$100m retirement village deal gets green light

Summerset owns 1200 retirement village units. Photo / Supplied

A $100 million-plus retirement village deal has received foreign investment approval.

Two Australian-controlled companies are involved in the transaction of mainly North Island villages and land.

The Overseas Investment Office (OIO) approved a deal for Australia's QPE Funds Management, manager of Quadrant Private Equity No 2A and No 2B Funds, to buy out AMP Capital Investors' stake in Summerset.

Summerset is New Zealand's third-largest largest retirement village developer and operator behind NZX-listed businesses Ryman Healthcare and Metlifecare.

QPE, which now owns 48.8 per cent of Summerset and 50 per cent of the management business, got approval to buy a further 48.8 per cent of Summerset from AMP and get full control of the management company.

Details of the Summerset deal were released this week by the OIO which said assets were worth more than $100 million because the chain had 18 retirement villages and development sites.

Summerset, with 450 staff, says it owns 1200 retirement village units - villas and apartments - and more than 300 rest home and hospital beds.

It has 14 development sites and villages in the North Island and has plans to build in Dunedin and elsewhere in the South Island, it says.

Statistics New Zealand estimates the number of people aged 65-plus will grow by about 100,000 to reach 566,000 next year. Summerset wants to capitalise on that and have 20 villages operating or under development by 2012, developing about 150 units annually.

The OIO listed eight sites in the Quadrant/AMP deal which were classified as sensitive: 5ha at Palmerston North's Ruapehu Drive, 7ha in Katikati's Park Rd, 9ha in Waimauku's Joyce Adams Place, 6ha on Paraparaumu's Realm Drive, 6ha on Warkworth's Mansel Drive, 2ha in Dunedin's Shetland St, 7ha in Hamilton's Dixon Rd and 5ha on Trentham's Racecourse Rd.

The deal got approval because it met the terms of the Overseas Investment Act 2005 by adding market competition and productivity and creating or retaining jobs.

The OIO has approved 28 deals this year, down on the 55 through by this time last year.

Last year's net investment of $55.6 million in the first four months rose to $194 million in the same period this year.

Goodman Nominee (NZ), associated with the NZX-listed Goodman Property Trust, got consent to buy 1.9ha of leasehold land at 60 Westney Rd in Manukau from New Zealand interests.

The sum involved is secret and the vendor is Workstore Developments.

Australian-owned national hardware/DIY chain, Bunnings, got approval to buy 3.3ha of land at 18 Hibiscus Coast Highway, Silverdale for a confidential amount. The chain, owned by ASX-listed Wesfarmers, is buying the land from Rodney District Council.

Bunnings wants to develop a 6000sq m hardware and building improvement shop there, operating it under the Bunnings Warehouse brand.

Tegel, the Australian-controlled poultry business, wants to free up capital by selling its land here to a New Zealand company which will lease property back to Tegel.

The $133.2 million deal will see Australia's NZ Poultry Enterprises sell nine properties to Manu Fund. The first deal in this transaction is 3.4ha of land at 250-270 Flanagan Rd and 95 Tegal Drive at Drury, Papakura.

Tegel has turkey and chicken breeding, hatching, feeding, growing, processing and marketing operations in New Zealand, selling fresh, frozen and cooked products.

The business plans to sell Manu all its nine freehold properties on long-term sale-and-leaseback terms.

"The sale and lease-back of the properties will enable Tegel to free up capital to invest and fund other capital investment projects while still providing security of tenure for its breeding, hatching, rearing, growing, million and processing operations," the OIO said.

Britain's Kaimai Resources got approval to buy herb and salad vegetable interests from New Zealand's Philip Enterprises and Lund Rd Property for $2.1 million. Sensitive land involved is 14ha at Lund Rd, Katikati.

RobMiJon Holdings of the United States got approval to buy 182ha of land near Masterton from New Zealand's Mangapakeha Forestry Co for $225,000.

Migrants from China got approval to buy 3.5ha of land at Okura from New Zealand interests for $3 million.

BIGGEST SO FAR
* This year's largest foreign investment deals were:
* Amalgamated Holdings' $42.3 million purchase of SkyCity Cinema's assets.
* The Saint James Company's $34 million purchase of vineyard and land assets.
* CSG's $23.2 million purchase of Leasing Solutions and Oncesource Group.

Source: Overseas Investment Office