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Real Estate Development firm, Summerset, receives $100 million foreign investment from Australia's QPE funds management

A planned foreign investment of over $100 million in a retirement village developer has been approved in New Zealand. The deal received foreign investment approval last week from two Australian owned companies that had been involved in the making of the deal for the village, to be located in the North Island.


The Overseas Investment Office (OIO) approved the investment deal for Australia’s QPE Funds Management, a firm that manages Quadrant Private Equity No 2A and No 2B Funds, for the buy out of AMP Capital Investors’ stake in Summerset. The New Zealand’s third largest retirement village developer and operator, is behind NZX-listed businesses such as Ryman Healthcare and Metlifecare. As of this deal, QPE currently owns 48.8% of Summerset and 50% of the management business, and received consent to purchase an additional 48.8% of Summerset from AMP and get full control of the management company.


The OIO released the details of this Summerset deal last week saying that assets were worth over $100 million because the chain had 18 retirement villages and development sites. Summerset has 450 employees and said that it owns 1200 retirement village units, villas and apartments, and over 300 rest home and hospital beds. The company currently has 14 development sites and villages in the North Island and plans to construct more units in Dunedin and other areas of the South Island of New Zealand.


According to Statistics New Zealand, people aged 65 and above will grow in population by around 100,000 to top 566,000 by 2011. As such, Summerset intends to capitalize on this growth and have 20 villages in operation or being developed by 2012, a rate of about 150 units per annum. Eight sites were listed by the OIO in the quadrant/AMP deal that were classified as sensitive. This entailed 5 hectares at Palmerston North’s Ruapehu Drive, 7ha in Katikati's Park Rd, 9ha in Waimauku's Joyce Adams Place, 6ha on Paraparaumu's Realm Drive, 6ha on Warkworth's Mansel Drive, 2ha in Dunedin's Shetland St, 7ha in Hamilton's Dixon Rd and 5ha on Trentham's Racecourse Rd.


The deal was approved by the OIO because it adheres to the Overseas Investment Act 2005 in the way it adds market competition, productivity and the creation or sustenance of jobs. In 2010 alone, the OIO has approved 28 deals, though it is a decline from the 55 approved at around the same time last year. In 2009, net investment topped $55.6 million in the first quarter, an amount that increased to $194 million in the first quarter of 2010.


June 7, 2010.


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