Metlifecare, one of New Zealand’s largest retirement village providers, delivered a solid financial performance for the year to June 30 despite challenges from the economic impacts of Covid-19.
The company has six villages in east Auckland – Dannemora Gardens in Botany Downs, Edgewater Village in Pakuranga, Fairway Gardens in Golflands, Highlands in Highland Park and new developments Clevedon Village and Pohutukawa Landing in Beachlands.
The company said in its 2022 annual report it recorded net profit after tax of $78.7 million, a decrease from the prior year’s $304.4m which it attributed to a change in fair value of investment properties and higher operating expenses as it increased the pace of investment for growth and absorbed inflationary cost pressures.
“While the residential property market softened through the year, continued strong demand for retirement living drove an increase in the average unit sales price for the period,” the report said.
“Demand drivers for retirement living remain strong overall as New Zealand’s older population continues to grow.”
Total assets have increased significantly by $889m to reach $5 billion, largely driven by the Selwyn acquisition and the completion of 199 new independent living units or care beds. In the last 12 months, Metlifecare bought six villages and a commercial laundry from The Selwyn Foundation, a charitable organisation focused on improving the lives of the older population.
While debt has risen by $384.8m to $742.6m, reflecting increased momentum in building the development pipeline, developing new units and villages and the Selwyn acquisition, the balance sheet remains robust, the company said, with gearing (debt to valuation) of 28 per cent. Net assets have increased to $2.1b, up 13 per cent on full year 2021 [FY21].
In December last year, Metlifecare issued New Zealand’s largest ever Sustainability Linked Loan, becoming the first operator in New Zealand and Australia to be fully funded by sustainable financing.
The loan followed the conversion of Metlifecare’s existing NZX-listed bond (MET010) to a Sustainability Bond and has increased Metlifecare’s bank debt financing flexibility and capacity to $1.25b.
“Our financing costs are tied to key sustainability goals which reinforces Metlifecare’s commitment to becoming an industry leader in sustainability,” the company said.
As to the company’s development pipeline, during the year it purchased a number of premium greenfield sites for future development which has expanded its geographic footprint. Clevedon was settled in September 2021 with 130 independent living units proposed and a 60-bed premium care centre.
Villages under development include Fairway Gardens at Pakuranga Golf Club. The village welcomed its first residents in June 2022 with the completion of 58 apartments in four low-rise buildings with sweeping golf course views. The Club House, which will provide communal areas and amenities, opens in early 2023. When complete the village will have 215 apartments and a 40-bed care centre.
Edgewater Village has undergone village regeneration [47 apartments, a 24-bed care centre and new amenities completed in FY22]. “It has been reinvigorated and modernised with new amenities, apartments and a care centre. This has concluded a three-year regeneration project [completed in April 2022],” the company said.
Also under development is Pohutukawa Landing which opened in the previous financial year [32 villas and village green pavilion completed in FY22]. “Residents will soon be able to enjoy their new amenity building The Anchorage, in addition to the Village Green Pavilion which opened in late 2021,” Metlifecare said.
“When complete, the village will have a mix of 185 apartments and villas, and a 36-bed care centre.”
