Private Equity-Backed Auria Launches $300M Senior Living Pipeline in South Africa

One developer is hoping to meet the growing demand for senior housing in South Africa with a $300 million development pipeline and a well-established investor. That investor is Stockdale Street, a private equity fund affiliated with the Oppenheimer family, previously the managing shareholder of De Beers, the world’s largest diamond company.

“They are patient, long-term investors with an intimate understanding of doing business in Africa and has committed significant capital to the future growth of the Auria platform,” Barry Kaganson, founder and CEO of Auria Senior Living, told Senior Housing News.

Founded in 2017, Auria Senior Living has two luxury senior living communities — San Sereno in Bryanston and Royal Joburg in Sandringham, a suburb of Johannesburg — and has a development pipeline of four more communities, totaling 1,500 units, Kaganson said.

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Kaganson’s real estate background is rooted in property management and student housing development. He co-founded and ran Respublica Student Living in 2009 and grew the company into South Africa’s largest student housing developer when it was acquired by one of South Africa’s largest real estate investment trusts (REIT) in 2014.

“It was around this time that I saw an opportunity in the senior living industry,” Kaganson said.

Kaganson studied the senior housing markets in the U.S., Australia and New Zealand, and entered senior living with the development of Royal Joburg, at a cost of $30 million U.S.

South Africa, like other countries around the planet, is grappling with how to care for an aging population. Its over-60 population is expected to double by 2050 and comprise 15.4% of the total population, according to the World Health Organization’s World Report on Ageing and Health.

This interview has been edited for clarity and length.

What are Auria’s operating and development strategies?

Our mission is simple and clear: we ensure that our residents enjoy their best quality of life.  every single day.

Our ownership model is a “Life Occupancy Right” with a deferred management fee payable on exit. This is similar to the Australian/New Zealand model, and has been reasonably prevalent in South Africa for a number of years. We believe this model best aligns the interests of the owner-operator and the resident, for the long term.

Most of our future expansion will be greenfield opportunities. This is very exciting as it gives us a blank canvas to create best of breed CCRCs which incorporate leading global best practice. This is a first in South Africa, and our product has been incredibly well received by the public here. We take great care in the design and operation of our communities. We employ our own staff across all service areas, as we believe this is the best way to ensure that our residents experience is to our standards, and within our control.

Auria Senior Living
Residents at Auria San Sereno, playing bocce.

What societal and population factors are driving senior living demand in South Africa?

Like anywhere in the world, South Africa has an aging population who require appropriately suited living environments and, in many instances, some form of specialized care either immediately or in the future. A further dynamic in South Africa (not necessarily in other countries in the world) is unfortunately a high crime rate — this is an added factor that causes older people to seek the more secure and controlled environment that our communities offer. This in itself offers significant peace of mind for our residents and their families.

How does providing health care and health insurance differ in South Africa, and how does this impact Auria’s business model?

The South African model is largely a private pay model — there is little in the senior living industry that is funded either by the government or by health insurers — so our residents are funding their living and care costs from their own resources.

What trends from U.S. and European senior living are Auria monitoring for possible inclusion into its development and operational models?

We realized that location is pivotal to the success of these communities — we therefore need to target infill sites which are more suited to high-rise developments rather than the traditional estate-style communities. In terms of amenities, our barista coffee shops and cinemas are hugely popular with residents, as are numerous dining options available on a daily basis, comprising fixed and a-la-carte menu options as well as smaller café-style meals.

On the care side, we focus on giving residents choice in how care services are provided to them, either in our assisted living facilities on site or in their homes. We also cater for dedicated dementia care in our communities — this is a focus of ours right now.

Our continuum of care philosophy dictates that we need to provide all lifestyle and care needs in a single environment, so that our residents never have to make another move from our communities.

What does Auria’s pipeline look like?

We have a varied pipeline around South Africa — some acquisitions of existing facilities, but most are greenfield opportunities. The latter comprise some exciting sites, situated on popular golf courses within established residential suburbs and some in coastal cities with extensive sea views and beach club access. We also have sites in our country’s wine country which will be a really unique living environment.

All in all, our pipeline is around 1,500 units and growing, we are very excited about this.