HOSPITALITY & RETIREMENT VILLAGES: AN ENGINE OF LOCAL GROWTH
The world is living through a pandemic that has already lasted for more than one year and which will reshape world economies and social behavior for several years to come. Greece has been no exception to this and, although it
has dealt with the pandemic in a relatively successful way compared to comparable countries, its economy — already hit by a ten-year debt-driven recession — has suffered considerably. Its landmark industry, tourism, took a huge blow in 2020 and will be considerably underperforming in 2021.
Despite such an economic blow, investment opportunities appear possible in exploiting the country’s “God-given” advantages. The huge globally emerging market of “Retirement Living” is one of them. Retirement Villages can be a “win-win” case for all involved (end users/retirees, professionals involved, developers, and investors, etc.), providing the economy with much needed liquidity and a multiplier effect that is anticipated to impact the entire region where those villages are to be developed.
Why this “niche” market segment? Because Greece:
- Has ideal all-season, mild weather conditions.
- Its hundreds of islands and its mainland are surrounded by three seas, showcasing stunning beaches and wonderful mountain areas.
- Has the historical & cultural focal point of Western civilization, the birthplace of many sciences, philosophy and democracy, while visitors can easily and fairly quickly visit other countries of interest in the region such as Israel, Egypt, Italy, Turkey, Malta, while other well-known places of culture and history such as Vienna, Paris, London are also 2-3 hours away.
- Has friendly people, accustomed to offering hospitality to millions of visitors each year. In 2019 alone, Greece was visited by over 33 million people.
- Is world-famous for its local Mediterranean cuisine.
- Has an advanced healthcare system and good infrastructure.
- Possesses a supply of real estate product country-wide, covering a large cost spectrum for rental and for-sale assets.
- Has developed very appealing tax and investors incentive programs.
- The cost of living is significantly less
Property profile:
- The goal is to offer both urban and suburban or island/ village destinations that meet product characteristics and offer retirees the best “value-for-money” proposition.
- The properties could be one, two, or three-bedroom single units ranging from 70-160 square meters. Moreover, they could be customizable per customer’s needs and desires.
- The villages will feature social and health clubs, swimming pools, a clinic, shops, pharmacy and special concierge services such as transportation, shopping, travel, educational as well as organizing volunteer services.
- The units could be owned or leased, and timeshares (US model) could become available (managed by renowned hospitality names).
Here are some economic and social advantages related the development of such villages:
- Construction jobs and activity will boost the local Retirement villages can be about a €20 million investment and can provide construction-related work for hundreds of persons per 150-unit village.
- There are many chain multipliers in other industries (retail, restaurants, medical, tourism, etc.).
- Social at-large effects vary from volunteerism,
to interaction, to strengthening institutions and multiculturalism. People in the retirement communities volunteer an average of 3.5 hours a week. - The average 150-unit village generates about 120 jobs and benefits a local area’s total economy by around €2 million per annum in wages alone.
- They support local contractors and companies supplying the village. The indirect employment contribution to service firms is also estimated to hundreds of thousands of Euros.
- Residents make contributions in maintaining the economic vitality of retailers, restaurants and other local establishments. This contribution exceeds €1.7 million (for every 150 unit village) a year.
- Residents are visited by nurses and general practitioners more because they can visit more than one patient in one place.
- Retirees are saving money on living expenses by downsizing and sharing communal spaces. They are also saving time on chores and people can enjoy retirement more.
Incentives provided to retirees willing to move to Greece are in two directions that
can be implemented or even combined depending on the profile of the interested party, considering that: (a) No visa is needed for citizens of an EU country, Iceland, Norway, Lichtenstein or Switzerland, (b) Non-EU citizens can enter with a “D” type visa, (c) US citizens can enter for 90 days with no visa or with a visa for >90 days.
The main incentives are:
- The Golden Visa program that offers residency permit provided an investment is made of € 250.000 +. The visa is held for five years and can be renewed so long as the buyer is still holding the asset and meets the requirement of stay for at least 183 days each year. The program also applies to long- term leases for a minimum of ten years.
- The 7% Flat tax rate offered to those that move their tax residency to Greece for the next 10 years. Applies to all types of foreign income.
The Developer / Investor side:
Product exists, yet the anticipated demand will require new investments as well as refurbishment of existing ones. Developers can look forward to healthy profit margins on properties for sale, and attractive yields for properties that will be leased. Newly, carefully designed projects, will elevate the “retirement facility” product to new needed levels.
Sources:
An Economic, Social and Environmental Impact Assessment of a Typical Retirement Village, English Care Villages Ltd. 2016.
Economic Impact: The Senior Living Effect, Argentum, June 2019.
Making the case for retirement villages, Karen Croucher,
Joseph Rowntree Foundation.
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