A pool of approximately 10 village operators have kicked in their 17 villages into the new retirement village group Arvida with the intention of listing them on the NZ stock exchange.
This week Australian and New Zealand institutional investors agreed to buy into their public listing, and at the top end of hoped for pricing. The next step is asking mums and dads to invest this week.
With 1,800 residents spread across 812 village units and 952 aged care beds, they are selling 40% of the business, raising $75M. The village operators and management will retain 60% and will be able to sell their shares after May 2016.
This model demonstrates the potential for independent village operators to both exit from their village investment and receive the bonus valuation that public listings can deliver. Here in Australia however sentiment towards villages as an investment sector will depend on the success of Aveo over the next 24 months. In NZ the 50% care beds factor makes their village value proposition completely different to most Australian pure village offerings.
The CEO of Arvida is Bill McDonald. Previously he held senior positions here in Australia with Stockland and ING (now Ingenia).