Summerset chief extols benefits of Australian expansion

Cook, who talked about Australian expansion. Photo/Chris Steel

Listed retirement giant Summerset Group has sent a top development executive to Melbourne this year and chief executive Julian Cook said the business regarded Australia and particularly Victoria as offering opportunity.

Talking about Summerset's result for the June 30, 2018 half-year, Cook expanded on why the company with 23 villages here might cross the Ditch.

"Paul Morris, who used to run development in New Zealand, is now heading up development in Australia and he's been there this year. The more work we do, the more we see it's an attractive market," Cook said of Australia.

Asked what sites and suburbs Summerset was looking at, Cook said he could not yet be specific or provide any further details but the entire state could offer big scope for development work.

"We're considering Victoria generally. We don't want to give a timeline. It's a large market. We believe it's under-served by quality retirement village offerings. There are few who are offering a continuum of care. Ryman [Healthcare] has one village up and another on the way and a big part of that is the continuum of care," he said of why Australians were drawn to the New Zealand retirement village model.

Summerset's model could be attractive to Victorians and Australians generally, he said.

"The continuum of care is independent living, rest home, hospital and dementia, all on the one site. They don't have a lot of that for various reasons," Cook said.

In May, Ryman said new villages in Hamilton here and Coburg in Melbourne had received planning consent. Consenting was well advanced for new sites at Burwood East in Melbourne and Geelong in Victoria, it said.

Ryman had secured its eighth site in Victoria at Aberfeldie and had also bought new sites at Havelock North and Karori in Wellington.

Summerset's June half-year accounts showed an $800,000 provision for tax but Cook said no tax was paid: "We spend $200m to $300m a year on properties and if we were not building that, we would pay tax. We pay no tax while we're building."

Summerset's half-year net profit after tax dropped 9 per cent from $90.3m in the half year to June 30, 2017 to $82m in the latest period but Cook attributed that to lower rises in property valuations.

Summerset is reconsidering its development plans at St Johns, Auckland after an over-height application was rejected but Cook refused to say what height might next be applied for.

The site was recognised as "perfect" for a retirement village, he said, "and we're pretty confident we will get a village there. We need to work through that."

Cook is concerned about staffing levels in the aged care sector, saying immigration changes to visas and long-term skill shortage categories by the previous Government had made life harder for his business which employs 1300 staff and has 900 hospital beds in its villages.

"It takes longer to get someone," he said, but that varied between regions.