Summerset builds record profit of $543.7m
Retirement village operator Summerset posted a record full-year profit as it benefited from rising property prices and built more units than ever before.
The company reported a profit of $543.7 million in 2021, up from $230.8m in 2020.
The value of Summerset’s properties lifted by a record $537.5m, compared with a gain of $221.1m the previous year. The value lift included a $320.9m benefit from housing inflation, $140.4m from new units, and a $34.2m uplift in the value of its land bank.
Retirement villages are growing rapidly to cater for an ageing population, with the proportion of the population aged over 75 forecast to double over the next 25 years. Summerset built a record 619 units in 2021, ahead of its forecast for between
550 and 600 units.
‘‘Summerset has been the top listed retirement village builder in New Zealand for several years in terms of number of units, but this year our record build rate means we are one of
the top residential builders in the country,’’ said chief executive Scott Scoullar.
Summerset expects to build between 550 and 650 units this coming year, with the mid-point of 600 units suggesting a similar level to last year’s 619.
‘‘It’s essentially the same sort of build rate projected for this year as what we achieved in 2021,’’ Scoullar said. He cited construction inflation of 7 to 8 per cent over the past year, difficulties in getting building supplies, a slowing housing market and caution over the impact of Omicron spreading over the next few months as factors constraining the build rate.
‘‘If we see good demand continue from what we saw last year, there’s the possibility we speed up, and if we see demand weaken a little bit we obviously can slow it down a little bit as well,’’ he said.
Summerset opened four new villages last year and will this year start construction at two new sites at Milldale in Auckland and Blenheim in Marlborough, and continue construction at another 15 sites around New Zealand.