Archive | Summerset

Summerset buys at Porirua for 5th Wellington village

Retirement village developer Summerset Group Holdings Ltd said today it had bought a 6ha site, price undisclosed, in the Kenepuru Landing development at Porirua for its 5th village in the Wellington region.

Kenepuru Landing is a joint residential housing project between developer Carrus Corp Ltd & local iwi Ngati Toa.

Summerset chief executive Julian Cook said the proposed village on Bluff Rd would have over 290 homes, including 2- & 3-bedroom villas & apartments, one-bedroom serviced apartments and resthome & hospital care. The village would also include Summerset’s memory care centre concept, offering 20 one-bedroom apartments in a safe environment for people with dementia.

The company expects to build 450 retirement units nationally this year.

Attribution: Company release.

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Summerset lifts profit by 78% – or 45% minus revaluations

Retirement village operator Summerset Group Holdings Ltd increased June half-year net profit after tax by 78% to $90.3 million ($50.6 million in the June 2016 half).

Take away the unrealised valuation gains – $87.1 million for the latest period, $50.2 million last year – and add in realised gains on resales, development margin and a small amount of deferred tax credit – and the underling profit is up 45% to $35.7 million ($24.7 million).

That sounds less glaringly over the top, but those valuation gains do have a use. They’re on the balance sheet and they add to the company’s ability to use money.

As with all the listed retirement village companies, Summerset’s occupants buy a licence to occupy, not a title. That remains with the company.

Summerset’s investment property portfolio rose by $390 million (28%) from a year ago, from $1.416 billion to $1.806 billion, and total assets rose $411 million (27%) to $1.932 billion. Residents’ loans, on the debit side, rose 22% to $867 million ($711 million). The company’s net assets were up 40% to $627.6 million ($448.7 million).

The embedded value of the company’s stock of units rose 57% to $418.9 million ($267.6 million), or $140,000/unit, after setting $274.2 million of resale gains against $144.8 million of deferred management fees.

Net tangible assets/share rose 39% to 285.7c (206.1c).

Summerset chief executive Julian Cook said the company experienced a strong 6-month period, with good sales levels and a record development margin of 28%: “This is particularly pleasing. We have previously signalled we are seeing cost pressure in the Auckland construction market, and despite this we have delivered our strongest development margin for any 6-month period ever. This has been driven by our in-house construction model and strong demand for our homes.”

The company delivered 171 homes and lifted the combined new sales & resales by 6%. Mr Cook said the development pipeline was weighted towards the second half of the year: “We are on track to build about 450 retirement units across our villages in 2017 and expect new sales levels over each half of the year to reflect this.”

Summerset’s total current land bank represents about 2670 retirement homes and 412 care beds, inclusive of recently purchased land in Avonhead, Christchurch. This is a total of about 6 years’ supply at Summerset’s current build rate.

Attribution: Company release.

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Summerset buys third Christchurch site

Summerset Group Holdings Ltd said today it had bought a 9.5ha property in the suburb of Avonhead for its third Christchurch retirement village & fourth dementia care centre.

Chief executive Julian Cook said the company intended to build 240 homes on the Hawthornden Rd property, near the Russley golfcourse & other recreational areas.

It will have 2- & 3-bedroom villas, apartments & serviced apartments, rest-home & hospital care and a memory care centre – a new dementia care concept in New Zealand offering residents living with dementia their own one-bedroom apartment in a secure environment.

Mr Cook said: “We are the first in New Zealand to launch this style of apartment living for those living with dementia. Our first memory care centre opened in Levin last November and has been warmly received by residents & their families.

“We are building 2 further memory care centres in Rototuna (Hamilton) & Casebrook (Christchurch). These centres provide residents with the dignity & respect of having their own home within a secure centre, which is purpose-designed for their needs. We will bring this latest thinking in memory care centres to our Avonhead development.”

Mr Cook said Summerset’s first Christchurch village, at Wigram, was one of its fastest selling: “We are working on the final villa stages now and these will be complete next year. This will mark a 3-year selldown for the village. We are also seeing strong inquiry for our Casebrook village, currently under construction.”

Summerset expects to build 450 retirement units this year. Avonhead takes its greenfield sites to 7. The others are Casebrook, Richmond (Nelson), Rototuna (Hamilton), St Johns & Parnell (Auckland) & Lower Hutt.

Attribution: Company release.

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Summerset sales dip for quarter but up for half-year

Retirement village developer, owner & operator Summerset Group Holdings Ltd sold or resold occupation rights to 152 units in the June quarter, down from both the first quarter this year & second quarter last year.

But for the half-year, its total 323 sales were 6% ahead of the 2016 total of 306.

Summerset sold rights to 82 new units in the second quarter of this year (97 in the first quarter, 108 in the second quarter of 2016) and made 70 resales (74, 77).

Chief executive Julian Cook said: “New sales were driven by delivery timings for newly constructed retirement units, with 171 built over the first half of 2017 compared to new sales of 179. Resales continue to track well, with available homes being sold quickly.

“We are on track to deliver about 450 retirement units across our villages in 2017, with the development pipeline weighted towards the second half of the year. We expect new sales levels over each half of the year to reflect this, as signalled in our construction programme earlier this year.

“We continue to see strong demand for our retirement units, and presales levels & settlement rates both continue to track positively.”

Attribution: Company release.

