Originally Posted by
Balance
Just finished reading a recently issued report by one of the major broking houses in Australasia on NZ's Retirement Village sector.
Nothing really new which have not been discussed and debated ad nauseam here in the Meet, Sum & Oca threads.
Nevertheless, a few key points to note from the report (report goes to their institutional & international client base so bound to have some influence) :
1. Demographics trend continue to provide strong tailwind for long term performance of the sector, population of 75+ to double over next 10 years (250,000 more), and
2. Short term headwinds of increased costs and lower unit resales to adversely impact on profits in 2020/21.
Sensitivities:
1. Increased costs in order of biggest impact - OCA, ARV, RYM, SUM & MET
2. Devaluation of asset values when gearing hits 50% (trigger point for debt concerns) - RYM (14%), SUM (15%), OCA (25%), ARV (26%) & MET (38%).
3. Most highly geared so likely to require capital raising - RYM (40%), SUM (33%), OCA (31%), ARV (27%) & MET (16%).