It is not if but when! Fortunately -we are short lived creatures, and for each of us the chances of a tsunami disaster, major volcanic event, or catastrophic earthquake are tiny.
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It is not if but when! Fortunately -we are short lived creatures, and for each of us the chances of a tsunami disaster, major volcanic event, or catastrophic earthquake are tiny.
Does OCA have a DRP?
Visited the Sands open day yesterday with a great mate. WOW!....it's STUNNING! Unbelievable position with units priced from 800k-$2.5 million. If I had not personally seen these units and position I would be concerned about OCA pricing themselves out of the market. After seeing them first hand and talking with a local multi house owner I am satisfied the asking prices are justified. FYI the $2.5 million units have nice red sold dots on them.(a total of 17 are sold and a further 7 on hold-2 residence have moved in)
The internal work seems 100% finished except the care suit floor which is scheduled in another month or so. Ground work is only half finished. I would think it needs also one more month.But it's done enough to imagine how fabulous it will be when completed.
The sales people were run off their feet taking tours and they were a bit over run with the high level of interest.
This asset must surely be the jewel in OCAs crown. I could not think of a better place to spend my later years in and, yes, even a tight ar*se like myself would pay their asking prices to live there.
I continue to hold OCA with great confidence in their business model and high quality of execution. If they need another month to finish the Sands at this calibre then they have no quarrel from me.
Thank you for sharing your impressions, yes, this looks like a quite nice development!
For anybody living too far away to look at it in person - here is the webpage:
https://www.oceaniahealthcare.co.nz/the-sands-care
Thanks Maverick
Jeez, a 30% margin on a $2.5m villa is big bucks .....and more every few yearseh
winner, you repeatedly referred to the deferred management fees as "margin". I am sure you understand the difference between revenue (which the DMF is) and margin (which would be revenue minus cost) and am slightly confused why you would knowingly make wrong statements?
They use these fees to pay staff and materials to manage the village and maintain the grounds and typically as well to renovate the units after they are vacated.
From one of the competitors (Ryman):
Quote:
The deferred management fee is your contribution to the refurbishment and management of the retirement village. It is charged on an “enjoy now, pay later” basis, and is deducted when your capital sum is repaid to you.
OK BP
Yes, there is a difference between ‘development margin’ and ‘realised gains on resale’ but both are profits (underlying earnings)
Hmm - now I am really confused.
I assumed you are talking about the deferred management fee (since you posted "and more every few years") - which is clearly not profit (or margin), but revenue.
However - now you start talking about "development margin" which might be around 20% (not 30%) and it would be a one off gain anyway. The development margin would be the purchase price minus the development cost and yes, this would be profit.
What 30% did you talk about in your post?
Yes you are correct - deferred management fees are revenue.
Yes, there is a one off ‘development margin’ / realised gain when a unit is first sold. There last report said this was 29.5% so close to 30%
And then when that is resold they realise another gain ( though could be a loss). The realised gain on resale is the difference between the incoming residents’ ORA licence payment and the ORA licence payment previously received from the outgoing resident. They reported a 30.3% resale margin in H119 - some $5.9m realised gains on resale (included in underlying profit)