Archive | Expansion

Senior Trust fund approves second retirement village loan

The NZX-listed Senior Trust Retirement Village Listed Fund said yesterday it had committed to making a first mortgage advance for expansion of the Palm Grove retirement village at Orewa, owned & operated by David & Verla Dawick.

Trust management company director Scott Lester said Senior Trust Capital Ltd, an associated entity, would provide up to $17 million of debt funding, and the interest rate on the loan would support the fund achieving its targeted distribution rate of 6% before tax.

The first retirement village loan by the newly listed fund was to Whitby Village (2009) Ltd, Wellington. The fund limits loans to a maximum of 60% of the independently determined valuation of the retirement village or aged-care facility.

Attribution: Trust release.

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JLL paper shows retirement villages’ market penetration rising

Research by JLL shows 12 new retirement villages were built in New Zealand last year, and an average 13.6/year would be needed to meet demand over the next 30 years.

A simple demand model, based on Statistics NZ’s February 2015 median population projections, showed a penetration rate of 12% and an average new village size of 150 units, indicating a demand for 13.6 villages/year, economist & research consultant Angela Webster and health & aged care valuer Matt Straka said in JLL’s third annual paper on the sector.

They identified 363 villages operating at the end of 2014, containing 25,272 units. That was up 1124 units (4.7% in a year). Total resident numbers rose by 5567 (20.4%) to 32,854, and the occupancy rate rose from 1.13 to 1.30 residents/unit. The 10,236 retirement village occupants in Auckland made up 31.2% of the total.

An important factor for development of villages is the penetration rate in the age groups 65+ & 75+ – the number of people in those age groups living in a retirement village.

The Bay of Plenty remains the leader – a penetration rate of 5.6% for the younger group and 17.5% for the older. Auckland’s penetration rates at the end of last were 5.8% for the younger group, 14.1% for the older. Nationally, the 2 rates were 5.1% & 12%.

The research showed a 1.5% increase nationally last year in the older age group living in villages, driving up demand forecasts & development potential.

At an overall 12% rate, the researchers estimated from Statistics NZ’s population figures that demand in the older age group would rise by 120% over 20 years, from 38,000 residents in 2018 to 83,750 in 2038. But a 14% penetration rate would add 7600 potential customers in the 75+ group.

The researchers said there was a development pipeline of 11,936 units at the end of last year, 43% to be added to existing village, 57% in new developments, and the equivalent of 80 villages of 150 occupants each.

The Auckland pipeline rose by 1% to 38% of the total – 4560 units.

The sector is dominated by listed companies, with another one, Arvida Group Ltd, joining the NZX in November. It has 800 retirement village units, mostly around Christchurch, and 17 retirement villages & aged-care based facilities.

Ryman Healthcare Ltd was the biggest operator with 4305 units in 27 villages & 17% market share, followed by Metlifecare Ltd (3928 units, 24 villages, 16% market share) and Summerset Group Holdings Ltd (1926 units, 19 villages, 8% market share).

Link: JLL retirement village paper

Attribution: JLL paper.

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Metlifecare buys 5ha of Red Beach golfcourse for new retirement village

Metlifecare Ltd has conditionally bought 5ha of the Peninsula golfcourse for its second retirement village at Red Beach.

The golf club has sold the 45ha Red Beach course for residential subdivision and is moving to a new course at Wainui.

Metlifecare chief executive Alan Edwards said today the company planned a $150 million project on its 5ha, subject to due diligence (including feasibility) and obtaining resource consent, and the vendor obtaining subdivision consent.

Assuming satisfaction of these conditions and of related consents, Mr Edwards said the company expected to have resource consent by December, enabling development of the site to start in 2017. It would be Metlifecare’s 15th Auckland village and 26th nationally.

Metlifecare bought its first Red Beach village, Hibiscus Coast Village, in 2011 from Retirement Villages Group Ltd. It’s on a 6ha site at the corner of Whangaparaoa Rd & Red Beach Rd. The new village would be across the old golfcourse on the Hibiscus Coast Highway, over the road from the 3000-house Millwater subdivision.

A third, 27-unit village on this large block at the start of the Whangaparaoa Peninsula, Northhaven, is owned by Bupa Care Services NZ Ltd, which also owns the adjoining Northhaven Care Home.

Mr Edwards said Metlifecare’s new village would contain a range of one-, 2- & 3-bedroom independent living options & care beds. The community facilities would include a swimming pool, gym, café & bowling green.

