Valuation methods for resident funded retirement villages in Australia : a practitioner's perspective

Designed for independent living, retirement villages provide either detached or semi-detached residential dwellings with car parking and small private yards. Retirement village developments usually include a mix of independent living units (ILUs) and serviced apartments (SAs) with community facilities providing a shared congregational area for village activities and socialising. Retirement Village assets differ from traditional residential assets due to their operation in accordance with statutory legislation. In Australia, each State and Territory has its own Retirement Village Act and Regulations. In essence, the village operator provides the land and buildings to the residents who pay an amount on entry for the right of occupation. On departure from the units an agreed proportion of either the original purchase price or the sale price is paid to the outgoing resident. The market value of the operator’s interest in the Retirement Village is therefore based upon the estimated future income from Deferred Management Fees and Capital Gain upon roll-over receivable by the operator in accordance with the respective residency agreements. Given the lumpiness of these payments, there is general acceptance that the most appropriate approach to valuation is through Discounted Cash Flow (DCF) analysis. There is however inconsistency between valuers across Australia in how they undertake their DCF analysis, leading to differences in reported values and subsequent confusion among users of valuation services. To give guidance to valuers and enhance confidence from users of valuation services this paper investigates the five major elements of discounted cash flow methodology, namely cash flows, escalation factors, holding period, terminal value and discount rate. Whilst there is dissatisfaction with the financial structuring of the DMF in residency agreements, as long as there are future financial returns receivable by the Village owner/operator, then DCF will continue to be the most appropriate valuation methodology for resident funded retirement villages.

Resident-funded retirement village valuations : complications with the application of the DCF

Retirement village assets are different from traditional residential assets due to their operation in accordance with statutory legislation. Designed for independent living, retirement villages provide either detached or semi-detached residential dwellings with car parking and small private yards with community facilities providing a shared congregational area for village activities and socialising. In essence, the village operator provides the land and buildings to the residents who pay an amount on entry for the right of occupation. On departure from the units an agreed proportion of either the original purchase price or the sale price is paid to the outgoing resident. As ongoing levies are typically offset by ongoing operational expenses the market value of the operator's interest in the retirement village is therefore predominantly based upon the estimated future income from deferred management fees and capital gain upon roll-over receivable by the operator in accordance with the respective residency agreements. Given the lumpiness of these payments, there is general acceptance that the most appropriate approach to valuation is through discounted cash flow (DCF) analysis. There is however inconsistency between valuers across Australia in how they undertake their DCF analysis, leading to differences in reported values and subsequent confusion among users of valuation services. To give guidance to valuers and enhance confidence from users of valuation services this paper investigates the five major elements of DCF methodology, namely cash flows, escalation factors, holding period, terminal value and discount rate.

The impact of tenure type on the desire for retirement village living

In 2005 17.3% of Australians were aged 60 years and older (Australian Bureau of Statistics). A consequence of this aging population is the increased use of self-contained independent living units (SCILU) in Retirement Villages by older Australians. The retirement village sector has thus become a significant sector within the residential property market. In seeking to determine the impact of tenure type on the desirability of RV living this paper first profiles a typical SCILU in Australia, before explaining and examining the various tenure types offered by the market. This paper concludes that the multiplicity of offerings of the SCILU product with respect to tenure type, when combined with deferred management fees and participation in capital gains/losses, may be contributing to a lack of clarity in what the SCILU product entails and the security of investment it offers. This perception is supported by litigated disputes and may be damaging the reputation, ongoing viability and desirability of SCILUs.

