Land bank swells with two new sites
New Zealand’s largest retirement village operator Ryman Healthcare has announced it has bought two new sites for retirement villages and recorded a $188.3 million profit for the half year.
One site is 12.9 hectares in Northwood, Christchurch, across the road from the Northwood Supa Centre and owned by Canadian investors – Public Sector Pension Investment Board (PSPIB) and
Canada Pension Plan Investment Board, which bought it from AMP Capital in 2014.
The purchase is conditional on Overseas Investment Office approval.
Ryman plans a $149m retirement village on the site, which is near the Styx River on the Main North Rd in Christchurch.
It is likely to include a rest home and hospital and dementia care, as well as serviced apartments, town houses and apartments for independent residents.
The other 1.2ha site is in the Bayside area, 15 kilometres southeast of Melbourne, at Highett.
Ryman acting chief development officer Jeremy Moore said the Northwood site would cater to the needs of retirees in the fastgrowing northern suburbs of Christchurch.
Ryman operates seven of its 36 villages in New Zealand and Victoria in Australia.
Ryman opened its first village in Melbourne in 2014 at Wheelers Hill and now has more than 650 residents in Victoria.
Other villages operating in Melbourne are Nellie Melba and Weary Dunlop, and it has eight other sites for new villages in Melbourne, the Mornington Peninsula and the Bellarine Peninsula.
Chief executive Gordon MacLeod said: ‘‘We have significantly lifted our land bank over the past three years to match our growth aspirations in New Zealand and Victoria. We are now moving into our biggest ever build programme on stunning sites.’’
Ryman’s underlying profit for the half-year to September 30, 2019, was $103m, driven by record resales volume. The second half was expected to be stronger as the building programme expanded.
Full-year underlying profit was expected to be $250m to $265m, compared to the previous years’ $227m.
Ryman’s New Zealand resales volumes grew 11.3 per cent while volumes in the wider real estate market declined 15 per cent, which demonstrated the continued appeal of Ryman villages, chairman Dr David Kerr said.
The two new sites took Ryman’s land bank to 7074 units and beds.
Of the 22 sites in its land bank, 10 had development under way. With development of the land bank over the coming years Ryman expected to be providing homes and care for more than 20,000 people. At present, it has 11,400 residents and 5700 staff.
It was targeting a build rate of 900 units and beds this year, up from 757 in the 2019 financial year. It was aiming to double underlying profit every five years and to create a tail of growing earnings, MacLeod said.
The $188.3m after-tax profit for the six months to September 30, 2019, is 11 per cent higher than the previous half year. The profit included investment property revaluation gains of $92.7m.