“Importantly, the acquisition supports growth in Metlifecare’s development pipeline. The pipeline will comprise in excess of 1350 units & beds, depending on the final design & consenting process for the new Red Beach village.

Attribution: Company release.

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Summerset lifts sales by 48% from year ago

Summerset Group Holdings Ltd lifted December-quarter retirement village sales by 48% over a year earlier, achieving 164 sales of occupation rights.

The 113 new sales in the quarter were up 66% on the previous record of 68 new sales, achieved in the September quarter. The 51 resales were the highest quarterly result in 2014. Unsold resale stock at 31 December remained low at 26 retirement units.

Chief executive Julian Cook said 4 new villages contributed to the new sales results in the second half of 2014, with openings in Karaka, Hobsonville, New Plymouth & the Trentham extension.

“Sales momentum for new retirement units over the first quarter of 2015 remains strong, though we do not expect the sales outcome to be at the levels seen this quarter due to the timing of new village openings.”

Summerset sold a total 458 occupancy rights during the year, 286 new & 172 resales, up from a total 402 in 2013 (228 new, 174 resales).

Summerset is the third largest operator, and second largest developer of retirement villages in New Zealand. It owns 19 villages and has 4 development sites (Casebrook, Ellerslie, Lower Hutt & Wigram).

Attribution: Company release.

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Ryman secures site for Devonport retirement village

Ryman has secured a 4.2ha site owned by Ngati Whatua Orakei on Ngataringa Rd, where it plans to build retirement village which will eventually be home for up to 300 residents.

Ryman managing director Simon Challies said on Friday the site had magnificent views of Auckland harbour & the city, and the village would be a great asset for Devonport’s retirement community.

“There’s no retirement village in Devonport at the moment and all our research shows there is considerable demand for care & retirement living amenities in the area. As well as providing homes for independent residents, the village will also provide resthome, hospital & dementia care.”

Mr Challies picked up the point that other retirement village developers have also seized on recently, that the development will free up hundreds of homes for resale in the area. It’s a point Statistics NZ has reduced emphasis on, by focusing in monthly building consent reports on houses excluding apartments, as if apartments were somehow a non-residential, investment-only category of dwelling.

Chief executive of Ngati Whatua Orakei commercial arm Whai Rawa, Rob Hutchison, said the iwi was excited by the opportunity: “We are really pleased to be working with a major player such as Ryman and we look forward to seeing what is planned for the site.’

“Ngati Whatua Orakei wanted to ensure there was a long-term development at Wakakura, which would provide not only for its people but also create housing opportunities for the community, and we believe this will achieve that.’’

Attribution: Company release.

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Summerset extends landbank to 7 years’ supply, doubles Karaka village

Summerset Group Holdings Ltd has bought 3.2ha adjoining the retirement village it’s building in Karaka, South Auckland, which will almost double the village’s footprint to 6.8ha.

New chief executive Julian Cook told the company’s annual meeting in Wellington on Wednesday the purchase would help the company’s growth as it anticipates bigger deliveries of retirement units, care apartments & care beds at multiple sites.

Summerset will build about 250 retirement units this year, rising to 300 in 2015. It built 209 in 2013.

The company had already extended its landbank last year with purchases at New Plymouth, Lower Hutt, Trentham, Casebrook & Wigram, but Mr Cook said Auckland was a key region for Summerset, which has villages in Warkworth, Manukau, Karaka & Hobsonville, and a greenfield site at Ellerslie. The landbank now stands at more than 2000 retirement units & nearly 600 care beds.

“When these 5 villages are completed, we will have spent more than $500 million in the region and created homes for some 1300 residents.”

Mr Cook said the company’s goal was to be the number one choice in retirement village & aged care services in New Zealand: “Summerset’s early goal of building 20 villages in 20 years is now within our grasp. After 17 years in the business, we have just launched our 18th village, the $120 million Hobsonville village – a truly special location on the waterfront in Auckland. With developments like this, I believe being number one choice is imminently achievable too.”

He said Summerset had been named best retirement village operator in Australasia 4 years running because of its focus on the customer, and the challenge was to maintain that listening approach as the company grew.

“Ultimately we do all of this to create villages that enhance residents’ lives, and I feel deeply about making sure older New Zealanders have an enjoyable retirement in communities built with their care & needs in mind.”

