VALUATION OF…
Retirement Villages
Life rights or sectional title retirement developments, valued on unit sales, levy structure, and care facility income.
Content status: Methodology and evidence log — Sources, Caselaw and Market Information are added incrementally.
Methodology
Retirement villages combine a residential unit value component (whether sectional title or life rights) with, in many cases, an income-producing care facility component. The residential units are generally valued by Direct Comparison against comparable unit or life-right sales, while any frail care or assisted living facility is valued using the Income Capitalisation or Profits Method.
Applying the Big Five framework, the Income Generating Units are distinguished between independent living units (valued by comparison) and care facility beds (valued on income or trading performance); levy structure, reserve fund adequacy and the developer’s or operator’s covenant are key drivers, as retirement village purchasers are particularly sensitive to ongoing cost certainty.
A component cross-check — Direct Comparison for the residential units and Income Capitalisation or Profits Method for the care facility — should be used to confirm the reasonableness of the combined valuation.
Caselaw
Case law, regulatory rulings and expert-determination disputes relevant to valuing this asset class. Each entry cites its source and summarises the practice implication for valuers — this is not investment, financial, or legal advice.
The Evidence Log is for VDH Members
The Evidence Log for Retirement Villages — sourced sales, disposals and rentals with Valuer’s Lens commentary — is included in VDH Membership: from R125/month for SACPVP candidates and students, R399/month standard. All prices include VAT.
The methodology and case law on this page remain free to read.