Variáveis que influenciam o encerramento de fundos multiestratégia : estudo para o mercado de fundos brasileiro no período de 2008 a 2014

Este trabalho tem por objetivo o estudo sobre o encerramento de fundos de investimento multiestratégia no mercado brasileiro com relação à influência das variáveis: taxas de administração e performance, idade, desempenho, patrimônio e captação líquida. Os fundos selecionados apresentam características de condomínio aberto, e destinados a investidores em geral, com duas janelas de observação, anuais e trimestrais, durante o período de 2008 a 2014. Os estudos apresentados são separados para dois tipos de fundos: com classificação Master e fundos de investimento em cotas (FIC). Para a determinação de desempenho dos fundos utiliza-se duas diferentes métricas, o retorno descontado da taxa DI e o índice de Sharpe. As variáveis foram avaliadas sob dois distintos modelos, o primeiro utilizando os dados das variáveis em valores absolutos e o segundo classificando-as em quintis. Para a obtenção dos resultados os dados foram aplicados por regressões em painel logística, painel e cross section. Os resultados obtidos mostraram a importância do patrimônio e da captação líquida, seguido por idade. Os desempenhos, tanto retorno descontado quanto o índice de Sharpe, apresentaram menor influência, e com pouca significância os custos de administração e de performance. Um segundo resultado apresentado é a diferença da significância das variáveis entre os tipos de fundos Master e FIC, no grupo de fundos Master apenas patrimônio líquido apresentou consistente influência nos eventos de encerramento em janelas anuais. Outra importante constatação é a diferença existente entre janelas trimestrais e anuais, em que grande parte das variáveis estudadas, principalmente as variáveis de desempenho apresentam maior nível de significância nas janelas mais curtas.

Optimal performance fee and flow of funds in asset management contracts

This paper investigates the importance of ow of funds as an implicit incentive in the asset management industry. We build a two-period bi- nomial moral hazard model to explain the trade-o¤s between ow, per- formance and fees where e¤ort depends on the combination of implicit ( ow of funds) and explicit (performance fee) incentives. Two cases are considered. With full commitment, the investor s relevant trade-o¤ is to give up expected return in the second period vis-à-vis to induce e¤ort in the rst period. The more concerned the investor is with today s pay- o¤, the more willing he will be to give up expected return in the second period by penalizing negative excess return in the rst period. Without full commitment, the investor learns some symmetric and imperfect infor- mation about the ability of the manager to obtain positive excess return. In this case, observed returns reveal ability as well as e¤ort choices. We show that powerful implicit incentives may explain the ow-performance relationship with a numerical solution. Besides, risk aversion explains the complementarity between performance fee and ow of funds.

The "human factor" in DFM

With a focus on understanding the overall effect of DFM on human factors aspects, DFM/DFA literature was systematically searched, reviewed and critically assessed. The influence of DFM on work organization is analysed using examples from literature, with the aim of quantifying consequences on work performance, job satisfaction and human work load where possible. It is also shown that job enlargement through DFM tasks increases the workload for the Product Designer, who is on the critical path of the engineering process. Without taking measures to counterbalance this higher workload of the Product Designer, DFM projects in complex engineering environments are likely to fail.

A data mining driven risk profiling method for road asset management

Road surface skid resistance has been shown to have a strong relationship to road crash risk, however, applying the current method of using investigatory levels to identify crash prone roads is problematic as they may fail in identifying risky roads outside of the norm. The proposed method analyses a complex and formerly impenetrable volume of data from roads and crashes using data mining. This method rapidly identifies roads with elevated crash-rate, potentially due to skid resistance deficit, for investigation. A hypothetical skid resistance/crash risk curve is developed for each road segment, driven by the model deployed in a novel regression tree extrapolation method. The method potentially solves the problem of missing skid resistance values which occurs during network-wide crash analysis, and allows risk assessment of the major proportion of roads without skid resistance values.

A critical analysis of business process management education and alignment with industry demand : an Australian perspective

Business Process Management (BPM) is accepted globally as an organizational approach to enhance productivity and drive cost efficiencies. Studies confirm a shortage of BPM skilled professionals with limited opportunities to develop the required BPM expertise. This study investigates this gap starting from a critical analysis of BPM courses offered by Australian universities and training institutions. These courses were analyzed and mapped against a leading BPM capability framework to determine how well current BPM education and training offerings in Australia address the core capabilities required by BPM professionals globally. To determine the BPM skill-sets sought by industry, online recruitment advertisements were collated, analyzed, and mapped against this BPM capability framework. The outcomes provide a detailed overview on the alignment of available BPM education/training and industry demand. These insights are useful for BPM professionals and their employers to build awareness of the BPM capabilities required for a BPM mature organization. Universities and other training institutions will benefit from these results by understanding where demand is, where the gaps are, and what other BPM education providers are supplying. This structured comparison method could continue to provide a common ground for future discussion across university-industry boundaries and continuous alignment of their respective practices.

