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Summerset gets consent for $80 million Wigram village

Wednesday 3rd December 2014

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Summerset Group Holdings, the listed retirement village, has been granted resource consent for its $80 million Wigram village, its first in Christchurch.

The new site will have some 200 units, including villas, townhouses and care apartments as well as 50 hospital level beds, the Wellington based company said in a statement. Building will begin next month with first homes opening late next year.

The company is hoping to capture the Canterbury market, which it says has a shortage with less than 10 percent of Cantabrians 75 years and older living in villages, compared to 12.5 percent nationally, Summerset said. Along with the 5.4 hectare site at Wigram, the retirement village operator has a 9.7 hectare greenfield site at Casebrook in Christchurch, for which it has yet to lodge an application.

Retirement village companies are acquiring land and preparing for a record building spree in anticipation of increased demand as people born in New Zealand's post-war era start to reach the target age for operators, including Summerset and its larger rivals Ryman Healthcare and Metlifecare.

In August, Summerset said net profit rose 42 percent to $15.3 million in the six months ended June 30, lagging last year's first half profit growth of 174 percent as it focuses on developing villages for future growth. Revenue rose 19 percent to $25.2 million, helped by increased occupancy of new villages.

Shares of Summerset last traded at $2.68 and have fallen some 18 percent this year. The stock is rated an average of 'buy' based on the recommendations of five analysts surveyed by Reuters with a median price target of $3.43.

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