OCA - Oceania Group - retirement villages

[Beagle]

Definitely a golden circle location in a top suburb. Still cannot believe they got planning permission. I used to occasionally jog along the waterfront as a student and had my snack and drink at Cliff Road/Glover Park. A nice little shopping area at St Heliers, it used have that coastal village vibe.

A Jewel of a spot and probably the units will be out of my price range when I become eligible to live there. I will press my nose against the fence and have whine from outside sometime too!

Yes...I know quite a lot, (more than I want to know but unfortunately I have too as a Trustee), about how extraordinarily difficult that can be. Residential development consenting on volcanic cones is best described as an exceptionally challenging process. Makes Boulcott street for another company look like short walk in in the park on a warm spring day. Highlights a key difference between the capabilities of the respective experts employed by the two companies and is something I haven't really thought a lot about until quite recently.

Mrs B and I did have a wee bit of a chat speculating about the pricing of the best apartments and what price they might command. Hard to put a figure on it...but...just for fun lets take a wild guess. OCA are reported to be spending $130m..lets allow for a contingency, (I know they would have already allowed for contingency's in the $130m figure) and suggest its $140m so if their development margin is 30% that suggests gross sale proceeds of ~$200m.

76 apartments and 31 care suites. Lets assume a care suite is on average about half the size and cost of an apartment so that suggests an average of approx $2.2m per apartment = $167m and $1.1m per care suite = $34m. Those numbers on an average basis for that area appear quite commercially feasible to me and suggests the premium north facing apartments with the most commanding views will be in the mid-late $3m range.

What's very cool is this whole development from beginning to end is effectively being financed at just 2.30% fixed for 7 years.

[Bjauck]

It certainly points to a a crack team behind the consenting process.

I thought a similar pricing for the apartments, if not a bit more if they are tempted to add a premium on to their normal margins. It would be a jump up from my South Auckland spot, but my locale is not its targeted market - although my holding in Oceania is on its way currently to boosting what I can afford when the time gets closer

[Waltzing]

with SUM blasting up i think SUM of us missed the boat on that one as to think we were holders a few years back and moved to this slower moving train... if MR B is right again it may be time to take some more. But SUM has really show where prices might go if this stock starts to fire up.

$4 million for the best views , a friend bought a property 20 years ago down the coast from moon bay and is now sitting well positioned and a view of the entire harbour out and across from rangi..

i think he paid , well but not much.

[Beagle]

If SUM do $110m underlying this year that's eps of 48 cents so at $9.74 that's a forward PE of 20.2 which is not unreasonable for the current market dynamics.

Once OCA build the trust and respect of the investment community that they're also a growth company and their different business model works ostensibly in a very similar manner I think we will see OCA rerated to a similar ratio. If they can do 10 cps in the 10 months of FY21, (annualized 12cps) that suggests 12 x 20 = $2.40 is plausible sometime in 2021 or 2022.

[Waltzing]

"sorry i should be zooming sweden about now i could not resist"

When MR B moves into his luxury apartment and settle down to write a "Beagles Best Dividend investor Guide" or some such and from where ever i am residing i will order my copy.

The PE is high but im not going to argue as valuing commercial property is not my area but i was surprised we did not get more for our commercial partnership property last year. The other partners did not seem to take my view that rental commercial property for professional practises should attract a premium.

These suites are a mix of private and commercial as they are attached to a health care service and as such should attract a premium price due to their locations.

By now some may have read the article on lock downs from WHO.

[winner69]

Right - no more tax / politics talk on this tread

So back on topic

With a booming property market (even the RBNZ wants it to keep going up) and low interest rates and with Oceania's plans coming to fruition the future is bright

For believers in relativity theory OCA share price at least $2.40 next year

YOU CAN'T HAVE TOO MANY OCA

[Beagle]

I believe the exact phrase we coined is "You can't have too many" Got to get in early and let the next 22 years of compounding growth fuel our ability to buy the best apartment at St Heliers so we can move into Eagles Nest...opps sorry, Beagles Nest when we're 80 and write that book. Could be called "Being a Dividend Hound"...taking a dogged approach to investment returns...does have a nice ring to it

[Leftfield]

For believers in relativity theory OCA share price at least $2.40 next year

YOU CAN'T HAVE TOO MANY OCA

Crikey! Seems like you and Beagle had a tab too much Coffee this morning?

[thebusinessman]

I believe the exact phrase we coined is "You can't have too many" Got to get in early and let the next 22 years of compounding growth fuel our ability to buy the best apartment at St Heliers so we can move into Eagles Nest...opps sorry, Beagles Nest when we're 80 and write that book. Could be called "Being a Dividend Hound"...taking a dogged approach to investment returns...does have a nice ring to it

If you could please write just a three or four page whitepaper now you'd probably help ~30% of the contributors to this board make a significant difference to their net wealth over the next few years!

Very happy with my OCA hold, bought about a third of my holding around 70c and another two thirds around 95c - might be buying a property near the end of the year and I'll be damned disappointed if I need to cash these up to do that! Alas, I now can't really afford to accumulate any more...

[Waltzing]

always leave 20% in cash