Prop­erty val­ues hit Metlife­care


A knock-on ef­fect of the slow­ing prop­erty mar­ket has seen an end to the ‘‘spec­tac­u­lar growth’’ in as­set val­ues at re­tire­ment vil­lage Metlife­care.

The com­pany, which has 24 vil­lages, has posted an in­terim net profit of $56.4 mil­lion for the six months to De­cem­ber 31, down 65 per cent from $165m the year be­fore. Metlife­care chief ex­ec­u­tive Glen Sowry said the price paid for houses was di­rectly linked to what peo­ple could af­ford to pay for a re­tire­ment unit, and that af­fected Metlife­care’s as­set val­ues.

‘‘Over the last two or three years, we saw par­tic­u­larly strong house-price in­fla­tion, es­pe­cially in the up­per North Is­land, and that trans­lated into sig­nif­i­cant val­u­a­tion up­lifts on our port­fo­lio of vil­lages. So we were es­sen­tially book­ing pa­per gains in terms of net profit af­ter tax.

‘‘I think ev­ery­one will ac­knowl­edge and ac­cept that that level of in­crease is un­sus­tain­able, and needed to re­turn to more nor­malised lev­els.’’

The com­pany is still fore­cast­ing its un­der­ly­ing net profit to be at least at last year’s lev­els, de­spite a $44m weath­er­tight­ness re­pair pro­gramme over the next seven years to fix more than 100 units with cladding or bal­cony prob­lems.

About 70 units are in Kapiti and the rest in Auck­land. The first-half re­sults in­cluded the cost of buy­ing back 41 of its own units to tem­po­rar­ily house res­i­dents whose units needed re­pairs.

But the com­pany would make back some money from a string of new units due to be fin­ished in the sec­ond half of the year, Sowry said.

Nev­er­the­less, Metlife­care’s in­terim rev­enue was up nearly 5 per cent to $56.6m. Sales of new units fell 62 per cent to $21.6m but re­sales were up 3 per cent to $80.6m. Both were sup­ported by ‘‘sig­nif­i­cantly higher’’ mar­gins.

Sowry said the com­pany was com­plet­ing about one vil­lage a year on time and bud­get.


Oc­cu­pancy lev­els at its vil­lages were 98 per cent.

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