Oceania Healthcare to buy vacant lot in Auckland's St Heliers

Oceania Healthcare has agreed to buy a vacant lot in Auckland's St Heliers valued at $15.6 million for an undisclosed sum, which it plans to develop into a new retirement village.

The Auckland-based company entered into an unconditional deal to buy the 8,945 square metre site, which is expected to settle at the end of the week, it said in a statement. Oceania plans to develop an integrated retirement village and aged care facility on the site, which overlooks Auckland's harbour, and will start work on getting the appropriate consents immediately.

"This is Oceania Healthcare's first greenfield acquisition and adds to its substantial brownfield development pipeline, which will maintain development activity for seven-to-eight years into the future," chief executive Earl Gasparich said. "The property is in an excellent location with strong demand for aged care and retirement village living."

The land was put up for sale by liquidators KPMG in an international tender run by Bayleys Realty Group, which marketed the nine titles as "a rare opportunity to acquire such a large freehold land site in this aspirational Auckland residential seaside suburb".

The property had been tied up for almost four years by litigation between developer Greg Oliver and his former partner Sarah Sparks, Bayleys said in October. At the time, the realtor said the land had a council valuation of $15.6 million and was zoned for residential-mixed housing, allowing for the building of one- and two-storey standalone homes.

Oceania raised $200 million earlier this year in an initial public offering, of which $173.4 million went to repay debt, which it said would give it headroom to fund development projects. Another $16.1 million went to acquire the title of a care facility the company was leasing and $10.5 million covered the offer costs.

As at May 31, Oceania held $10.9 million of cash and equivalents, generating operating cash flow of $38.9 million and spending $81.1 million on investment activities. Net debt was $84.4 million.

The shares last traded at 96 cents, having gained from 79 cents in the May IPO.

(BusinessDesk)