Indoor pool at The Helier retirement village in St Heliers. Photo / Oceania Healthcare
New East Auckland vertical retirement “village” The Helier offers residents chauffeur-driven hybrid Jaguars, services of an executive chef, logo-embroidered dressing gowns, 24-hour-a-day room service and monogrammed stationery.
Yet such five-star hotel features have not been enough to bring many buyers since it opened last winter because last week, its owner declared it 69% empty – or rather, 31% “occupied”.
Retirement villages aim to bring people together, creating a hub within a local community to counter loneliness and create a fulfilling lifestyle, offering features like BBQ areas, gyms, cinemas, libraries, day spas, cafes, pools, companionship, outings and activities.
The Helier is promoted as offering “world-class hospitality” above Glover Park, with 360-degree views over the Waitematā.
It’s not cheap.
Prices for a licence to occupy an apartment on the new 111-unit property at 28 Waimarie St start from $1.5 million to $5m+. It costs up to $3500/week for higher-needs geriatric care in the care residences.
Oceania is advertising a “brand new” 80sq m apartment for $1.7m and a never-lived-in 124sq m place for $2.7m.
Most units are unsold in the residential slump.
Friday’s investor presentation accompanying half-year results from developer/owner Oceania Healthcare said only 21 apartments and 13 private care residences out of the 111-unit Auckland property were occupied yet the company said it still believed in the product and service at that village which won a Property Council award.
“A revised sales and marketing strategy is required,” the company admitted on Friday.
Last July, marketing general manager Sandra Daniel said The Helier had 79 apartments, of which the most expensive has pre-sold for $5m-plus.
What does Oceania’s new Australian-born chief executive Suzanne Dvorak have to say?
“The Helier opened last year right on the cusp of the tough economic times so sales were always going to be tricky. We have noticed that since there’s been some relief in interest rates, we’ve started to have more inquiries. I’ve done a couple of high-end retirement village developments in Melbourne and Sydney and they always take longer to sell. You’re appealing to a new market. I’m not surprised about sales at The Helier. During tough economic times, people have to sell their houses as well.”
She hopes the holiday season and falling interest rates will spark more sales.
But even with lower occupancies, communal facilities were being well used, she said.
“It will look busier when it’s more fully occupied. It feels like a full and happy place. There’s lots of visitors and people coming and going.”
Dvorak, who previously led Bupa Australia and Levande, is renting an apartment above Victoria Park in Auckland. Oceania’s HQ are on level 26 of the HSBC Centre in Commercial Bay “so I can walk to work”.
She left her home in Melbourne’s South Yarra for the job here. Two university-age children are living there and she hopes they may come and stay here too.
“Certainly being an Australian, people are interested to know where I have settled in Auckland,” she acknowledges.
Oceania has $628.9m borrowed and $2.8b of assets.
In the half-year to September 30, 2024, Oceania recorded a bottom-line loss of $17.1m after financing costs increased and revenue rose only 1% from $131.6m to $132.6m. The company sold seven properties lately and is about to sell an eighth, as it quits older rest homes and moves the business into more upmarket new villages with expensive care suites.
Last June, now-ex-Oceania CEO Brent Pattison explained how The Helier was a pioneer because it will be the resident and Oceania instead of the local health authority that decides if someone goes into that rest home or hospital suite.
Pattison explained: “It’s the first time we’re aware of that we have a private resident-paying model. While we will still be certified under the Ministry of Health, we will not be entering into an authorised care contract with the Government.”
That means the transfer to a higher level of care won’t be controlled by the standard government model but is within the resident and Oceania’s control, offering a big point of difference to most other retirement village hospitals.
In Auckland city, the Government fully funds the more than $1000/week rest home fee for New Zealanders with assets below $284,636, via the Ministry of Social Development. But many elderly in retirement villages who enter rest homes or hospitals on those sites don’t qualify because they are too wealthy so they fully fund their own higher-level care.
At The Helier, this has been taken to a new level costing $3500/week, pitched towards a wealthier market where it’s envisaged the resident fully funds their higher level or palliative care.
Fees are $275/week, fixed for the term of the resident’s occupation, covering rates, building insurance, garden maintenance, building repairs and maintenance, cleaning building exteriors and outside windows, emergency call alarm response, water fees, maintenance of the pool, spa and gym and regulatory costs.
In addition, mandatory hospitality fees are $200/week for an individual and $275/week for a couple covering electricity, Wi-Fi, daily newspaper delivery, concierge, valet parking, weekly cleaning, weekly linen cleaning, weekly wellness clinic check, village pool vehicle use, chauffeur service and daily barista-made coffee or tea, served from the cafe.
In August 2022, Oceania opened a marketing showroom at St Heliers Mall to drive sales.
Last year, Pattison acknowledged construction was running around three months later than initially expected because of the last January floods and Cyclone Gabrielle.
But he said the site was only purchased – mainly from Greg Olliver-associated interests – in 2019. Olliver and his family once lived on the site, dubbed Neverland, when he proposed a big redevelopment which was never carried out.
Pattison said Oceania’s head contractor Argon Construction started work at the blocks designed by architects Peddlethorp in 2020.
The site was complicated, on the tuff ring of a volcano, built above the Glover Park crater but Pattison said earthworks were relatively straightforward and ground conditions were as anticipated.
Jarden analysts Arie Dekker and Vishal Bhula’s reaction to Oceania’s half-year results was headed “yes on sales urgency“.
That said operating results were lumpy and costs too high.
The company’s cash earnings and care and village segment results were benefiting from ongoing growth in deferred management fees and refinancing gains but are being weighed down by a cost base that has seen significant growth.
Care occupancy in new high-cost facilities and low service fees in villages with high stock were factors that should start to unwind, the analysts forecast.
New sales were in line with expectations, they said.
Dvorak says of the Jarden analysts’ piece: “Everyone is in agreement with what needs to happen with sales.”
She can’t say when dividends might resume.
Oceania was at 80c on Friday when the result was issued. It had a market cap then of $579m. But it is trading now around 71c now, giving a market cap of $514m.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.
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