No we do not.
We have one BULL and one little deformed calf.
Whoever youngbull is... a true legend.
Great post.
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You're such an interesting poster to follow Bull! You don't present a balanced perspective of the facts, which suggests you may be more interested in appearing 'correct' than actually being correct. Implicit bias can ruin an investor!
In terms of Fletcher's village - quite the interesting update. Have you considered whether sharing capital gains may actually be reasonable in this context, Bull? Are there any distinguishing features to the traditional retirement village?
If we look at the article, we see the shared capital gains approach is (likely) only possible because the village operates on a 'low cost' model. We need to consider whether sharing capital gains would continue to be sustainable if it offered traditional retirement amenities.
fbu being the builder will have synergies in development other operators would never be able to compete on. so if there model works they can in the future scale up or down the offering
Further, the article states these villages are designed to 'plug the hole' between home ownership and a traditional retirement home. This means your target client will need to spend a large sum of money when they finally do move into a traditional retirement home. It will be very hard to convince that person to use your service if you are going to take all the capital gains, as they risk not being able to afford the retirement village when the time comes.
exactly fbu offering if works will differniate them big time ffrom other operators , other operators may have to change there models to compete if fbu successful which means there cashflows will implode.
Finally, the village does not offer care, does not offer any ancillary services, and does not offer any amenities. When considering all of these factors, the 'village' appear to be more in line with traditional home ownership than an actual retirement village. In that context Bull, it would almost be unreasonable not to share capital gains with the resident? Otherwise, you are effectively saying: use our service, which is basically like owning a home, but you don't get any of the benefits of owning a home. The article states itself: the Fletcher's village is designed to operate as a 'downsize' option similar to home ownership.
if there model works they can scale up or down offerings and target other companies
Next, you have implied that this is a nail in the coffin for the retirement sector. Further, you posted this on an Oceania thread, implying this is a threat to Oceania. Have you considered whether these services are actually operating in the same corner of the market, Bull?
as above if there model works cashflows will implode if others are forced to adopt no cap gains , less fees etc
Let's examine. Oceania offers a full care, full amenity, high quality premium offering. By contrast, Fletchers village offers no care, no amenities, very few ancillary services and certainly not a premium offering. Do you realistically consider that a potential client of Oceania will actually consider this village as an alternative? Oceania clients use its service because they consider they will eventually require care and want an upmarket service. Fletcher does not offer any of those elements. You could argue that Fletcher could offer these services down the track, but we know they cannot. They have rabbit holed themselves into a low-cost model.
no they have the synergies ... massive being the builder
Bull, I notice your post does not consider any of these aspects (regardless of whether they are correct or not). Did you potentially just post it without actually applying any critical thought? Very curious to hear your opinion - always looking for alternative evidence to test my investment thesis.
have to look at the big picture , ie in the future not the short term for long term investing. market will be carved up even more if fbu model works meaning less customers for the others to fight over and cashflow problems if the y have to change there fee model's combined with what i say about covid and financials of retiree's in 10 yr due to inflation etc. fbu has the power to disrupt the sector big time
YoungBull laying the smackdown on dad lol
I've reposted Bulls reply here with a different color, makes it easier to read.
To figure out Bulls reply from Young Bulls post was not difficult, I simply separated the sentences that appeared to be written by a dyslexic child out from the rest
You're such an interesting poster to follow Bull! You don't present a balanced perspective of the facts, which suggests you may be more interested in appearing 'correct' than actually being correct. Implicit bias can ruin an investor!
In terms of Fletcher's village - quite the interesting update. Have you considered whether sharing capital gains may actually be reasonable in this context, Bull? Are there any distinguishing features to the traditional retirement village?
If we look at the article, we see the shared capital gains approach is (likely) only possible because the village operates on a 'low cost' model. We need to consider whether sharing capital gains would continue to be sustainable if it offered traditional retirement amenities.
fbu being the builder will have synergies in development other operators would never be able to compete on. so if there model works they can in the future scale up or down the offering
Further, the article states these villages are designed to 'plug the hole' between home ownership and a traditional retirement home. This means your target client will need to spend a large sum of money when they finally do move into a traditional retirement home. It will be very hard to convince that person to use your service if you are going to take all the capital gains, as they risk not being able to afford the retirement village when the time comes.
exactly fbu offering if works will differniate them big time ffrom other operators , other operators may have to change there models to compete if fbu successful which means there cashflows will implode.
