba sites) are relatively close to large population bases and CBDs where residential land is often in short supply,” he said.
“At the same time, there are often very few existing accommodation offerings for the ageing population in those areas.
“Generally, the choice, is to try and age in place and bring in support or in some cases move a long way out of those suburbs. This is not ideal as older people are away from friends, family, the church, the bus, and whatever else.”
Meanwhile, RetireAustralia is currently marketing The Verge at Burleigh Golf Club on the Gold Coast which is overlooking the club’s 10th tee (see artist's impression above).
The project will feature 145 contemporary independent living apartments and 32 state-of-the-art care apartments for those requiring a higher level of support within their homes.
Residents who are members of Burleigh Golf Club will have access to the clubhouse facilities including a restaurant, gaming lounge and terrace bar overlooking the golf course. The village will be built in three stages, with construction on the first stage beginning soon. The first stage is expected to be completed by early 2021.
Separately, retirement village operator Reside Communities announced in March it had lodged a development application for Carindale’s Pacific Golf Club in Brisbane’s east.
The proposed retirement village will include 200 independent living apartments across seven buildings. The project will offer a mix of one bedroom, two bedroom, two bedroom plus study and three bedroom apartments, with many having golf course views.
In NSW, Newcastle Golf Club has signed a preliminary agreement with Principle Living for a development on its existing golf course land at Fern Bay. Principle Living is a joint venture between the McCloy and Stevens Groups.
Nearby, Merewether Golf Club has launched plans for a multimillion-dollar redevelopment including seniors-living apartments attached to a new clubhouse.
In Sydney, Chatswood Golf Club was in June successful in getting initial planning approval for 106-lot seniors serviced self-care housing development up to five storeys on the site of its current clubhouse.
In a letter to the Department of Planning and Environment from August last year, the club and its development partner Watermark said the proposal would help alleviate the club’s “dire financial position”.
The letter also stated that future retirement village residents would be given a 150-year-lease, and that the club would be entitled to 25 per cent of all deferred management fees paid by residents.
In late February, South Australia’s first fully integrated golf course retirement village, launched at Flagstaff Hill Golf Club.
More recently, in June, Living Choice began construction on 42 villas built on an old practice fairway. It is also planning further stages of the project, which will include a state-of-the-art clubhouse with shared facilities for both club members and village residents, and more than 140 luxury apartments.
Benefits to downsizers
According to Aura’s Russell, living on the doorstep of a golf course is an excellent place for retirement. “You have green views, fantastic locations and the actual amenity is fantastic,” he said.
At the same time, he said that retirement villages provide badly-needed financial support for these clubs, which are often asset rich but cash poor.
“As a general comment, membership of golf courses is in decline. Unless they change their business models and especially for those that choose not to rely on gaming, the game of golf as a single business line is becoming tougher to sustain,” he said.
Let’s face it, who can find six hours every Saturday and/or Sunday these days to hit a little white ball around kilometres and kilometres of fairways!
That said, building accommodation on a golf course can be akin to Greg Norman winning a US major.
“There are the planning issues because in most jurisdictions there isn’t a right to develop any form of accommodation on golf courses,” Russell says. “You have to be able to mount economic arguments about the sustainability and longevity of greenspace in certain areas to get traction.”
Usually, a developer will make a capital payment upfront, which can be used to update or build a new clubhouse and other ailing infrastructure and/or retire debt according to Russell. “We also pay a ground rent, which is an annual amount to [lease] the land.”
Moreover, a retirement operator will only usually offer additional services complementing those provided by a club. “We don’t do function rooms or food and beverage options so that residents will utilise the club’s facilities,” Russell confirms. “Instead, we will provide health and wellness offerings, such as quiet spaces, libraries, and business centres.”
“The existing facilities also mean that as a retirement village operator, we can underinvest in the social assets because they are already there.”
“For the club, it brings a captive market to their assets and increases their ability to have a profitable food and beverage and social services.”
By Anthony O'Brien on behalf of Downsizing.com.au - email the Downsizing.com.au newsroom on email@example.com