Penny Hughes is the Chairman of Riverstone, a group that is changing the senior living sector. Samantha Welsh speaks to Hughes about why Riverstone is different from other retirement home models.
LUX: You have a track record of leading world class consumer brands, across diverse industries, Coca Cola and Aston Martin, for example. What qualities have you come to admire in leaders?
Penny Hughes: I strongly admire tenacity, drive and enthusiasm, but most of all I admire leaders with the ability to evolve and overcome change. At the start of my career I had no female role models. As a leader, and through experience, I have moved to being a positive campaigner for diversity, taking decisions that result in enhanced diversity & inclusion.
LUX: What has driven the transformation of the senior living sector from Cinderella to a sweet spot in the alternative property assets class?
Penny Hughes: Internationally, 5-7% of the market is focused on later living, while in the UK it is less than 1%. It’s not just a new asset class, it’s an undiscovered one. We are getting older; populations are growing and we are living longer. Research indicates that over 65s want to downsize, they want to release equity to enjoy life, and, most importantly, age in the places they love. Growth in this sector is adding value in creating options for the over 65s to ensure they can live the life they want to live.
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LUX: Are institutions also meeting ESG targets through investing in later living?
Penny Hughes: Many institutions do not place enough emphasis on the ‘Social’. The pandemic spurred a renewed focus on community living. Already Riverstone is in discussions with local schools to provide engagement for our residents – such as reading clubs with school children – and learning opportunities for the next generation.
LUX: What are the public policy gains offered by the retirement home model?
Penny Hughes: Policy makers are opening their eyes to how bespoke later living schemes can help alleviate pressures on the NHS and the social care system. Our approach aims to focus on prevention rather than cure, yet we are also able to offer on-site GP consultations and prescriptions to residents’ doors should our residents wish to access this service.
LUX: Has the pandemic offered new opportunities and ways of repurposing vacant property?
Penny Hughes: The pandemic has placed a heightened importance on our homes; there is a clear focus on what we need and what we don’t. For many of our future residents, they are at the stage in their life where they want to downsize, release equity, and live within a community that encourages healthy and active lifestyles. This further benefits the wider community as it unlocks appropriate and much needed housing for all generations.
LUX: Given the governments targets for delivering new homes, how do you compete with residential developers?
Penny Hughes: We’re living longer. By 2030, one in five people in the UK (21.8%) will be aged 65 or over (Age UK). The Riverstone offering, in prime central London, is meeting the demand for home ownership among the over 65s, which research indicates remains high, whilst also offering residents their own slice of luxury.
LUX: Your communities are disruptors, you celebrate metropolitan living, are you the new place-makers?
Penny Hughes: Metropolitan living is captivating. There is always something exciting going on, and most definitely keeps people active. I wouldn’t say we are place-makers as we choose vibrant established locations, however, we provide a wealth of private amenities and outstanding facilities, such as our gardens, curated by Chelsea Flower Show landscape and garden designer Andy Sturgeon, and our restaurants for the whole community
LUX: ‘Live the life you want’ – why are the world’s Baby Boomers so demanding and what do they want?
Penny Hughes: We are creating a place that is welcoming and accessible, not too formal. We are also creating The Riverstone Club, which will comprise state-of-the-art wellness spaces including a pool, spa, treatment rooms and yoga studio, alongside cinema, library, espresso bar, and business suites for personal and private affairs. Equally we don’t want people to feel intimidated if they want their privacy, so they can enjoy the chef’s table, or dine with friends.
LUX: What differentiates the Riverstone brand from other equally recognisable names?
Penny Hughes: This is a new asset class for prime central London, there aren’t many operators within this sector. Our competitors are either operating through rental models, or locations that appeal to a different audience.
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LUX: How does the apartment ownership structure assist in managing wealth transfer?
Penny Hughes: 75% of our future residents currently own a large home. Riverstone’s model presents an option to downsize and free up equity. Each apartment is sold with a 150-year lease. A monthly fixed membership fee is charged during residents’ occupation, and this covers staffing, repairs, security, maintenance and general operating costs. Additional care and other services are charged separately on a pay-as-you-go basis. When looking to sell a Riverstone apartment a deferred fee (a percentage of the sale price) is payable when the property is sold. This management fee is a new model for the UK, however widely used in New Zealand and Australia.
LUX: What is the long term strategy for the group?
Penny Hughes: We are continuing to explore new central London sites as part of our plan to deliver a £3 billion portfolio. We have been very pleased with the reception for our Kensington and Fulham developments after they launched recently.
LUX: And can you share any well-being tips with us?
Penny Hughes: We should all – at every age – dedicate quality time to our own health and well-being. My passion in life is having a purpose and making a difference. I don’t do well sitting at home! Activities such as going to the gym, or paddle boarding on the river help give me space to unwind, whilst also being a fun form of exercise.”
Find out more: riverstoneliving.com