Secure lending on growing legal ponzi scheme assets.
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Certainly not for shareholders.
To keep the schemes going, the promoters need to offer excellent security,and care for their residents.Failure to offer superior value will see these schemes end.With the massive tsunami of retirees growing over the next 20 to 30 years, these schemes have huge tail winds.
mav pg 36 in the presentation shows development margins they peaked in 1st half 2018 even though they are still high compared to previous yrs a trend maybe under way.
have to remember oca make a lot of there profit from there development margin.
heres a good news article by a property developer on how costs can easliy blow out your property development
https://www.interest.co.nz/property/...g-houses-costs
In property development the main thing is - They make money through OPM (other people's money) lol your the partner with them and you get a dividend for your share of the company they get all the development margins, gains on property etc
Don't forget - most of the liabilty is the "interest free" loan Ryman (and other retirement village operators) get from their clientele. This is the payment of which they return 70% (or whatever) after their customers depart. Has nothing to do with banks - no risk for them.
An item on the RNZ Business News this morning...
https://www.radionz.co.nz/national/p...-30-march-2019
Listen at 2:12 and more specifically at 3:30.
According to analyst Frances Sweetman Milford Private Wealth is investing less in the retirement sector as a reflection of caution about the housing market -- retirement village operators being dependent on houses selling in order for people to buy in their villages.
Yes that's the point of difference, OCA's smaller much more affordable care suites that people need. SUM other retirement companies are not so well positioned with predominantly larger units being built on a lifestyle basis if people make the discretionary choice to choose them and only if they can get what they want for their house. RYM even worse off as being massively exposed to the rapidly declining Melbourne market and on a forward PE of more than double OCA. Either of those two would make a good short (in my opinion) for anyone looking to hedge their OCA sector exposure.