Golf club tees up potential land deal

HAMISH RUTHERFORD
Last updated 08:13 22/11/2012
Boulcott's Farm Golf Course
PHIL REID/Fairfax NZ

Negotiations could result in retirement care company Summerset buying surplus land at Boulcott's Farm Heritage Golf Club in Lower Hutt.

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Shares in Summerset, the Wellington retirement care company, surged to a record high this morning on news that it is in talks to buy land for a new village in Lower Hutt.

This morning The Dominion Post revealed the NZX listed company was in talks to buy part of a golf club as it ramps up its development programme.

Shares in Summerset, which closed at $2.04 on Wednesday evening, equalling its previous record closing high.

By noon today they had surged 11 cents of 5.4 per cent to $2.15, valuing the company at just under $462 million. Since floating last November, the shares have now risen by 54 per cent.

Members of Boulcott's Farm Heritage Golf Club voted on Monday evening for a proposal to sell land left surplus after the building of a stopbank through the land, general manager John Freer confirmed yesterday.

He declined to comment on specific elements of the potential deal. The site in question is understood to be about three hectares, which would accommodate a substantial retirement village development. Summerset, with headquarters in Wellington, listed on the NZX last November. Its shares have risen about 45 per cent since.

Chief executive Norah Barlow declined to comment on the possible deal, but did not dispute that talks were under way.

"We see that Hutt Valley has a lot to offer a company like Summerset. It's generally an under-villaged area, it's pretty land- locked, there isn't a lot of space available," she said.

"Sites that are close to hospital, close to a golf course, are sites which anyone would wish to have."

Summerset is not the only aged-care company striking deals for real estate in Hutt Valley. In July, Ryman, another listed retirement village company, announced plans for a $100 million development on the site of the former Hutt Valley Memorial Technical College, which later became Petone College.

Ryman managing director Simon Challies said Lower Hutt had been "under-serviced dramatically" by retirement villages.

Summerset's talks emerged as the company confirmed it was increasing the development programme it announced in last year's prospectus. Having promised to be building 250 units a year by 2016, the company now plans to build at least 300 units by 2015.

"When you start getting the pieces of land we've got, you start getting greater visibility on where you can build and what we can do," Barlow said.

Yesterday, Summerset said it had bought a site in Ellerslie, Auckland, its second in the city since it floated, which would become its 19th retirement village.

"Summerset has its sights set on Auckland. This land in Ellerslie is an opportunity for us to provide Auckland with another high-quality, modern Summerset retirement village," Barlow said.

"We see ourselves as a solution to both potential residents and the Government in dealing with the housing and care challenges the population will create."

Shares in the company, which floated at $1.40 last November, closed up 3.5 per cent at $2.04, equalling a record high reached in late October.

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Contact Hamish Rutherford
Business reporter
Email: hamish.rutherford@dompost.co.nz
Twitter: @oneforthedr

- The Dominion Post

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