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  1. #3826
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    Lightbulb Good offering, great staff, and you certainly pay for it

    I went for a tour (with a few other family members) on Saturday... here are my thoughts in no particular order
    - It did feel fairly unfinished, with the tour guide having to explain what a few outdoor areas should look like, it seemed we were also only allowed in 1 apartment as well (I think we had another tour group or someone having to wait outside until we were finished as our group asked a fair few questions I felt, hence took longer... if they were all finished, why couldn't they have gone into another one I wonder...). We were also not able to see Level 2 - the care suites... despite the above, I feel the build was very well done (high quality) and had some well thought out features in it.
    - The show apartment felt fairly cramped (in some places) if I am honest, not terribly cramped, but a little tight around the bedroom areas for my liking, but I suppose they have to do this to squeeze as many as possible in, and it is a small site at the end of the day. ARV's units down the road I toured a year and a bit ago felt a bit more roomy.
    - I like how there will only be about 100 residents... this is a smaller offering I feel those will prefer to the hundreds and hundreds (perhaps thousand(s)) of residents filed into sum other villages (where walking to and from your apartment feels more like you are transiting through an airport terminal)... in return, these smaller more niche villages (alot of ARV's are also like this by the way) will be more costly (ie higher unit prices), but, in my view, it is worth the additional cost (and there are certainly enough people who can afford this offering)
    - The care suites [all and only on level 2] of which there are 40 odd start at $290k (I think it was this, 2 something) and go to $650k, the apartments of which there are 64 I think start at $750k (well $850k if you exclude the one 1 bedroom unit [lol] and go to $2.5m)... the DMF (same for both care suites and apartments I think) was pretty much the most expensive possible - 3 years, 10% each year, 30% total (ARV down the road was 30% for their apartments as well, but 7.5% over 4 years)
    - They have sold over 25% of the apartments, with the first residents moving in this week (two weeks later than previously announced "late may" move in date for the first residents). I didn't think this was terribly strong, but I felt interest was very strong so things will fairly swiftly take off from here. I doubt any settlements were in FY19. Of interest, ARV's village's apartments which were finished just over a year ago (25 or so I think) were sold for an average price of $997k, I would like to think OCA's average sell price will be more around the $1.3-$1.4m mark, helped by a few top end units priced at $2.5m. The lowest priced unit (1 bedroom - of which there is only 1 [lol] is $750k). All the rest are 2 bedroom or 2+ bedroom. I personal would have liked to see a few more 1 bedrooms, but this may have come at the cost of 2 bedrooms (which start at $850k - $100k more than the one 1 bedroom unit) and hence would have reduced the amount OCA receives.
    - I was intrigued with the Oceania's '3 month guarantee' where if the resident doesn't like their unit/village within this period, they can leave and get the money they paid or their unit back (I can't remember the exact name at this moment they used for it but there was a little stick on each book)... is this an Oceania wide initiative? If so, I would have thought this was mentioned in the booklet, not just a small sticker I had to inquire about.
    - Another person on our tour did point out (to the group) their is no pool... I nearly felt like interjecting and telling her she could consider the Arvida village down the road if one wanted a pool
    - Afterwards, we had a good chat to the village manager where we went down to see the underground carpark and further my understanding of the care suite side of things (although was not allowed to go see a show care suite on that day) ... their isn't a dementia part of this facility, but there is the other 2 levels: Rest home and hospital level, so this is pretty good... I nearly felt like mentioning that if one wanted Dementia level care, they [OCA] could recommend that person head 1km ish down the road to ARV's village [Aria Bay] which will soon have this (as well as rest home, hospital, serviced apartments, independent living units).

    Overall, I was impressed by the village and the village staff and pleased by the interest supposedly expressed. I do not think it is cheap at all, given I live in a 2 story 5 bedroom house with a great sea view, less than 2km away from the village, and on one of the most desirable streets in browns bay (so they say), and it is 'only' worth $1.5m (in today's market), but given the villages niche offering and desirability it will likely still sell well.

    Disclosure: Before I am accused of favoring ARV heavily, please note I own substantial amounts (for me anyway) of both ARV and OCA, although do have a higher holding in ARV... I have been a shareholder of both since day 1 of their respective listings.
    Last edited by trader_jackson; 11-06-2019 at 01:22 PM.

