Retirement village operators

[artemis]

Thanks winner69, nice chart. Perhaps add Promisia (PIL) at some stage. Penny stock for sure but the assets backed in are already established and form a base for future acquisitions.

[Cricketfan]

Anyone investing or looked into SRF (Senior Trust Retirement Village Listed Fund)? Looks like a good dividend stock, but curious as to why anyone would choose to apply directly with them (https://www.seniortrust.co.nz/) rather than just buy via NZX.

[bull....]

new index to follow unit prices cool

The Forsyth Barr analysts research the big four sharemarket-listed retirement village businesses. The companies are Ryman Healthcare, Summerset Group, Oceania Healthcare and Arvida.

A new index created by Ibbotson and Montgomerie showed an increase in the prices of units, or villas as they are called, of 4.4 per cent in January and February but prices flattened in March and April.

https://www.stuff.co.nz/business/125...market-bonanza

[Greekwatchdog]

Posted that on 07/05 under OCA.
For Bars latest below..
Aged Care Sector
Montgomerie-Ibbotson Aged Care Pricing Index




After a strong start to the year, our analysis suggests the Montgomerie-Ibbotson (MI) aged-care pricing index has been flat
over the last two months, increasing our confidence in its accuracy. We believe stable prices reflect two key factors; (1)
pricing caution from the listed operators in light of the government's housing policy announcement, and (2) potential
pricing timing discrepancies given the aged care operators don't typically review prices on a monthly basis. Looking
forward, we remain positive on the sector and believe the pricing "buffer" built up by the operators following New
Zealand's strong recent house price inflation (HPI) provides resilience in the event of a slowing housing market and further
optionality if prices remain stable or continue to trend upwards.
MI aged care pricing index flat over the past two months
Following a strong lift in prices to start 2021 with January up +0.5% and February up +2.9%, the MI aged care pricing index has
been flat through March and April. Independent Living Units (ILUs) were the key driver of change to start the year (up +4.4%) and
while there has been no change in ILU pricing through March and April we have again seen minimal change in Serviced Apartment/
Care Suite (SA/CS) pricing. This SA/CS pricing trend relative to ILUs is somewhat surprising but likely reflects the defensive and less
cyclically exposed nature of the product. Summerset (SUM), Arvida (ARV) and Ryman (RYM) all show broadly flat prices over the past
two months but we have seen a slight tick up in Oceania's (OCA's) ILU and SA/CS pricing, albeit caution the material sample size
difference for OCA versus RYM and SUM.
Pent up house price inflation provides a "buffer"
One of the key takeaways from our recent aged care tour was the "buffer" retirement village operators have to further increase prices
following the shift in New Zealand house prices over the past twelve months (c. +20%). Numerous operators on our tour suggested
that, while prices have increased modestly in recent months, there are more price rises on the horizon given some opted to delay
pricing decisions in light of COVID-19 uncertainty through the second half of CY20. Our analysis suggests these price increases are
yet to occur, likely in-part due to the government's housing policy announcement on March 23. We view this buffer as important to
help provide price resilience in a slowing market but also add further optionality going forward.

[epower]

How is everyone working out valuations for retirement villages? Purely doing discounted cash flows? Based on discounted dividends? NTA and EPS growth?

Interested as they are like a REIT but a service and real estate agent business on the side too

[bull....]

How is everyone working out valuations for retirement villages? Purely doing discounted cash flows? Based on discounted dividends? NTA and EPS growth?

Interested as they are like a REIT but a service and real estate agent business on the side too

after towers announcement yesterday of blow out building costs coming thru the system you should really factor in lower margins in your analysis for these stocks now

[Greekwatchdog]

Interesting article in Herald. (Paywalled) https://www.nzherald.co.nz/business/...7MNM4E7X33LMM/

[dobby41]

Interesting article in Herald. (Paywalled) https://www.nzherald.co.nz/business/...7MNM4E7X33LMM/

The issues will gather traction.
Best result would be (as the article says) to show that 'there is nothing to see here' - fix the issues before they are forced to (regulation usually goes further than you'd like).

[Davexl]

Food for Thought - Fletchers upping competitive pressure...(from Fletchers update in the Herald today)

https://www.nzherald.co.nz/business/...4YMD2WBGLH72A/ (Paywalled)

Fletchers challenge to Retirement specialists eg OCA etc

Retirement village homes are planned at Manukau's Waiata Shores and Red Beach on the Hibiscus Coast "and looking to grow delivery through FY24-25 to 100 units," Evans said. These plans were in response to older people who wanted to stay in such communities struggling to find one, two or three-bedroom retirement homes.

"Based on an established occupation rights agreement structure but with a differentiated deferred management fee of 15 per cent plus sharing of capital gains with residents," Evans' slide said on retirement village developments.

That is a big challenge to six major sector giants who charge 20 to 30 per cent deferred management fees and hand over zero capital gains to owners.

[Biscuit]

Food for Thought - Fletchers upping competitive pressure...(from Fletchers update in the Herald today)

https://www.nzherald.co.nz/business/...4YMD2WBGLH72A/ (Paywalled)

Fletchers challenge to Retirement specialists eg OCA etc

Retirement village homes are planned at Manukau's Waiata Shores and Red Beach on the Hibiscus Coast "and looking to grow delivery through FY24-25 to 100 units," Evans said. These plans were in response to older people who wanted to stay in such communities struggling to find one, two or three-bedroom retirement homes.

"Based on an established occupation rights agreement structure but with a differentiated deferred management fee of 15 per cent plus sharing of capital gains with residents," Evans' slide said on retirement village developments.

That is a big challenge to six major sector giants who charge 20 to 30 per cent deferred management fees and hand over zero capital gains to owners.

But are they going to provide care? Retirees generally want to move into a retirement village where they can progress up the care ladder. What level of care can Fletchers offer?