Acceptability-based QoE management for user-centric mobile video delivery : a field study evaluation

Effective Quality of Experience (QoE) management for mobile video delivery – to optimize overall user experience while adapting to heterogeneous use contexts – is still a big challenge to date. This paper proposes a mobile video delivery system to emphasize the use of acceptability as the main indicator of QoE to manage the end-to-end factors in delivering mobile video services. The first contribution is a novel framework for user-centric mobile video system that is based on acceptability-based QoE (A-QoE) prediction models, which were derived from comprehensive subjective studies. The second contribution is results from a field study that evaluates the user experience of the proposed system during realistic usage circumstances, addressing the impacts of perceived video quality, loading speed, interest in content, viewing locations, network bandwidth, display devices, and different video coding approaches, including region-of-interest (ROI) enhancement and center zooming

From ‘free’ to fee: Acceptability of airline ancillary fees and the effects on customer behavior

Businesses in various consumer service industries have begun to unbundle their service offerings by introducing numerous fees for products and services that were previously provided as “free.” Anecdotal evidence in the media indicates that these fees cause widespread public displeasure, frustration, and outrage. This paper develops a framework of fee acceptability, negative emotions, and dysfunctional customer behavior, which is tested using data from the airline industry. Findings identify the strongest effects on betrayal in the case of baggage fees, followed by charges for comfort. Also, betrayal has a direct effect on complaining, whereas anger mediates the relationship between betrayal and negative word of mouth.

HealthMap: A cluster randomised trial of interactive health plans and self-management support to prevent coronary heart disease in people with HIV

Background The leading causes of morbidity and mortality for people in high-income countries living with HIV are now non-AIDS malignancies, cardiovascular disease and other non-communicable diseases associated with ageing. This protocol describes the trial of HealthMap, a model of care for people with HIV (PWHIV) that includes use of an interactive shared health record and self-management support. The aims of the HealthMap trial are to evaluate engagement of PWHIV and healthcare providers with the model, and its effectiveness for reducing coronary heart disease risk, enhancing self-management, and improving mental health and quality of life of PWHIV. Methods/Design The study is a two-arm cluster randomised trial involving HIV clinical sites in several states in Australia. Doctors will be randomised to the HealthMap model (immediate arm) or to proceed with usual care (deferred arm). People with HIV whose doctors are randomised to the immediate arm receive 1) new opportunities to discuss their health status and goals with their HIV doctor using a HealthMap shared health record; 2) access to their own health record from home; 3) access to health coaching delivered by telephone and online; and 4) access to a peer moderated online group chat programme. Data will be collected from participating PWHIV (n = 710) at baseline, 6 months, and 12 months and from participating doctors (n = 60) at baseline and 12 months. The control arm will be offered the HealthMap intervention at the end of the trial. The primary study outcomes, measured at 12 months, are 1) 10-year risk of non-fatal acute myocardial infarction or coronary heart disease death as estimated by a Framingham Heart Study risk equation; and 2) Positive and Active Engagement in Life Scale from the Health Education Impact Questionnaire (heiQ). Discussion The study will determine the viability and utility of a novel technology-supported model of care for maintaining the health and wellbeing of people with HIV. If shown to be effective, the HealthMap model may provide a generalisable, scalable and sustainable system for supporting the care needs of people with HIV, addressing issues of equity of access. Trial registration Universal Trial Number (UTN) U111111506489; ClinicalTrial.gov Id NCT02178930 submitted 29 June 2014

The role of investor type in the fee structures of pension plans

The final publication is available at Springer via http://dx.doi.org/10.1007/s10693-015-0230-1