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Summerset has first half gain

Retirement village operator Summerset Group Holdings Limited has announced an underlying profit of $47.8 million, a 6% increase on the first half of 2018.

Summerset CEO Julian Cook said results had been driven by strong demand at Ellerslie and Hobsonville villages.

“Ellerslie and Hobsonville were our top sellers this half despite the slower Auckland housing market,” Mr Cook said.

Reported (IFRS) profit was $92.6 million, down 4% on the same period last year. IFRS profit includes fair value movement on investment property.

“The fair value movement reflects ongoing strong value growth across the business and is close to the increase seen in the prior comparable period. This is despite the flattening property market in some areas of the country,” said Mr Cook.

Mr Cook said the company had purchased six new sites since the start of this year. These are located in Blenheim, Rangiora, Cambridge, Milldale, Waikanae and Whangarei.

“These purchases reflect our desire to buy sites in urban fringe locations, retirement destinations, and high growth regional centres. These sites are attractive from a financial return, risk, and demand perspective,” he said.

The additional sites have lifted Summerset’s land bank to nearly 5,000 retirement units, the largest in the sector.

Summerset delivered 139 new homes in the half year. Mr Cook said the company expects to deliver around 350 homes this year, with a further 150 retirement units to be completed in the main buildings at Casebrook and Rototuna in the first half of 2020.

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