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Concession period determination for PPP retirement village

Liu, Shijing, Jin, Hongyu, Xie, Benzheng, Liu, Chunlu and Mills, Anthony 2018, Concession period determination for PPP retirement village, International journal of strategic property management, vol. 22, no. 5, pp. 424-435, doi: 10.3846/ijspm.2018.5476.

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Title Concession period determination for PPP retirement village
Author(s) Liu, Shijing
Jin, Hongyu
Xie, Benzheng
Liu, ChunluORCID iD for Liu, Chunlu orcid.org/0000-0003-1144-4355
Mills, AnthonyORCID iD for Mills, Anthony orcid.org/0000-0002-2223-1550
Journal name International journal of strategic property management
Volume number 22
Issue number 5
Start page 424
End page 435
Total pages 12
Publisher Vilnius Gediminas Technical University Press
Place of publication Vilnius, Lithuania
Publication date 2018
ISSN 1648-715X
1648-9179
Keyword(s) concession period
option to defer
public–private partnership
real option
retirement village
Summary Demand for the construction of retirement villages is increasing with the worldwide growth in ageing populations. However, the development of retirement villages can be impeded by many factors, such as limited available land and high investment costs. Public–private partnership (PPP) as an alternative financing mechanism has been widely applied in the construction of public infrastructure projects and may provide new funding sources for building retirement villages. By applying PPP to the construction of retirement villages, the independent living requirements of seniors can be met and the financial difficulty of the construction of retirement villages can be resolved. Similar to other PPP projects, when retirement villages are constructed under a PPP process, the concession period is a key decision variable in relation to the success of the project. The concession period is stated in the project contract between the government and private investors, and stipulates the date when the project ownership and operation are transferred from the private investor back to the government. The government should take detailed information into consideration at the initial project stage when determining the concession period. This paper proposes PPP as a new procurement method to be applied to the construction of rental retirement villages and develops a concession period determination process for PPP retirement village projects with consideration of real options, focusing on the option to defer. An empirical example with alternative scales, which is developed from an existing retirement village in Geelong, Australia, is used to numerically verify the process and the impacts of key variables on the concession period. The determination process provides an alternative tool for governments to design the concession period before the tendering stage and will benefit the development of industries associated with services for the ageing population. This process can also be applied to the construction of other financially non-viable PPP projects such as social housing.
Language eng
DOI 10.3846/ijspm.2018.5476
HERDC Research category C1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2018 The Authors
Free to Read? Yes
Use Rights Creative Commons Attribution licence
Persistent URL http://hdl.handle.net/10536/DRO/DU:30114712

Document type: Journal Article
Collections: School of Architecture and Built Environment
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Every reasonable effort has been made to ensure that permission has been obtained for items included in DRO. If you believe that your rights have been infringed by this repository, please contact drosupport@deakin.edu.au.