Leak check

Metlifecare reviewing retirement villages

Listed retirement business Metlifecare is reviewing all of its villages after leaky building issues have affected four sites.

Chris Gaskin, of Devon Funds, said issues at four Metlifecare villages (three in Auckland and one north of Wellington) had been well flagged and investors knew about them.

“This is not unique to the industry. Ryman Healthcare had to do a major overhaul of the Grace Joel village after discovering leaky buildings a few years ago,” Gaskin said.

He was commenting after Metlifecare said it was ascertaining if units and buildings in its other 20 villages needed fixing, aside from the four where issues were known.

Glen Sowry, chief executive of the company, which has a $1.1 billion market capitalisation, disclosed the issues at the four villages and said it was reviewing all villages.

Sowry told of problems at Pinesong where one 19-unit building was being demolished; Waitakere Gardens where up to 183 apartments could be affected; Dannemora Gardens where 16 balconies were being fixed; and Coastal Villas on the Kapiti Coast where a re-cladding programme had begun.

“The company talked pretty extensively at the investor day about the issues/potential for leaky buildings in the portfolio.

“The Pinesong village maintenance/refurb basically allowed them to increase the size (and more importantly from an investment point of view, yield) of the village,” Gaskin said.

Waitakere Gardens had been built around the time that building practices were not that good right across the residential construction industry.

“My understanding is that there are issues around water pooling on the balconies and this might be an issue with the cladding. I think Met are right on top of the issues,” Gaskin said.

“Given the size of their portfolios you would imagine the odd issue from time to time for Ryman and Met, but from a value perspective, [this is] not material,” he said.

The company is considering taking legal action and some elderly residents have had to be moved from their homes.

“The Manukau Building at Pinesong is being demolished and redeveloped. The rebuilt apartment building will have 48 apartments,” Sowry said.

“The surveys to date at Waitakere Gardens have identified the blocks we need to focus further investigation on, these total 183 apartments. The further investigation we’re undertaking will allow us to refine this number in terms of the effect on each individual apartment and resident,” he said.

“We are progressively reviewing all of our villages to identify areas of potential design risk and where remediation work may be required. We have a programme of work to

We are progressively reviewing all of our villages to identify areas of potential design risk and where remediation work may be required. Glen Sowry, CEO Metlifecare

remediate a small number of balconies in one small part of our Dannemora Garden’s village.

“We have also commenced work on a re-clad programme with a number of villas within our Coastal Villas village on the Kapiti Coast.”

Metlifecare is second only to Ryman in terms of size. It has 4000 units in 24 villages which are home to more than 5000 residents who don’t own the properties but have bought licenses to occupy.

“All the Manukau building residents at Pinesong village have moved into other apartments and villas within the village,” Sowry said.

“We worked individually with each resident to find the most suitable accommodation option for them. Some have moved permanently into other apartments and villas at their request, and some are excited about returning to a brand new apartment building when it’s completed.”