  2. #3827
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    Quote Originally Posted by trader_jackson View Post
    .....I do not think it is cheap at all......
    Great post Trader. Thankyou for taking the time to pass on your experience. I agree with all you have said and my tour experience was similar.
    As you probably know I come from a provincial town so its good to get your local view.
    A miss conception which may exist out there about this particular block is that its` focus is on late stage health care (OCA`s point of difference). IT IS MOST CERTAINLY NOT! It used to be a Salvation Army and older rest home site but now has been transformed to high end living.
    Browns Bay is all about accommodating the the "rich and famous."- So are the units cheap? Hell no, but as you predict, they should sell just fine.
    One last point to add- these units are available to anyone over 70 yrs old. I see this lower age as a tool used to widen the customer base, rather than dropping the price) and this age limit will no doubt ratchet up when the units start to fill up.
    Personally , I applaud any company that focuses on service and quality allowing a premium price tag. (i.e the opposite of WHS).
    Once again Trader Jackson, I rally do appreciate you taking the time.

  3. #3828
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    Quote Originally Posted by Maverick View Post
    Great post Trader. Thankyou for taking the time to pass on your experience. I agree with all you have said and my tour experience was similar.
    As you probably know I come from a provincial town so its good to get your local view.
    A miss conception which may exist out there about this particular block is that its` focus is on late stage health care (OCA`s point of difference). IT IS MOST CERTAINLY NOT! It used to be a Salvation Army and older rest home site but now has been transformed to high end living.
    Browns Bay is all about accommodating the the "rich and famous."- So are the units cheap? Hell no, but as you predict, they should sell just fine.
    One last point to add- these units are available to anyone over 70 yrs old. I see this lower age as a tool used to widen the customer base, rather than dropping the price) and this age limit will no doubt ratchet up when the units start to fill up.
    Personally , I applaud any company that focuses on service and quality allowing a premium price tag. (i.e the opposite of WHS).
    Once again Trader Jackson, I rally do appreciate you taking the time.
    Yup, it is very much transformed from the rest home that it was that is for sure... totally different product... But some saying it is a 'bargain for the area' and 'cheap' are telling porkies I reckon... it is neither of those, but service and quality are right up there that is for sure. By the way, the age of entry for the care suites is actually 65.
    I got brochures on both the care suites and apartment living.
    Last edited by trader_jackson; 11-06-2019 at 11:46 AM.

  4. #3829
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    Thanks for a well-written and objective report trader_jackson, I appreciate it and am sure many others do too.

  5. #3830
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    Quote Originally Posted by trader_jackson View Post
    By the way, the age of entry for the care suites is actually 65.
    Cheryl the sales lady told our group it was 70 yrs so maybe the ratcheting has already begun

  6. #3831
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    Quote Originally Posted by Maverick View Post
    Cheryl the sales lady told our group it was 70 yrs so maybe the ratcheting has already begun
    Are you sure she wasn't talking about the apartments? they are 70 years for sure.
    I'll have to check the brochure when I get home to ensure I did see 65 years of entry for the care suites.

  7. #3832
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    Quote Originally Posted by trader_jackson View Post
    Are you sure she wasn't talking about the apartments? they are 70 years for sure.
    I'll have to check the brochure when I get home to ensure I did see 65 years of entry for the care suites.
    My bad. I didn't realise there was a difference between them

  8. #3833
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    Thanks Maverick and Trader_Jackson for both reports, it helps a lot to read that when working from a desk in Wellington. If you guys were close enough I would be cooking an argentinian asado for you.

  9. #3834
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    Quote Originally Posted by MauroNZ View Post
    Thanks Maverick and Trader_Jackson for both reports, it helps a lot to read that when working from a desk in Wellington. If you guys were close enough I would be cooking an argentinian asado for you.
    Cordero o vaca ?? :-) Maybe you should do that for the next opening in Wellington to welcome new owners :-)

  10. #3835
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    Quote Originally Posted by iceman View Post
    Cordero o vaca ?? :-) Maybe you should do that for the next opening in Wellington to welcome new owners :-)
    Ambos . As you are in Nelson you will see in photos.

