Retirement Villages Development - Investment Synopsis

Background

New Zealand is well-known for its care of retired people. There are both publicly listed and private operators of Retirement Villages and most are increasing their build rates to meet the growing demand of New Zealand’s ageing population. There is also an increasing interest of people, who are approaching their retirement, coming here from other countries and who view New Zealand as an attractive destination for their retirement. Over the next twenty years the change in the retired age of New Zealand’s population is anticipated to almost double from 6% to 11%.

Investment Summary

TPS Capital is seeking the interest of investor/s to develop a number of luxury retirement villages situated in prime regional locations within easy driving distance of Auckland City. The proposed development/s are seen as an ideal opportunity for astute investors to capitalise on the growing demand for luxury retirement facilities to cater for both New Zealand’s growing retirement population and for retirees from other countries.

The investor/s would acquire a half share in each regional retirement village including the village hospital. The company has obtained approval for all the appropriate local government resource consents required. The company is looking for development finance of approximately US$15 Million to US$20 Million. Investor/s will be allocated preference shares in the venture through a new Special Purpose Vehicle (SPV) agreement.

Investors will acquire a half-share in the development company, and when the development is completed their share will convert to 50% equity in the retirement village Holding Company. There will be a reasonable return from the sale of units from the development company which could then see the bulk of the investment returned over a period. This would then convert to a long term share in the Holding Company yielding a steady annual dividend. It is anticipated that this investment model will produce higher than average returns. In the right locations, as is the case for this investment, the expectation is that the sell down period is likely to be relatively short. Effectively with this financial model, excellent cash flow may be realised providing returns that are consistent with having fully paid-up shares in the Holding Company. Long term, there could be the downstream potential for launching an IPO.

The Development Company

The company is a privately-owned New Zealand development company, with many years of experience, and has an excellent reputation for developing and operating high-value, quality, coastal waterway properties, retirement village facilities and operations. The activities of the company are supported by in-house design, consultation, civil construction, marine facilities, retirement living and project management solutions.

Project Overview

This retirement village concept development has a mix of 200 residential accommodation units comprised of:
  • villas
  • terraced villas
  • apartments and
  • serviced apartments
  • plus a separate care hospital
  • all to be built within an existing high-quality sub division
A six to twelve month lead time is envisaged. This will include time to finalise design concepts, complete working drawings and the obtaining of building consents.