Summerset St Johns retirement village in Auckland, valued at $477.7 million. Photo / Summerset
Summerset St Johns retirement village in Auckland, valued at $477.7 million. Photo / Summerset
Summerset Group has labelled itself New Zealand’s fastest-growing retirement village operator, with assets up 18% annually and a pipeline of 7000-plus housing units and private hospital or care rooms.
“Our land bank has 5800-plus retirement units and 1300-plus care units,” says the company, whose market capitalisation has now exceeded RymanHealthcare, which for many years has been the country’s largest retirement business.
Summerset’s market capitalisation today stands at $2.5 billion on the NZX, while Ryman is at $2.4b.
However, Ryman has $12b of assets while Summerset has $8.7b.
Yet growing by 18%, the value of Summerset’s assets is rising fast.
“Summerset is the fastest-growing retirement village developer in New Zealand and remains on track for FY25 NZ build guidance of 600 to 650 units to be sold under occupation rights,” today’s investor presentation said.
Summerset St Johns retirement village in Auckland.
“The business has no core debt, is forecast to generate over $295m in project cash profits, and over $2.9b in net tangible asset uplift - approximately $12.30 per share - out of current developments.”
It has 6913 retirement units in its existing portfolio, 94% retirement village occupancy and 95% hospital or care centre bed occupancy.
It is paying an interim dividend of 11.3cps.
It owns the Summerset St Johns in east Auckland. That apartment village is valued on the latest accounts at $477.7m. The Heraldvisited the site last year when it was almost completed.
Today, the company declared net profit after tax of $127.2m for the half-year to June 30, up 26% on 1H24.
It made total revenue of $173m, up 14%.
Summerset on Cavendish, in Christchurch.
Chief executive Scott Scoullar said the markets here and in Australia were showing signs of improvement, but it was still a challenging economic environment in which to operate.
“Despite this, we’ve delivered value for our shareholders, maintained our record resident satisfaction and had record sales for the half.
“We’re pleased with our start to the year. We will continue to work hard to deliver sales in the second half, building on this momentum.”
The company sold 692 properties in the latest half-year: 354 new sales and 338 resales.
The housing market downturn does not appear to have dented Summerset’s growth.
Total sales for the first half of the year were the highest first half the company has recorded, with new sales being particularly strong, up 22% on the 1H24.
Scott Scoullar, Summerset chief executive.
Scoullar said the company had changed part of its business model.
Some care units could now be sold under occupation rights agreements (ORAs) to provide greater financial certainty to Summerset and residents that they would get hospital-level care if they needed it.
“Care ORAs allow our village residents to use the equity in their villa or apartment to purchase their care unit. It means they don’t need to pay daily premium charges.
“Our residents have been very positive about this new product, and we’ve seen uptake across the country as these have been rolled out.“
More than 750 care units have been identified as being able to be sold as ORAs.