  11. #3836
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    For anybody out there interested, Goose (also a serious share holder) and I have since visited Lady Allum (AKL north shore)and Trevellyn (Hamilton)a few days after the Sands. The purspose was to see how OCA was doing in a less spectacular area than what "The Sands" is. Also to observe these slow rebuilds within existing villages as opposed to starting again from scratch. Here are some key points from our observations and discussions with staff....
    -OCA modus operandi seems to own functioning dated rest homes in well healed and geographically elavated/ desirable areas and then systematically replace them with multi level high end accomodation. The result is a premium product with superior views in a wealthy catchment.
    -They bowl over the low density villas etc and replace them with 3x the dwelling density.(multi story)
    -Their target customers are definitely the high end from the area and these areas can afford the high price tags.
    -Staff are very happy to a surprisingly high degree with their superiors and village developers.
    -unit/ apartment design is continually evolving and improving in consultation with staff on the ground.
    -at Lady Allum, the fairly recent completed , classic OCA, new multi story apartment development (approx $1 million each) are all full except one. This is without even the community center being built yet (a key cornerstone to any village to get new customers) ,also no pool or bowling green. They receive constant requests for units over the whole village of which they have to turn away because of no vacancies. They have five more years of development ahead of them and bought houses around them to continue expansion as required.

    To conclude, I remain convinced OCA is a company who know what they doing and are doing it exceptionally well. I believe they have more than enough demand for their high end product as it comes online.

    PS, I have figured they don't bother with pools or bowling greens in these areas as land is such a premium, it's not stifling demand and it surely allows them to put in another bunch of dwellings instead. I'm told by staff the oldies don't use the pools anyway. Perhaps that's one reason they can get 30% development margin.

    Anyway , im super happy with OCAs staff, business model,execution and product.
    Last edited by Maverick; 13-06-2019 at 09:51 PM.

  12. #3837
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    Thanks for doing the legwork and sharing. Slight sidetrack i read in a westpac handout that(right or wrong) they expect a 7% rise in NZ prop prices in the next year citing removal of cap gains tax , low interest , immigration etc.

  13. #3838
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    Quote Originally Posted by Maverick View Post
    For anybody out there interested, Goose (also a serious share holder) and I have since visited Lady Allum (AKL north shore)and Trevellyn (Hamilton)a few days after the Sands. The purspose was to see how OCA was doing in a less spectacular area than what "The Sands" is. Also to observe these slow rebuilds within existing villages as opposed to starting again from scratch. Here are some key points from our observations and discussions with staff....
    -OCA modus operandi seems to own functioning dated rest homes in well healed and geographically elavated/ desirable areas and then systematically replace them with multi level high end accomodation. The result is a premium product with superior views in a wealthy catchment.
    -They bowl over the low density villas etc and replace them with 3x the dwelling density.(multi story)
    -Their target customers are definitely the high end from the area and these areas can afford the high price tags.
    -Staff are very happy to a surprisingly high degree with their superiors and village developers.
    -unit/ apartment design is continually evolving and improving in consultation with staff on the ground.
    -at Lady Allum, the fairly recent completed , classic OCA, new multi story apartment development (approx $1 million each) are all full except one. This is without even the community center being built yet (a key cornerstone to any village to get new customers) ,also no pool or bowling green. They receive constant requests for units over the whole village of which they have to turn away because of no vacancies. They have five more years of development ahead of them and bought houses around them to continue expansion as required.

    To conclude, I remain convinced OCA is a company who know what they doing and are doing it exceptionally well. I believe they have more than enough demand for their high end product as it comes online.

    PS, I have figured they don't bother with pools or bowling greens in these areas as land is such a premium, it's not stifling demand and it surely allows them to put in another bunch of dwellings instead. I'm told by staff the oldies don't use the pools anyway. Perhaps that's one reason they can get 30% development margin.

    Anyway , im super happy with OCAs staff, business model,execution and product.
    Very nice report Maverick, thanks a lot for sharing it.

  14. #3839
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    Thanks for the reports on the other villages.

    Down my neck of the woods Windemere is making good progress. Workers out there early morning under lights. Every day there are new bits poking above the fence line.

  15. #3840
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    Annual report is due out in about five weeks time. I,m picking 55.1 million underlying profit.5.6% up on last year. That's a PE of 11.5 at $1.04. (I'm hopeful the market might be pleasantly surprised as low expectations are already baked into the share price)
    The result will be pretty unremarkable as their new units delivered will be mostly empty at this point. I'm thoroughly convinced the company will do very well indeed in the years to come but at this stage the underlying results will most likely appear very sluggish.
    Last edited by Maverick; 15-06-2019 at 07:02 PM.

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