Summerset plans $290 million investment in two new villages

By Paul McBeth

June 4 (BusinessDesk) - Summerset Group has bought land to build two new retirement villages, and expects to invest about $290 million developing the sites.

The retirement village operator and developer bought an 11-hectare site in Whangarei and an eight-hectare property in Cambridge for undisclosed sums. Summerset expects each new village to have more than 200 units and about 70 serviced apartments, plus rest home and hospital care facilities.

The company will spend about $150 million developing the Cambridge site and $140 million on the Whangarei village.

"In the last 18 months we have focused on buying a mix of broadacre sites in urban fringe locations, retirement destinations, and high growth regional centres," chief executive Julian Cook said in a statement.

"When added to our urban sites such as Ellerslie, St Johns, Parnell, and Lower Hutt we have a good mix of new villages across New Zealand."

The company noted the impact of slowing housing markets in Auckland and Christchurch in its first-quarter sales, but moved to reassure shareholders at its annual meeting in April that demand for its product remains robust and will continue to grow over time.

The two new acquisitions take Summerset's landbank to 12 properties, and it has 26 villages operating or under development.

The Cambridge acquisition is subject to Overseas Investment Office approval.

Summerset shares last traded at $5.54, and are down 24 percent over the past 12 months.

(BusinessDesk)

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