Outrage from retirement giants over proposed government ban on foreign investors

Retirement village operators want to be exempt from the ban. Photo/Martin Sykes

A proposed law change would ban multi-billion dollar retirement giants Ryman Healthcare and Metlifecare from buying any further New Zealand land without state consent, sparking an outcry from the NZX-listed businesses.

The heads of companies with significant foreign ownership sent strongly-worded submissions to the Finance and Expenditure Select Committee, pleading not to be stopped from buying further land here to expand without Overseas Investment Office approval each time.

But on this week's controversial 60 Minutes interview with Prime Minister Jacinda Adern, she reiterated ban plans, saying the Government would stop foreigners by simply saying no.

The Overseas Investment Amendment Bill, which had its first reading in the House before Christmas, will stop non-residents and non-citizens from buying New Zealand residential or lifestyle land.

Because overseas funds hold big stakes in the retirement specialists, the companies are classified as partly foreign controlled therefore would be forced to seek state exemption when they buy big greenfields sites.

Foreigners hold more than 25 per cent of Ryman, a spokesman said, "but we remain a New Zealand company. And more than 1 million Kiwis have an interest in us through their KiwiSaver investments."

Gordon MacLeod, Ryman chief executive, and group development manager Andrew Mitchell wrote to the select committee asking that retirement and NZX listed entities be exempt, pleading the case by saying "new retirement villages and aged care facilities care for elderly New Zealanders help solve our housing crisis".

Land bought for a retirement village or aged care facility was occupied by more people than other forms of residential redevelopment, they argued. Jobs were created in the building sector and quality new homes were built for older people, they said.

Glen Sowry, Metlifecare chief executive, told the Herald on Monday: "A bit over 30 per cent of our register is classified as foreign, held through funds offshore. For example, ANZ through OnePath owns 10 per cent of Metlifecare and ANZ is foreign because it is Australian. Retirement village operators should be exempt. Yes, we have foreign owners on our registers but the assets are remaining in the country."

Andrew Peskett, Metlifecare's general counsel, told the committee that several of its 24 villages were on sensitive land. A clear case could be made for exemption, he argued.

The Retirement Villages Association, representing owners of 350 villages with 30,000 units, asked the committee for the sector to be exempt from the buying ban which it said could have the opposite to the intended effect.

"In view of their special nature, operators of registered retirement villages and residential aged care facilities should receive a complete exemption from the act, whether directly or through Regulations, for the acquisition of sensitive land to be used for the purposes of a registered retirement village or aged care facility," the association said, worrying about Overseas Investment Office staffing and resourcing and the length of time applications could take.