To retire comfortably is a dream for many, and retirement village operator Summerset Group (ASX: SNZ) is all about making it come true. The Company has acquired three sites, two in New Zealand and one in Australia, valued at over $600 million, to set up elaborate retirement villages.
The New Zealand acquisitions are in Masterton (Wairarapa) and Rotorua (Bay of Plenty), while the Australian purchase is in Mernda (Victoria). Offering rest homes and hospital-level care, with the sites planned to comprise over 800 houses combined once fully developed.
This acquisition announcement follows Summerset’s release of its half-year results, which showed an underlying profit of $82.5 million, up 9.2% on the same period last year.
Masterton is Wairarapa’s largest town, and Summerset’s village in Landsdowne is located within the premium subdivision of Cashmere Downs.
Summerset Chief Executive Scott Scoullar expounded, “Masterton is a hub for the Wairarapa, and it is expected [that] the new village will draw residents from across the region and Wellington due to the peaceful nature of the location and the local amenities which have become a major drawcard for the region.”
Wairarapa is home to a rapidly growing aging population. The number of people aged over 75 is expected to increase 50% in the next six years. Along with that, the Company believes that, for Wellingtonians, this will be a chance to retire and live happily surrounded by the Wairarapa vineyards, golf courses and pleasant climate.
On the other hand, Rotorua in Fairy Springs, New Zealand, is the Company’s first site in the city. It provides easy access to State Highway 5, and it is situated close to recreational amenities, such as golf clubs and the CBD just 5 km away.
According to Scoullar, the city does not have a similar retirement village offering. Forecasting the population of people aged over 70 to increase by 30% in the next six years, the Company wants to tap into the segment to gain an early mover advantage.
He adds, “Our villages will offer a full range of high-quality units for independent living, as well as a residential care offering on site.”
The acquisition of the Mernda, Victoria site is also a step in the direction of the Company’s Australian expansion mission. It brings the total number of sites in Australia to six.
The Mernda site is situated about 30 km north-east of Melbourne’s CBD. It is a suburban area, allowing people to access plenty of social, recreational and retail amenities. The location has seen substantial investment in roading, infrastructure and other facilities, such as the development of a $500 million town centre, a community hospital and new train station.
As per the Company’s 2022 half year report ending June 30, 223 new retirement units have been delivered, marking Summerset’s second highest first half ever.
Additionally, the Company is continuing to look for suitable sites around Victoria to complement the existing properties, with a focus on broad acre opportunities. The Company has also been approved to provide residential home care and home care services in Australia where the latest Mernda site increases Sommerset’s total capacity in Victoria to more than 1,700 units.
Alinda is a Business Reporter for The Sentiment
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