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Summerset sees bonds as helpful diversification

Summerset Group Holdings Ltd set an interest rate last week of 4.78%/year for its $100 million issue of secured, unsubordinated fixed-rate bonds. The issue includes $25 million of oversubscriptions. There’s no public pool.

The offer closes on Thursday 6 July and allotment will be on Tuesday 11 July. The 6-year bonds have a maturity date of 11 July 2023.

Summerset chair Rob Campbell said the transaction was a significant milestone for Summerset, being its first domestic regulated bond issue and the first for the New Zealand retirement village & aged care sector: “The proceeds will be used to reduce existing bank debt to $211 million, leaving significant headroom within the $600 million facility.

“This provides further diversification of funding sources and tenor for the group and provides strong levels of certainty for future years for funding. The bonds complement existing syndicated loan facilities which were refinanced in March.”

Attribution: Company release.

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Summerset sets indicative margin for bonds

Retirement village developer & operator Summerset Group Holdings Ltd has set the indicative margin range above the 6-year swap rate for its $100 million bond issue at 1.85-2%/year, subject to a minimum interest rate of 4.7%/year.

Summerset is offering $75 million of bonds, with the ability to accept up to $25 million of oversubscriptions. The interest rate will be decided after the bookbuild process expected to be completed on Tuesday 14 June.

The offer is expected to open on 15 June and close on 6 July. There’s no public pool.

Attribution: Company release.

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Summerset announces $100 million bond offer

Summerset Group Holdings Ltd lodged its product disclosure statement today for an offer of $100 million of 6-year bonds.

The retirement village developer & operator is offering up to $75 million of unsubordinated fixed-rate bonds, with the ability to accept up to $25 million in oversubscriptions, to New Zealand institutional & retail investors. There’s no public pool. Summerset will provide a guarantee & security package with the bonds.

It expects the offer to open on Thursday 15 June and close on Thursday 6 July.

Summerset has appointed ANZ Bank NZ Ltd as arranger, and ANZ, Deutsche Craigs Ltd, First NZ Capital Securities Ltd & Forsyth Barr Ltd as joint lead managers.

Link: Summerset bond product disclosure statement

Attribution: Company release.

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Summerset considers Australia & widening services

Retirement village company Summerset Group Holdings Ltd chair Rob Campbell told the company’s annual meeting yesterday expansion into Australia was being considered but was not imminent.

Summerset has 21 villages in New Zealand providing a range of living options & care services to 4200 residents, and has 6 sites for development – Richmond, Rototuna, Casebrook & Lower Hutt and 2 in Auckland, in St Johns & Parnell.

At the end of 2016, the company’s landbank represented 2609 retirement units & 366 care beds – about 6 years’ supply based on Summerset’s intended build programme for retirement units in 2017 of about 450 units.

Mr Campbell added: “ It is our intention to add further sites in the main centres and in provincial locations where we will develop villages on our current model, evolving over time to meet the demands of the market. We face strong ongoing demand.

“In addition to this what might be described as Summerset ‘business as usual’, we are contemplating how the core model might expand over time. This contemplation includes the possibility of expansion into Australia. This requires the careful & extended research & consideration which it is getting. No decisions have been made in this respect, nor are they imminent.

“The second area of forward thinking is around the wider range of services which we could provide around retirement living & aged care. Again, decisions are neither made nor imminent but we are undertaking work on the options, the demand & commercial viability of a wider range of services.

Attribution: Annual meeting speechnotes.

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Summerset lifts sales

Retirement village developer, owner & operator Summerset Group Holdings Ltd lifted sales & resales of occupancy rights by 41% in the first quarter of the year, compared to the March 2016 quarter.

Chief executive Julian Cook said on Wednesday the 171 sales for the quarter were up by 50 on the figure a year ago – 97 new sales (75 a year ago), 74 resales (46).

Summerset recently completed a $600 million syndicated loan facility refinance to allow the group to continue to fund growth.

“The outlook for the balance of the year looks positive, with good presale levels on projects delivering through this year. We note that our construction programme sees retirement unit deliveries weighted to the second half of the year and we expect the split of new sales across the year to be in line with this.”

Attribution: Company release.

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Summerset profit soars again and build rate lifted

Summerset Group Holdings Ltd improved its underlying profit by 50% in 2016 to $56.6 million. Chief executive Julian Cook said growth on this measure had averaged 48%/year since the company listed in November 2011.


  • Net profit after tax up 73% to $145.5 million
  • $200 million invested into new & existing villages
  • Total assets up 25% to $1.7 billion
  • 658 total sales of occupation rights, up 14%
  • 414 new sales of occupation rights, up 24%
  • 409 new retirement units delivered, up 35%
  • Final dividend of 5.1c/share
  • Development margin of 22.2%, up from 20.0%

Mr Cook said the build rate target had been increased for 2017 from 400 last year to 450.
The company has over 4200 residents living at its 21 villages, 700 more than a year ago: “During 2016 we accomplished a number of milestones, including 658 new sales & resales of occupation rights, a 14% increase on the year before, and it is the sixth year in a row that we have increased our occupation rights sales.

“We also now have more than 1000 staff across the country, up 200 on the same time last year.

“The delivery of a record 409 retirement units across the country was in line with our 2016 build rate target of 400. We also delivered 121 care beds in 2016, bringing the number of care beds across our villages to 748.”

At the end of 2016, Summerset’s total land bank represented 2609 retirement units & 366 care beds, a total of around 6 years’ supply.


Attribution: Company release.

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