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  1. #91
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    Thanks for sharing this and it is interesting what he says.

    Although it is true what he says regarding care units being substantially less profitable, ARV does have a substantial number of independent apartment units as well, so it is not solely care based, as the article would imply. It could also benefit from potential economics of scale and synergies of bring many villages together, therefore lowering costs per person in care, and improving the margin, although this is still not going to be anywhere near as profitable as license to occupy I realize.

    ARV is also actively looking for other high quality villages, that will increase EPS and dividends per share (like Aria villages did), which will also further boost economics of scale and synergies.

    From a more macro point of view, What people seem to be missing in the whole retirement sector, is that increasingly people are living longer (less turn over = less profit for the licence to occupy, and more people needing care as they get older - ie care beds). ARV is well placed to capitalize on this, having quite a few care beds, while other retirement villages could fail to meet these ambitious growth plans, some have even pointed out there could be a short-medium term oversupply of villas.

    Aside from this, old people are getting more tech savvy (accessing forums such as this) and realizing just how much money these big retirement villages are ripping them off by, this combined with a potential oversupply will force those who are heavily exposed to having to sell villas into potential discounting, or other benefits (for example buy a licence to occupy off SUM instead of MET as they offer a fixed fee for life - this has already happened and now pretty much all villages have this - lets hope inflation doesn't take off right?) Where are the discounts/benefits going to come from next? ARV doesn't have to worry about this potential intense competition and has a higher % occupancy, further increasing benefits.

    Anyway, this is a very 'big' look at the picture and ARV is a long term game for me, with short term benefits (ie the dividend). SUM may be the stay this year, but in a decades time potentially not so much. Ryman could be the only village I would consider selling ARV for (if it gets back down to a more fair value of around $6), as they will also continue to do well as I know they have a strong care focus.

  2. #92
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    Chris Lee hit the nail on the head. Your "rebuttal" was cute though, T_J

  3. #93
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    Quote Originally Posted by OldGuy View Post
    Chris Lee hit the nail on the head. Your "rebuttal" was cute though, T_J
    Chris Lee clearly hasn't visited or talked to those who work in retirement villages, nor able to look into the long term future to much

  4. #94
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    Quote Originally Posted by trader_jackson View Post
    Chris Lee clearly hasn't visited or talked to those who work in retirement villages, nor able to look into the long term future to much
    FACT.
    Chris Lee has been involved with a retirement village on the Kapiti Coast for a very considerable time.
    Most probably one of NZ's most experienced people in the sector.

  5. #95
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    I apologize, and take that back then. I went to a retirement village in the Bay of Plenty recently (and have previously talked to relatives who have worked in/near the industry), it was surprising to me two things: that people are living longer (less resales = less license to occupy turnover), and how many people increasingly needed care.

    Given Chris's extensive involvement in the industry, I am therefore extremely surprised how short sighted his article on ARV is, given he has not appeared to considered to many macro factors affecting the sector in the long term. There are some ARV villages around the Kapiti area

  6. #96
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    Have you considered with people living longer they may actually be leaving it longer before they enter a retirement village?
    I forget the details, but I do seem to remember the age people joined a RYM village was a lot older than I expected.

  7. #97
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    Quote Originally Posted by percy View Post
    Have you considered with people living longer they may actually be leaving it longer before they enter a retirement village?
    I forget the details, but I do seem to remember the age people joined a RYM village was a lot older than I expected.
    Yes, could certainly happen, it is quite scare for those companies who are heavily in debt and heavily rely on sales and resales of their units to those who are able to not have to have care (and the costs of construction and refurbishment that go with that), to make money (hmm SUM...), they do make alot of money of this, but the days of 'easy money' could be numbered (anyone ever considered this?)

    While those who don't need care may choose to live on there own (like my own grandad, as like many people going into retirement these days, they understand just how much money retirement villages suck out of them and their inheritance), those that will need care, will need care, and this will increase in steady numbers, ARV is well positioned to capitalize on this, while also benefiting from having a few (in comparison to other listed operators), but very high quality villas to resell (not that there's that many to resell as the occupancy rate is so high!).

    SUM and MET (and potentially RYM) are not retirement villages... they are property development companies
    Last edited by trader_jackson; 04-12-2015 at 03:53 PM.

  8. #98
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    Quote Originally Posted by trader_jackson View Post

    SUM and MET (and potentially RYM) are not retirement villages... they are property development companies
    Yes,and on completion of each village the sale of occupancy rights gives them the capital for the next village,while retaining ownership of each village.
    Compounding.
    Inheritance.Safety,security,and comfort is what attracts people to retirement villages.Total care.It is their money to choose how to spend it.Would be great to die having spent the lot.!!! lol.

  9. #99
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    Good to see some free advertising for Arvida on 3 news just a few minutes ago... helping residents get active

    http://www.3news.co.nz/nznews/rest-h...#axzz3t6pIb6Nf
    Last edited by trader_jackson; 04-12-2015 at 05:53 PM.

  10. #100
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    Quote Originally Posted by percy View Post
    Have you considered with people living longer they may actually be leaving it longer before they enter a retirement village?
    I forget the details, but I do seem to remember the age people joined a RYM village was a lot older than I expected.
    Mid 70's.. Still working in Physical job.. 40 plus hours..

    Still keeping the much younger woman very happy :-))

    Who needs a retirement village ???

    Or even ignite .. !!

    Aye percy :-)))

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