Summerset buys development sites in Christchurch, plans $200m investment

Summerset Group [NZX: SUM], New Zealand's third-largest listed retirement village operator, plans to invest $200 million to expand into Christchurch where it says villages are in short supply.

Summerset has bought a 9.7 hectare site in Casebrook and a 5.4 hectare site in Wigram to develop new villages, the Wellington-based company said in a statement.

The two Christchurch sites add to Summerset's existing development land in Ellerslie, Hobsonville, Lower Hutt and New Plymouth and its 17 New Zealand villages. Summerset is betting on increased demand for its villages as it benefits from an ageing population. The company expects to build at least 200 new retirement units this financial year and is targeting an annual build rate of 300 units by 2015.

"The company has strong growth objectives with Christchurch being an important part of this," Julian Cook, who will take over as chief executive next year, said in the statement. "The city was a visible gap in our portfolio and we've had lots of interest from Christchurch residents into our villages."

Shares in Summerset rose 1.3 percent to a week high of $3.23. The stock has gained 42 percent this year, the fifth best performer on the benchmark NZX50 Index.