Attribution: Company release.

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Metlifecare starts final stage of Poynton

Metlifecare Ltd has begun construction of the final 58-apartment stage of its $130 million Poynton retirement village in Takapuna.

Chief executive Alan Edwards said yesterday the units would range from 1-3 bedrooms and would follow similar design cues to the existing buildings, with some top-floor apartments offering views over to Rangitoto, towards Lake Pupuke or back towards Glenfield & the Waitakere Ranges.

On completion in June 2015, The Poynton will have 257 apartments, a heated indoor swimming pool, bowling green, croquet lawn, restaurant & café, a wellness centre, snooker room, large activities room, arts & crafts room and a blokes’ shed.

“Stage 1 & 2 independent apartments are close to 100% occupied, with significant interest in stage 3, which is due to be completed next month. Construction firm Haydn & Rollett has been appointed to continue its involvement and complete the final stage.”

Metlifecare has lifted its build rate target to 200+ units/year from the 2015 financial year. Also on the North Shore, it’s begun earthworks for its $160 million Greenwich Gardens village in Unsworth Heights started construction of The Orchards village in Glenfield.

The company operates 23 retirement villages, all in the North Island.

Attribution: Company release.

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Summerset seeks consent for Ellerslie village

Summerset Group Holdings Ltd continues to ramp up its development programme, applying for resource consent for a 252-unit & 79-care bed village on a 3.8ha Ellerslie site. This will  be the company’s 19th village.

Summerset has proposed a 4-storey building containing care apartments & care beds, independent living apartments, administration & communal facilities. In addition, it wants to build singe- & double-storey villas & townhouses, and independent living apartments in 3 buildings of 6 & 7 storeys.

Submissions on the development at 8 Harrison Rd, Mt Wellington, close with Auckland Council on 16 December. The site is just off the Ellerslie-Panmure Highway, midway between the Southern Motorway interchange & Panmure.

Summerset was granted resource consent on 1 November for the initial phase of a $70 million retirement village at Karaka, and followed that up on 5 November with Environment Court approval for its $120 million village at Hobsonville.

The company lifted its build rate target a year ago, when it bought the Ellerslie site, to 200 units this year and to 300 units/year by the end of the 2015 financial year.

Attribution: Consent notice.

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Unsworth Heights consent takes Metlifecare to 4 villages on Shore & Coast

Metlifecare Ltd has been granted resource consent for its 14th retirement village in Auckland and fourth on the North Shore & Hibiscus Coast, Greenwich Gardens at 5 Greenwich Way, Unsworth Heights.

When completed, Greenwich Gardens will have 75 villas, 207 apartments, 28 serviced apartments for those with higher care needs, and a 61-bed care facility.

Chief executive & managing director Alan Edwards expects construction of the $140 million village to start in mid-2014. Amenities will include a bowling green, swimming pool, spa pool, gym & village café.

Mr Edwards said the Greenwich Gardens consent meant Metlifecare had more than 85% of its 1000 unit & bed development pipeline resource-consented.

The company’s other villages on the Shore & Hibiscus Coast are The Poynton in Takapuna, Hibiscus Coast Village in Red Beach and The Orchards in Glenfield, which has also recently received resource consent.

“The North Shore has a significant number of people aged over 65 years and Metlifecare is providing a number of different retirement lifestyle options for these people across the North Shore. This new village will provide the Unsworth Heights & surrounding communities with a desirable & high quality retirement living option in their area.”

Metlifecare owns & operates 23 retirement villages around the North Island.

Attribution: Company release.

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Ryman secures 4 new retirement village sites

Ryman Healthcare Ltd has secured 4 new retirement village sites in New Zealand, boosting its landbank from 3 to 4 years’ stock.

Ryman chairman David Kerr told the annual meeting yesterday the sites’ locations would be announced over the next 3-4 months as the contracts are confirmed.

For Auckland, the company said in May it had bought a site in Birkenhead and it’s about to start construction on a new village in Howick. In Wellington, a new village for Petone is in the planning phase. Construction is well advanced on the first Melbourne village, which is on schedule to open in April 2014.

Ryman reported an underlying profit of $100 million for the last financial year, up 19% on the previous year. For the new financial year, Dr Kerr said trading was in line with expectations, which were for further growth.

Ryman has over 7000 residents in 26 villages it owns in New Zealand.

Attribution: Company release.

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