Summerset expansion sees first-quarter sales of occupation rights rise 41%
Summerset Group increased sales of occupation rights at its retirement villages by 41 percent in the first quarter and said the remainder of the year "looks positive".
The Wellington-based company sold 171 occupation rights agreements in the quarter ended March 31, up from 121 in the year earlier period, it said in a statement. Sales for new units increased to 97 from 75 a year earlier, while resales rose to 74 from 46, it said.
Summerset is in expansion mode, having delivered a record 409 retirement units in the 2016 year, 35 percent more than in 2015. It has raised its target for this year to around 450 units and signalled sales of occupation rights are likely to accelerate in the second half of the year as those dwellings are completed.
"Both new sales and resales were strong, with new sales driven by the development pipeline across a number of villages and resales driven by increased levels of retirement units becoming available for resale," said chief executive Julian Cook. "We continue to see good levels of demand across all areas of the country.
"The outlook for the balance of the year looks positive with good pre-sale levels on projects delivering through this year. We note that our construction programme sees retirement unit deliveries weighted to the second half of the year and we expect the split of new sales across the year to be in line with this."
New Zealand retirement village operators are acquiring land and preparing for a record building spree in anticipation of increased demand as people born in the country's post-war era reach the target age for operators, including Summerset and its larger rivals Ryman Healthcare and Metlifecare. Summerset has a land bank of about 2,609 retirement units and 366 care beds, and it expects the population aged over 75 to grow 239 percent from 2016 to 2068.
The company's shares last traded at $5.23 and have gained 23 percent the past 12 months.