Metlifecare sells Wairarapa retirement village, focuses on upper North Island for growth

Metlifecare [NZX: MET] sold its Wairarapa retirement village for $6 million as it focuses its expansion on the upper North Island.

The Auckland-based company, which operates 25 retirement villages and nine care facilities nationwide and employs more than 1000 staff, said the sale will be settled on June 30, subject to approval from the village's statutory supervisor and the transfer of Ministry of Health and district health board contracts within the village. It didn't name the buyer.

"Wairarapa Village operates in a market that has lower opportunities for growth for Metlifecare, due to local market dynamics and a less attractive real estate environment," Metlifecare said in a statement. "This agreement presents an opportunity to reallocate the capital receipted from this sale to continue the company's focus on greenfield and brownfield developments in high-growth areas that represent stronger future yields."

In February, Metlifecare posted a first-half profit of $125.7 million, more than triple 2015's result, and mainly due to the impact of booming property prices in Auckland and Bay of Plenty. 

At the time, then chief executive Alan Edwards said the company's low level of debt and significant funding headroom allowed it to seek further opportunities.

"With the number of New Zealanders aged over 75 years expected to almost double in the next 30 years, the bulk of them in the upper North Island, Metlifecare’s development pipeline is strategically focused in these regions," he said.

Metlifecare had 307 units under construction as of December 31, up 55% on the previous period. During the half, it completed 41 units and 36 care beds. The company expects to deliver a further 28 units in the second half at Oakridge Villas in Kerikeri and Papamoa Beach Village in Bay of Plenty.

The overall target is to deliver a range of 105 to 160 units and beds in the 2016 financial year depending on the timing of 55 units at Greenwich Gardens in Auckland, due for completion in July. Metlifecare’s development pipeline is 2,184 units and beds, up 50% on a year ago.

The shares last traded at $5.34 and have gained 15% so far this year. 

(BusinessDesk)