OCA - Oceania Group - retirement villages

[Curly]

At close of trading today there is only .20c difference between ARV and OCA. In recent times the gap has been as high as .30c. So OCA not looking to bad at current level. I don’t think its the property value issue is affecting share price so much as the muted legislation to pull back some of the rest homes profits on resale of the units and redistribute that profit between the rest home owner and the occupation right holder. Currently all that profit goes to the rest home. Ten years ago unit purchased for $300k. OR holder gets back $210k. Rest home renovates and on sells for $600k or more (metropolitan NZ, not Auckland prices) Does seem bit lop sided. RYM and SUM been creaming it since inception of this model. There will be some tweaking is my guess.

[justakiwi]

I realise I’m only a very small investor, unlike most here, but I think there is room for all of these companies to do better in this area. Yes, of course I want my holding and return to grow, but I’m not greedy. I would have no objection to them profit sharing at some level.

But as you know, I wear two hats when it comes to this sector, so I don’t expect anyone to feel the same way.

At close of trading today there is only .20c difference between ARV and OCA. In recent times the gap has been as high as .30c. So OCA not looking to bad at current level. I don’t think its the property value issue is affecting share price so much as the muted legislation to pull back some of the rest homes profits on resale of the units and redistribute that profit between the rest home owner and the occupation right holder. Currently all that profit goes to the rest home. Ten years ago unit purchased for $300k. OR holder gets back $210k. Rest home renovates and on sells for $600k or more (metropolitan NZ, not Auckland prices) Does seem bit lop sided. RYM and SUM been creaming it since inception of this model. There will be some tweaking is my guess.

[Beagle]

The whole NZX50 is down ~ 6% this year on the back of sharply rising bond yields. By comparison OCA is up 1.6% inclusive of the dividend paid.

[Waltzing]

"i get very nervous when things start to look too good to be true.."

[Habits]

At close of trading today there is only .20c difference between ARV and OCA. In recent times the gap has been as high as .30c. So OCA not looking to bad at current level. I don’t think its the property value issue is affecting share price so much as the muted legislation to pull back some of the rest homes profits on resale of the units and redistribute that profit between the rest home owner and the occupation right holder. Currently all that profit goes to the rest home. Ten years ago unit purchased for $300k. OR holder gets back $210k. Rest home renovates and on sells for $600k or more (metropolitan NZ, not Auckland prices) Does seem bit lop sided. RYM and SUM been creaming it since inception of this model. There will be some tweaking is my guess.

Personally i dont see it as on-selling for 600k .. 600k is simply a notional value to calculate resthome fees. The example you gave of the 300k occupant who paid 70k over 10 years which is 7k/year or 140 per week. Another way to look is $23,333 per year over 3 years or 460pw for 3 years then free thereafter for a further seven years. Tbh thats not a good deal for a retirement operator although this is an example using hypotheticals, it is still maybe not too far off reality

The "purchase price" also equates to an interest free loan to the operator. With interest rates and the cost of capital so low now the inherent benefit of this loan has diminished a lot.

Disc sold two thirds of my oca holding in the weeks after disappointing HY.

[Logen Ninefingers]

Since it hit $1.60 it's been a mad scramble to get out.
Any thoughts on why?

[thegreatestben]

Easy money has been made post covid crash, many taking the money?

[wagwan]

Easy money has been made post covid crash, many taking the money?

And putting it where?

[thegreatestben]

Buying a ford ranger

[Beagle]

OCA3MONTH.jpg

Over the last few months it has continued to outperform the NZX50. The whole market has dropped a bit this year.