The development of two retirement villages on Auckland’s North Shore by business partners David McFarlane and Scott Vernon has turned into a real estate gold mine worth almost $200 million.
The first project involved the aggregation of 8ha of land at a cost of $4.3m in Albany’s Oteha Valley, which eventually became the site for the Fairview Lifestyle Village. Opened in 2004, Fairview consists of 131 villas, four townhouses and 62 apartments, plus a 47-bed care home and hospital, which has a collective rateable value of around $93m.
The second project, the Settlers Lifestyle Village, is set in 5ha of landscaped gardens on the Albany Highway and consists of 246 apartments and townhouses. Officially opened by then-prime minister John Key in 2013, the initial outlay was $7m for the land plus another $70m to $75m for the construction – resulting in a site now valued at just over $100m.
According to Companies Office records, both properties are owned by the Premier Lifestyle Villages Group, which is controlled by McFarlane and Vernon, and their respective trustees, in a 50/50 partnership.
In a rare media interview when Fairview opened, Vernon was reported as saying that people thought they were crazy to build on the Oteha Valley land so close to the motorway “but that’s been a huge asset” because of access to the site. Stating that it was a “very stressful” project, he said: “David and I have been hands-on for four-and-a-half years, seven days a week.”
Both villages operate under the “right to occupy” business model which entitles residents to live there for life, but does not give them ownership of the property. Prices at Fairview range from $530,000 for a one-bed apartment to $1.2m for a three-bedroom townhouse. The more spacious Settlers commands $638,000 for a one-bed apartment and up to $1.2m for a three-bedroom townhouse.
Disputes between village owners and residents wanting to leave are rare, and when one former Fairview resident went public in 2014, Vernon reportedly said in a statement that the claims were “patently unreasonable”’ and that “we are deeply disturbed that someone would unfairly impugn our goodwill and reputation in the media in this way.”
Although Vernon was a relative newcomer to the retirement sector, McFarlane and his partner, Stephanie Banks, were the directors and owners of the Edmonton Meadows Rest Home in Henderson, which was sold to Chinese interests for $6m in 2016. In addition to their stake in the villages, McFarlane and Banks have a $15m portfolio of residential properties including the family home in Milford. There is also a small shareholding in the listed Cooks Global Foods business.
Having made an initial fortune in the rag trade, Vernon has amassed a modest real estate portfolio worth $21m, which consists mostly of North Shore properties and includes the $5m family home one one of Takapuna’s premium streets, Minnehaha Avenue.