Oceania Healthcare acquires prestigious retirement villages to service New Zealand’s aging population

Regarded as one of the most progressive nations in the world under the leadership of one outstanding individual, New Zealand could soon become a retirement destination if the trend of decadent living continues to be driven by aged care operator Oceania Healthcare (ASX/NZX: OCA), which has acquired two prestigious retirement villages where homes sell for up to $2 million each. 

Unlike standard retirement villages, is Remuera Rise is an 8-story building that contains 58 apartments built. The vertical village comprises a mix of 1 and 2 bedroom apartments ranging from 64 sqm to 132sqm with extensive facilities that include a cafe, restaurant and bar, library, billiards room, swimming pool and gymnasium. 

Should those facilities not be enough to meet the needs of retirees, Remuera Rise is located in Central Auckland just a short walk from the commercial district while also offering picturesque views of Hauraki Gulf. 

The second of the acquisitions is Bream Bay Village located in Ruakaka which includes 83 villas, a clubhouse, bowling green, gymnasium and indoor spa. The property spans 6.7 hectares and could see further value uplift with Oceania also securing an Option to acquire an adjacent 6.7 hectare block for which design work has been completed to build an additional 124 villas. 

Total consideration for the two properties excluding the Option is NZD $57 million with the acquisition to be earnings accretive to Oceania on an underlying basis. To fund the purchase, Oceania has entered into an agreement with its existing financiers to increase their facility limite from $350m to $500m. 

Having recently completed a comprehensive review of their development pipeline, the aged care operator now has more than 1,900 units and aged care suites in their development pipeline to capitalise on New Zealand’s aging population and demand for high quality retirement living. 

For the half year ended 30 September 2021, Oceania Healthcare reported a $113.9m in operating revenue which was a 9.6% increase on the previous year. Delivering on their vertically integrated operating model, this resulted in a 22.2% increase in underlying NPAT of $27.5m courtesy of 92.5% occupancy across their property portfolio.