Arvida Queenstown is on the Frankton-Ladies Mile Highway at Frankton. Photo / Arvida Group
Arvida Queenstown is on the Frankton-Ladies Mile Highway at Frankton. Photo / Arvida Group
Fast-expanding listed national retirement giant Arvida Group, in which some ex-All Blacks invested, has declared rising assets now totalling $4 billion and operating earnings up 15 per cent to $39 million in its latest half-year.
The Auckland-headquartered business, headed by Jeremy Nicoll, has pushed up asset value by10 per cent, from $3.6b last year.
That rise is due to land and development activity and little change in valuations at the company’s 36 retirement villages.
“Independent valuation firms CBRE and Jones Lang LaSalle expressed confidence in an improved outlook for the housing market, reverting their near-term house price growth assumptions to be more in line with historical growth assumptions when assessing the value of investment property,” the company said today.
Announcing its result for the six months to September 30, 2023, Arvida said net profit after tax was up 1 per cent from $89.2m to $90m.
Ex-All Blacks Dan Carter, Richie McCaw and Kieran Read were reported to have bought into the business when it listed on the NZX in 2014.
Asked if those famous former footie greats players were still shareholders, Nicoll said: “There were a whole lot of Canterbury rugby players who invested into syndicated retirement villages which we then bought, so they swapped their equity for Arvida shares. After nine years, some do and some don’t still own shares.”
Valuers haven’t hammered this company like they’ve done with other businesses lately: revaluations only fell 1 per cent from $88.6m to $87.9m.
“Increase in employment costs reflects legislated minimum wage rate increases, commissioning of new care centres, investment in people and technology teams, leave provisions and general wage increases,” the company said today.
Arvida, like many other retirement businesses, keeps 30 per cent of elderly people’s purchase price when they leave, such as from dying or getting ill.
Arvida has more people living in its villages.
Jeremy Nicoll, Arvida Group chief executive, said the company is in a post-Covid recovery phase. Photo / Arvida Group
“Occupancy is improving but continues to be impacted by nurse shortages in some regions,” it said. Occupancy now stands at 94 per cent, up from 93 per cent previously.
The company also is keeping more money on the resale of existing places: it took $17.4m deferred management fee in the latest half-year, up on the previous $16.4m.
Nicoll said the business had continued to perform well in tough operating conditions and a slow housing market.
”As the past few years have demonstrated, the need to remain responsive to market conditions is essential for continued business performance.
“Our ability to adapt as circumstances have required has enabled the business to grow while we have focused on restoring profitability,” he said today.
The company recorded 285 sales in the latest six months: 102 sales of new properties never lived in before and 183 resales.
Compared to the prior corresponding six-month period, the gross value of sales was up 2 per cent to $171.4m.
Arvida's Aria Bay, Auckland. Photo / Arvida
“This is a normalisation post-Covid, despite higher interest costs, inflation and a weak residential housing market. The positive aspect is that we are seeing things starting to turn,” Nicoll said.
Arvida bought a village at Frankton, Queenstown when it had 15 villas: “Since then, we’ve built more villas, added on a clubhouse for the community and we’re most of the way through a new care and apartment building,” Nicoll said. That would have 62 beds and 29 apartments.
That was due to open next August.
The new hospital at Bethlehem Shores in Tauranga was under construction. Last week, the podium slab was poured. Around 55 care suites and 55 apartments were being built in a three-level block, rising to four levels at one point.
The outlook appears chipper too.
“Early signs of an improving operating environment are emerging, with leading indicators pointing to the beginnings of a recovery in the housing market, less uncertainty present in the economic outlook and clearer government policy for the aged care sector and business generally.
“The demand for quality retirement living options and aged care remain compelling.”
The board, chaired by Anthony Beverley, is paying a dividend of 1.2cps to December 21. No forecast had been made of the full-year dividend.
Shares have been trading down only 11 per cent annually, around $1.06.
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.
