Investors eye rapidly changing NZ retirement village industry

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An American investor with US$500 million ($574 million) has been in New Zealand scouting for retirement village assets and meeting one influential banker.

Richard Hinchliffe, head of healthcare lending in ANZ's commercial and agri division, told the Retirement Villages Association yesterday that this was just one case of how increased competition for assets was apparent.

"Investors want to buy into the sector. I met the American investor last week. There's no shortage of investors," Hinchliffe said.

Competition, trouble getting skilled staff and sector regulations had been retirement businesses' biggest concerns, he said.

Hinchliffe said the sector was undergoing rapid change.

He wondered about changes to the sector, including the occupation rights agreement and operators taking 25 to 30 per cent of the elderly's money and keeping it when they buy into a village.

"There's no current pressure on these models. The media are better informed of the sector and they're following it. At the moment, I'm not seeing any pressure but certainly people are talking about it," hesaid.

ANZ lends to major retirement investors and developers, and New Zealand has three listed businesses with $5 billion of assets.

Hinchliffe said new-entrant retirement village developers needed big chequebooks because the costs of entry were high.

Consolidation in the pharmaceutical, medical and dental sectors could spread to retirement businesses, he said.

House prices peaking could mean retirement villages looking to other sources of income including in the rehabilitation, home care, primary healthcare and wellness areas, he predicted.