Leaky building issues are not unique to listed retirement business Metlifecare which is "on top of the issues" according to one expert.
Chris Gaskin of Devon Funds said issues at four Metlifecare villages - three in Auckland and one north of Wellington - were well flagged and investors knew.
"This is not unique to the industry. Ryman Healthcare had to do a major overhaul of the Grace Joel village after discovering leaky buildings a few years ago," Gaskin said.
He was commenting after Metlifecare said it was is ascertaining if units and buildings in its other 20 villages need fixing, asside from the four where issues are known.
Glen Sowry, chief executive of the company with a $1.1 billion market capitalisation, disclosed issues at three Auckland villages and one north of Wellington but said it was "reviewing" all villages.
He told of problems at Pinesong where one 19-unit building is being demolished, Waitakere Gardens where up to 183 apartments could be affected, Dannemora Gardens where 16 balconies are being fixed and Coastal Villas on the Kapiti Coast where a reclad programme has begun.
But Gaskin said the issues were well flagged.
"The company talked pretty extensively at the investor day about the issues/potential for leaky buildings in the portfolio. The Pinesong village maintenance/refurb basically allowed them to increase the size (and more importantly from an investment point of view, yield) of the village," Gaskin said.
Waitakere Gardens had been built around the time that building practices were not that good right across the residential construction industry.
"My understanding is that there are issues around water pooling on the balconys and this might be an issue with the cladding. I think Met are right on top of the issues," Gaskin said.
"Given the size of their portfolios you would imagine the odd issue from time to time for Ryman and Met, but from a value perspective, [this is] not material," he said.
Sowry said more.
Legal action is being considered and some elderly residents have had to be evacuated from their homes.
"The Manukau Building at Pinesong is being demolished and redeveloped. The rebuilt apartment building will have 48 apartments. The surveys to date at Waitakere Gardens have identified the blocks we need to focus further investigation on - these total 183 apartments. The further investigation we're undertaking will allow us to refine this number in terms of the effect on each individual apartment and resident," Sowry told the Herald.
"We are progressively reviewing all of our villages to identify areas of potential design risk and where remediation work may be required. We have a programme of work to remediate a small number of balconies (16) in one small part of our Dannemora Garden's village. We have also commenced work on a reclad programme with a number of villas within our Coastal Villas village on the Kapiti Coast," Sowry said.
Metlifecare is second only to Ryman in terms of size. It has 4000 units in 24 villages which are home to more than 5000 residents who don't own the properties but instead have bought licenses to occupy.
Asked about legal action on the Pinesong and Waitakere villages, Sowry said: "We are currently identifying the specific issues and after further, more detailed investigation, we will have clear options for possible remedies."
The scope of work at Waitakere Gardens is not yet known: "Visual and limited invasive surveys have been conducted on balconies across the village. We are using the results of these surveys to target further investigation. This will enable us to determine exactly what the issues are and quantify the investment required."
Residents have had to leave their homes.
"All the Manukau building residents at Pinesong village have moved into other apartments and villas within the village. We worked individually with each resident to find the most suitable accommodation option for them. Some have moved permanently into other apartments and villas at their request, and some are excited about returning to a brand new apartment building when it's completed. Metlifecare covered all the costs of moving, storage, insurances and transfer of utilities etc," said Sowry, formerly of Housing NZ Corporation and only recently of Metlifecare.
"The further investigation we're undertaking at Waitakere Gardens will allow us to scope the optimum remedies. As we know more we will consult with our residents and decide the best course of action for everyone involved. This may involve alternative accommodation but at this stage we could not say if this will be required," he said.