Finally, the village does not offer care, does not offer any ancillary services, and does not offer any amenities. When considering all of these factors, the 'village' appear to be more in line with traditional home ownership than an actual retirement village. In that context Bull, it would almost be unreasonable not to share capital gains with the resident? Otherwise, you are effectively saying: use our service, which is basically like owning a home, but you don't get any of the benefits of owning a home. The article states itself: the Fletcher's village is designed to operate as a 'downsize' option similar to home ownership.
if there model works they can scale up or down offerings and target other companies
Next, you have implied that this is a nail in the coffin for the retirement sector. Further, you posted this on an Oceania thread, implying this is a threat to Oceania. Have you considered whether these services are actually operating in the same corner of the market, Bull?
as above if there model works cashflows will implode if others are forced to adopt no cap gains , less fees etc
Let's examine. Oceania offers a full care, full amenity, high quality premium offering. By contrast, Fletchers village offers no care, no amenities, very few ancillary services and certainly not a premium offering. Do you realistically consider that a potential client of Oceania will actually consider this village as an alternative? Oceania clients use its service because they consider they will eventually require care and want an upmarket service. Fletcher does not offer any of those elements. You could argue that Fletcher could offer these services down the track, but we know they cannot. They have rabbit holed themselves into a low-cost model.
no they have the synergies ... massive being the builder
Bull, I notice your post does not consider any of these aspects (regardless of whether they are correct or not). Did you potentially just post it without actually applying any critical thought? Very curious to hear your opinion - always looking for alternative evidence to test my investment thesis.
Hi Bull - thanks for your prompt response.
You certainly raise some valid points.
Effectively, you are saying that Fletcher's development margins on new builds would be much higher than other retirement operators. Of course, capital gains, fees and ORAs are all repeating sources of income. As Maverick points out, the real money in a retirement village is made on resales.
Based on your logic, Fletchers would initially make more money on a build (compared to other operators), but that same build would become less and less profitable (compared to other operator models) each time it is resold. Other operators would eventually catch up, and then overtake Fletchers profitability over the life of the village. Fletchers may recover some of that ground by saving costs on the building maintenance, but I would expect that amount to be negligible.
Amenities are an ongoing cost. Under Fletchers model, a village's profitability would gradually decrease (in comparison to other models) while their amenities costs stay constant.
Are these assumptions correct? If so, would Fletchers (over the long term) actually not be able to fund amenities in their villages? If so, would their villages therefore not be able to offer the same service as OCA?
Keen to hear your thoughts. Thanks.
I can't really see an advantage to these Fletcher houses over any other low maintenance unit on the market. What am I missing?
i put some thoughts in the reply above ... these are my thought's only and as such it is how i position my portfolio .
anyway this is not going affect current operators in the short term ( unless regulatory action happens around fee's etc ) but over time as fbu scale up and if there model is successful.
investing is about making assumptions and positioning correctly. ie selling out of retirement sector when headwind's were evident and being patient to re-enter when tail wind's become evident again. in this case for me it's about how the regulatory environment plays out and now how fbu model goes. there's no rush headwind's at the moment are not going away quickly. in the meantime current operator's will continue to see there cashflows sqeezed by cost inflation and falling property value's so dont bank on share price's going to the moon anytime soon.
I think they offer monthly medical checks. It is definitely not a full service type village - more independent accommodation with a minimum age limit. Also, it is unlikely that we will see the same level of house price appreciation for a long time, as previously there was a systemic drop in interest rates. So the capital gains sharing (after refurbishment costs) model could be a moot point for many years. The lower deferred management fee percentage is not so comparatively attractive if the original buy in price does not have as big a discount to freehold house values as other Villages anyway.
If you have an ORA unit at an Oceania village, do they guarantee that you can move into that village’s rest home or hospital when you need to? Some people who need extra care would probably need that extra care quickly (like after a fall or deteriorating medical condition) and may not be able to sit very long on a waiting list until a vacancy opens up.
No, I doubt they can guarantee you a rest home or hospital level bed, but I assume you might go to the top of the waiting list as an existing ORA client?
Either way, if someone had a major fall requiring transport to hospital, they may go to an AT&R (Assessment, treatment and rehab) ward to rehabilitate, before returning to their unit. It may be that if they were then assessed as needing hospital level care, that care could be provided in their unit temporarily, until a care bed/care suite became available.
This is why the care suite model is going to be a game-changer. If you go with the care suite you are guaranteed increasing levels of care will be provided within that suite, which means you can effectively stay there until you die. The only exception to that rule, will (I think) be if you required dementia level care at some point. If someone developed issues with wandering, aggressive behaviours etc, this would probably not be able to be managed in a care suite situation. A lot would depend on the level of dementia and whether or not the person was living with a spouse. Some people with dementia would be OK staying in a care suite, but a lot would not be.
All of this is just guesswork on my part, so I could be way off base. Mav and Ferg might have some actual knowledge of how this would work.