Retirement village firm on Auckland land search

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Wellington-based Summerset, a retirement village company that has been tipped as a possible candidate for an initial public offer (IPO) this year, is actively looking for property in the Auckland area as part of its growth strategy.

The company is 98 per cent owned by Australia's Quadrant Private Equity. Sydney-based Chris Hadley, who is managing director of the A$1.5 billion fund, was unavailable for comment to the Herald.

Summerset chief executive Norah Barlow, who spoke to the Herald on condition that the company's capital structure would not be discussed, said Auckland was a key area of focus for its future growth plans.

The company operates along similar lines as market leader, the listed company Ryman Healthcare, which designs, develops and operates retirement villages throughout New Zealand.

Summerset and another retirement village company, Vision Senior Living, will be competing head-to-head for investment dollars if their respective initial public offers go ahead.

However, an investment banking source said there was room for two.

Barlow said Summerset's new village in Manukau would be completed this year and a planned village at Karaka was going through the planning consent process.

"We are actively seeking land throughout the Greater Auckland area," she said.

Summerset was established by Kapiti Coast entrepreneur John O'Sullivan and his wife Rose, who built their first retirement village in 1997. O'Sullivan was a client of Barlow's when she had her own accountancy firm.

She joined Summerset in 1999 as group accountant and became chief executive in 2001.

By 2005, the company was running along corporate lines, with 60 shareholders and seven villages. AMP Capital Investors bought the company for $125 million in 2006 and tried to launch it as an IPO in 2007. AMP withdrew the IPO due to what it said were adverse market conditions.

Quadrant bought half the company in 2009 and went to 98 per cent ownership in the following year. Management owns the remaining 2 per cent.

This year Summerset has started in Hamilton, has bought land in Nelson, and is going for resource consent in Dunedin. Vision Senior Living has a lifestyle element to it, while Summerset also offers continuing care facilities.