Arvida splashes out $180m on three luxury retirement villages in Tauranga and Queenstown

Tuesday, 25 June 2019

Aged care and retirement village operator Arvida has paid $180 million for three luxury retirement villages including the Queenstown Country Club, pictured.

One of the largest aged care and retirement village operators, Arvida, is buying three luxury retirement villages for $180 million, in Tauranga and Queenstown.

Arvida said it was buying Bethlehem Shores, Bethlehem Country Club in Tauranga and Queenstown Country Club for approximately $180m from Fraser Sanderson, a long-term developer of high-quality retirement villages in New Zealand.

The purchase would add 326 independent living units to Arvida's portfolio of 3677 units and beds.

The villages also offered the opportunity to develop another 504 units, Arvida chief executive Bill McDonald said.It meant Arvida would increase its target build rate from the 2021 financial year to more than 250 units a year.

The Commission for Financial Capability (CFFC) monitors the retirement village industry.

* Retirement village operator Arvida ramps up its building programme to $600m and doubles its profit**

McDonald said Arvida planned to introduce care suites in developing premium care at Bethlehem Shores and Queenstown Country Club in line with Arvida's strategy of having a continuum of care.

The acquisition was expected to be completed on July 31, 2019.

The company owns and operates 29 retirement villages, with more than 4000 residents, and offers a range of accommodation from independent living units to full rest home, hospital and dementia care.

Sanderson said the villages were the pinnacle of his life's work.

Two of the villages bought by Arvida are in Tauranga, Bethlehem Shores and Bethlehem Country Club. Pictured is the lobby in the new clubhouse at Bethlehem Shores.

'It was important I found a safe pair of hands to look after them and my residents,' he said.

Queenstown Country Club was his newest and best village, he said.

Queenstown Country Club, Bethlehem Country Club and Bethlehem Shores were developed by Fraser Sanderson. Pictured is the interior of an independent living unit at Queenstown Country Club.

'It will arguably be the most prestigious retirement village that New Zealand has seen,' he said.

Arvida is paying for the three villages through raising $32m of bank debt and raising $152m of new equity in several ways.

The vendor was buying $10m of new Arvida shares, Arvida was raising another $50m by selling new shares in a 'placement' to wholesale private investors at $1.25 each, and it was raising $92m through offering existing shareholders the right to buy one Arvida share for every 5.7 Arvida shares held at $1.15 a share, the company said.

About two-thirds of Arvida's business is aged care rooms, suites and serviced apartments, occupied by retirees with more needs for services than those in independent-living units. It has a building programme of new units and care suites costing up to $600m over the next seven years.