Property editor of the NZ Herald

Boom time for golden-oldies sector

Trio of NZX-listed retirement companies building new facilities to meet demand of ageing population.

An artist's impression of The Poynton, one of the retirement village projects on the North Shore.
An artist's impression of The Poynton, one of the retirement village projects on the North Shore.

Three NZX-listed retirement businesses are in a big growth phase, with more than 1000 new units planned.

The North Shore and its rapidly ageing population is a magnet - Ryman has plans for a new Birkenhead aged-care village and Metlifecare is expanding at Takapuna with plans for new villages at Glenfield and Unsworth Heights.

Metlifecare is adding 55 new units at Takapuna where building work began six years ago and where many people have lived for the last three years.

Alan Edwards, Metlifecare chief executive and managing director, said two cranes are at The Poynton on the corner of Shakespeare Rd and Taharoto Rd where building firm Hayden and Rollett won the main contract for the phase three expansion.

Alan Edwards.
Alan Edwards.

The Poynton, by North Shore Hospital, opened in June 2009 with 144 units built in stage one and two. So the latest work is the third phase. A fourth stage, with a further 62 units, is due to be built next year.

The latest 55 units include six much bigger places or what the firm terms "mega" apartments - 133sq m two and three-bedroom places, each with two balconies, selling for $950,000.

One-bedroom places in the 55 new units are for sale from $495,000 to $575,000, two-bedrooms from $645,000 to $715,000, and three-bedrooms from $845,000 to $950,000. Sales staff said 17 of the new 55 had been sold off the plans and interest was high.

Building work at the new wing started in January and is now up to roof level. Edwards said the new places were due to be finished next April, then stage four would start.

Planning for two other new Metlifecare North Shore villages is well under way.

"We are continuing to progress plans to develop our new full continuum of care villages in Glenfield and Unsworth Heights and are seeking resource consent," Edwards said.

Metlifecare has declared 95 per cent occupancy of its stage one and two of The Poynton.

Not all has gone smoothly in the sector: arguments about fees, resale prices and standard of buildings and care have arisen at villages around New Zealand and the sector is overseen by retirement commissioner Diane Maxwell, working for the Commission for Financial Literacy and Retirement Income.

The commissioner's website displays the process for taking a complaint, and the sector is governed by the Retirement Villages Act 2003, regulations and the code of practice.

In June, Metlifecare upgraded its operating cash flow guidance, saying an earlier forecast of $60.7 million would be exceeded. Its current forecast estimate is $70 million, resulting partly from the strength of Auckland's rocketing property market which the company said has assisted it to generate greater volumes of sales, resales and increased margins.

More than 1000 new retirement houses and units are being planned, as New Zealand's population of 65-year-olds increases by about 20,000 people annually.

So the NZX-listed businesses plan to expand to cater for the golden oldies boom.

Metlifecare's interim report out earlier this year showed it has a development and construction pipeline for 843 new places while Summerset's interim report showed it was building at least 300 new places annually.

The mainly North Island-based Summerset is planning a new-build rate of "at least 200 retirement units" this year.

Summerset is developing in Warkworth, Katikati, Hamilton, Hastings Nelson and Dunedin and it wants to build at Auckland's Hobsonville and Karaka.

The number of people aged 75 years and over is projected to increase from 261,000 to 515,000 by 2031, Summerset says, while 65-years plus will grow from 586,000 to 1,072,000.

"The percentage of New Zealanders 65 years and over living in a retirement village has grown from 3 per cent in 1998 to 5 per cent today. For those aged 75 years and over, this has grown from 5 per cent to 9 per cent. If these percentages stay the same, New Zealand will need more than 21,000 extra retirement units by 2031," Summerset's annual report said. "If these percentages increase by another 2 per cent, the country will need up to 30,000 new retirement units by 2031."

Ryman shareholders at last month's AGM heard how it had bought a Birkenhead site on the North Shore and how the locations of the four new sites would be announced over the next three to four months.

Planning approval has been granted to Ryman for a new Howick village and further new villages are planned for Petone and Birkenhead.

Ryman reported an underlying profit of $100 million for the last financial year, up 19 per cent on the prior year.

Taking care to expand

* 23 retirement villages.
* 3812 villas and apartments.
* 359 beds in aged-care facilities.
* Has 4700 residents.

* 16 retirement villages.
* 1646 retirement village units.
* 327 beds in aged-care facilities.
* Has more than 2000 residents.

Ryman Healthcare
* 26 retirement villages.
* Has about 7000 residents.
* Expanded into Australia.
* New villages planned throughout NZ.

Sources: Metlifecare, Summerset, Ryman.

- NZ Herald

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