OCA - Oceania Group - retirement villages

[herbert240]

Rate set day tomorrow for the bonds http://nzx-prod-s7fsd7f98s.s3-websit...397/331562.pdf
Could we see a new all time low for 7 year bonds issued in N.Z. of under 2% ?

Chris Lee is saying around 2.30%...will be interesting.

[winner69]

Chris Lee is saying around 2.30%...will be interesting.

Summerset get 2.3% pa a few weeks ago but rates outlook lower now

Ark et might see Oceania slightlier riskier and price accordingly

One thing about these low rates is that the expected overall long term investment returns (bonds and equities) are now much lower than in the past ...punters happy to make any sort of return over the long term. To make excessive returns one will need to do a bit of good stock picking and trade those accordingly.

[Greekwatchdog]

New development starting. Paywall. https://www.nzherald.co.nz/business/...ectid=12368826

[winner69]

In an old file found sector price / book ratios as at 2018

Updated them for current situation .., two and half years on

P/B ratios March 2018 v Oct 2920

SUM —— was 2.0 / now 1.8
ARV -—— was 1.3 / now 1.3
RYM —— was 3.0 / now 3.1
OCA —— was 1.2 / now 1.2

Amazing eh ...in spite of all the ups and downs of each and how punters feel the relativity has hardly changed in those two and a half years....RYM rerated slightly up and SUM slightly rerated down and ARV and OCA unchanged.

Not unexpected ....just the natural order of things ....or in crude terms the pecking order.

Because the four will never ever trade at the same multiple I’d say the pecking order (price relativity) is unlikely to change for a long time (if ever)

Pretty amazing eh

[Beagle]

New development starting. Paywall. https://www.nzherald.co.nz/business/...ectid=12368826

I think they did exceptionally well to get consent to build on that site. As one of my most successful clients has found out, its exceptionally hard to get consent to build on any site that has volcanic origins and an outstanding natural feature overlay under the Auckland District Unitary plan. I note the high independent living apartment to care suite ratio and I would think the premium north facing units with commanding harbour views will be priced accordingly ($3m+ ?) for the St Heliers area but still be in very high demand from elderly people looking for a luxury care free lifestyle and for whom money is no object, (of which there are many in that area).

"Oceania's head contractor is now preparing the 1.3ha block of St Heliers land for a $130 million six-level retirement village with rest home suites bigger and with more facilities than traditional smaller hospital rooms in other retirement villages....The site also has extensive views across the inner harbour to Rangitoto Island.
Gasparich said: "Oceania won consent to build 79 independent living apartments and 31 care suites on the site with completion expected by March 2023".

[Bjauck]

I think they did exceptionally well to get consent to build on that site. As one of my most successful clients has found out, its exceptionally hard to get consent to build on any site that has volcanic origins and an outstanding natural feature overlay under the Auckland District Unitary plan. I note the high independent living apartment to care suite ratio and I would think the premium north facing units with commanding harbour views will be priced accordingly ($3m+ ?) for the St Heliers area but still be in very high demand from elderly people looking for a luxury care free lifestyle and for whom money is no object, (of which there are many in that area)

The street has great views. Incredible that they got consent for such a high density development in a sensitive geological location in one of the most expensive parts of Auckland.

Watch out Aucklanders. Do you like the ambience of your neighbourhood? Multi-level density is coming to a place near you!

Those ORA units, when available, will have to be the most expensive in the country.

[Beagle]

Yeah agreed, incredible ! I think the development follows the natural contour of the site...something that I am aware is critical to the success of any application to build on sensitive volcanic sites with the outstanding natural feature overlay. Minimizing earthworks is also of upmost importance. I probably haven't really given enough thought to the value of this consent and OCA's overall consent approval status which is a bit of a slip up on my part given my first hand knowledge of the difficulties involved.

Page 9 of the annual report...OCA got a remarkable 603 units, (inclusive of this very challenging site), consented during FY20 and that in a year impacted heavily by Covid !
That's a remarkable accomplishment in the circumstances ! 85.7% of their development pipeline is now consented. http://nzx-prod-s7fsd7f98s.s3-websit...346/331468.pdf

I sometimes wonder if the CEO coming across as a really nice person of upmost integrity in these consent hearings makes a difference, remember how well Simon Challis has done with consenting for Ryman over the years ! I've only had the pleasure of meeting Earl Gasparich once but he made quite an impression on me and many others I know that attended the NZSA presentation he spoke at. Maybe being a really nice affable person comes across to others and is the X factor that makes the difference ? (as well as good consultants, planners and architects of course).

[Maverick]

Nelsons Green Gables had their official opening party last Friday. In their blurb I see they make a point of advertising their weekly fees as fixed for life (RYM do ,SUM dont, ARV I don`t know).
I`m very pleased OCA take this view as I know a good friend of mine at RYM really values the " illusion of security" this gives him.

[Beagle]

I'm curious why you think fixed fees for life gives an "illusion" of security mate ?
My research on this subject is much more extensive than I can go into on this forum and I can assure you that old folks really put a very high value on the security this gives them.

Elderly vulnerable people face so many uncertainties in their lives. How long will I live, how will I be cared for, will I fit into this village, will I make friends, will my family come and see me, will I be happy here e.t.c.e.t.c. One of their biggest fears is can I afford to live comfortably AND well ? Apart from food, their weekly fees are their biggest expense so its impossible to overstate the importance to many people of locking this cost down permanently for the rest of their life.

Many people from this generation have grown up budgeting every last cent, (something that's completely lost on most people today) and put a tremendous value on the financial certainty that locking down their weekly fees gives them.

[Baa_Baa]

The weekly chart log scale is a thing of beauty, so good I’m not going to post it in case I jinx the rerate. Honestly, as I’ve said before you take your eye off this and it just creeps away and you wonder wtf happened! Still can’t believe it went under .40 during covid, what a gift, I didn’t get it that low but went oversized on the way up. Still a gift imo.