A new player has emerged in New Zealand’s retirement village and aged care sectors. Nineteen privately owned retirement villages and aged care facilities are considering a proposal to amalgamate ownership under a corporate entity, Hercules Ltd.
The group is not prepared to release the names of the “established and well performing” facilities. However, it has emerged that Park Lane Retirement Village in Christchurch is among the group. Eight villages or facilities are from the Christchurch area and two in Nelson, with others in Hibiscus Coast, Auckland, Tauranga, Palmerston North, New Plymouth, Waikanae, Blenheim, and Rangiora.
The concept has been in the pipeline for some time, with Hercules director Michael Ambrose crediting the vision of the late Grant Adamson, one of the drivers of New Zealand’s retirement village industry.
The group would have more than 2000 residents, with 48 per cent accommodated in aged care. Ambrose says providing a continuum of care will be a key focus of the Hercules group.
Facility owners will meet in October to approve the transfer of ownership to Hercules in exchange for shares in the company.
Hercules spokesman John Draper confirms the villages and facilities have been given valuations by property company CBRE and that the next step involves the owners approving these valuations.
It is anticipated that the proposed group will go ahead, due to the potential benefits for the current owners. As shareholders, they will have an investment in an enlarged group of villages and a public company. Under the new model, there is likely to be greater scope for maintaining and improving the villages and facilities and better opportunities for employees.
Draper says the villages will likely adopt the branding of the new group. However, the final name of the group is yet to be decided, as Hercules is the provisional name.
Hercules will seek to complete an Initial Public Offering and listing on the NZX. At this stage, it is envisaged the offer will seek to raise $50 million to $100 million through the issue of new shares, the proceeds of which will be used to pay down debt and provide funds for future growth.
It is unclear what impact the Hercules group will have on New Zealand’s village and aged care sectors. The dip in New Zealand shares of some listed retirement village operators following the announcement of Hercules’ entry onto the market suggests the new group could pose a competitive threat to those already listed.