Ryman Healthcare selling former Victoria University Karori campus after company profit plummets

The former Victoria Univeristy Karori campus on Donald St in Wellington. Photo / Google Maps

Ryman Healthcare is selling land in Wellington that was previously the subject of a bitter dispute between Victoria University and the Ministry of Education.

The former teachers’ college site in Karori was transferred from the ministry to the university for just $10 in 2014. The university then deemed it surplus to requirements in 2016 and sold it to Ryman Healthcare for $28 million.

The Donald St site was set to be transformed into a retirement village with hospital and dementia care available.

However, Ryman Healthcare national sales manager Simon Jantke emailed interested stakeholders this afternoon, informing them the company had decided to put the site on the market.

“Since purchasing it, challenging market conditions and construction cost inflation have resulted in this site no longer being suitable for our planned development,” Jantke said in the email.

“I realise this news will be disappointing.”

The Herald has contacted Ryman Healthcare for further comment.

Locals were devastated when the university decided the site was surplus to requirements because the community relied on facilities there including a gymnasium, tennis and netball courts and a dance studio.

The ministry had hoped to buy some of the land but negotiations broke down with the university.

At one point, the ministry understood it was exclusively negotiating for land under the Public Works Act while the university thought that process had finished, and wanted to list the site on the open market.

The site was eventually sold to Ryman Healthcare in 2017.

Ryman Healthcare’s decision to put the land back on the market comes after the company published its full-year result to March 31, 2024. It increased total revenue 18 per cent to make $689.9 million but reported net profit after tax plummeted from $257.8m to just $4.8m.

The company, which is New Zealand’s largest listed retirement owner-operator, said the results showed a turnaround was under way.

Higher revenue came from the company providing more hospital-level care and reaping more money from deferred management fees, set at 20 per cent of purchase prices – the money it retains when people leave their places due to illness or death.

But the impacts of impairments and other one-off costs ($283.9m, FY23: $175.4m) and a lower fair value gain on investment properties led to a plunge in net profit after tax, the company said.

There was an impairment loss of $37.6m for the Karori site and a sale was expected within 12 months, it said.

Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.