Summerset snaps up new properties in Wairarapa, Bay of Plenty, Australia

Summerset chief executive Scott Scoullar said one new village will draw residents from across the Wairarapa and Wellington. Photo / Supplied

Summerset Group has snapped up two new properties in New Zealand and one in Australia for more than $600 million as it continues to strengthen the portfolio.

The NZ acquisitions are in Masterton (Wairarapa) and Rotorua (Bay of Plenty), while the Australian purchase is in Mernda (Victoria).

The NZ sites will each offer more than 300 units and give Summerset enough secured land to more than double the size of its current NZ business.

Mernda is Summerset's sixth Australian site and offers the capacity to build approximately 1,700 units in Victoria.

"Masterton is a hub for the Wairarapa, and it is expected the new village will draw residents from across the region and Wellington," said chief executive Scott Scoullar.

The village in Fairy Springs is Summerset's first site in Rotorua while the Mernda purchase brings the total number of sites in the state to six.

Underlying profit up

The company also said underlying profit for the six months to June 30 was $82.5m, up 9.2 per cent on the year.

Revenue lifted 20.3 per cent to $114.1m but net profit of $134.6m was down 49 per cent from the same period a year earlier.

The fall in net profit was related to lower fair value movement in investment property, it said.

The Summerset board declared an unimputed interim dividend of 10.7 cents per share. The record date will be Sept 6, payable on Sep 19.

Scoullar said it was an excellent result, particularly considering the disruptions that the arrival of omicron created in the half.

He also said the company responded well to the economic and housing market pressures in NZ over the six months.

"While the residential property market rose significantly over the two years to December 2021, we did not increase our own pricing at the same rate. This provided us with a buffer going into what could be a flat to declining market in the coming months," he said.

"We're not seeing excesses of stock or any changes in demand either, our available retirement units have stayed steady, and demand doesn't appear to be tethered to the property market," he added.

Total sales for the half were 511, limited principally by availability of stock, he said.

Summerset reported a development margin of 28.1 per cent, up from 21.6 per cent for the same period last year, exceeding the company's longer-term expectations of development margins in the 20-25 per cent range.

Total assets grew to $5.4 billion, up 22.9 per cent from the same period last year.

Summerset delivered 223 total units, its second-highest first half ever.

Looking ahead, Scoullar said the company is on track to deliver approximately 600 units this year.

-By Rebecca Howard