Retirement village exemption rejected by committee considering foreign buyer ban

Retirement village exemption rejected by committee considering foreign buyer ban. Photo: John Sefton

Retirement village operators are disappointed that the select committee considering the Overseas Investment Amendment Bill did not exempt them from having to get approval before buying sensitive or residential land to build new villages.

In March, the chief executives of listed retirement village operators Metlifecare and Ryman Healthcare, and representatives from the retirement village sector appeared before the finance and expenditure select committee to lobby for an exemption from the bill, to prevent them having to get Overseas Investment Office approval. The retirement villages are based in New Zealand and operate here, but are considered foreign entities due to more than 25 percent of their shares being held by overseas investors or institutions.

The select committee's report, released earlier this week, recommended some significant changes to the legislation but didn't include the exemption the retirement village representatives were looking for.

Glen Sowry, chief executive of Metlifecare, said the company is very disappointed with the outcome, and "somewhat perplexed that argument was not accepted".

"We believe the case we put forward to select committee was sound, and the key premise was we understand what the government is trying to achieve through this new legislation but we remain of the view that retirement village developers and operators are part of the solution the government is trying to achieve, not part of the problem they're trying to solve," Sowry said.

Metlifecare had to go through the OIO to get approval to buy land in Hobsonville, a decision it granted in April, and Sowry said that decision took a substantial amount of time.

"In some cases, where we are seeking to acquire land, not surprisingly it's close to amenities that people find attractive - a coastal location, near a waterway or a reserve - which triggers the sensitive land definition. In all of those cases going forward, we'll be required to make a decision under the OIO legislation, which naturally slows the process and in some cases may make us uncompetitive in trying to acquire that land, notwithstanding the fact we're largely owned and operated by New Zealanders exclusively for New Zealanders."

Ryman Healthcare's chief executive Gordon MacLeod said it was disappointing to miss a chance to streamline the approval process, though "the reality is the position is no different to what it was previously. None of this stops us from buying land through the OIO process in the future.’"

(BusinessDesk)