Retirement village operators Metlifecare, Ryman lobby for foreign buyer exemption
By Sophie Boot
March 1 (BusinessDesk) - Listed retirement village operators Metlifecare and Ryman Healthcare say they want to be exempted from proposed changes to foreign investment rules which will deem them offshore companies requiring Overseas Investment Office clearance to buy land.
Metlifecare, Ryman and representatives from the retirement village sector appeared before the finance and expenditure select committee to lobby for an exemption from the Overseas Investment Amendment Bill, which will allow the Overseas Investment Office to give approval for retirement villages to be built on residential land.
However, Gordon MacLeod, chief executive of Ryman, told the committee that getting OIO approval could take six months or longer, and vendors would not wait around for permission to be given if they had other offers for the land.
Glenn Sowry, chief executive of Metlifecare, said that company was majority-owned by New Zealanders, with around 18 percent of its shares owned by foreigners. Fund managers, which manage Kiwisaver funds but are ultimately Australian-owned, tip Metlifecare over the 25 percent threshold to make it a foreign entity under the proposed changes, he said.
"We understand the intent that the government is seeking to achieve through this legislation, and we don't have an issue with that per se," Sowry said. "What we do have concerns about, as a retirement village operator and a listed one that does need to access capital to support our construction and building and growth activities to support the growing demand for our services in the years ahead, is that we come up with this issue."
Sowry said the sector was "part of the solution, not the problem" and was an efficient supplier of housing. He said he hoped the issue was an "unforeseen catch" with the draft legislation.
Ryman's MacLeod said the group was "acutely conscious" of the risk of a carve-out for retirement villages being misused and had made suggestions for the criteria for an exemption from the foreign buyers ban apply, including that the land be bought for the purpose of developing a retirement village or aged care facility; it be developed within a specific timeframe, or be divested; it be registered as a retirement village; and that the exemption apply only to NZX-listed companies. However, he accepted that the NZX listing criteria wasn't essential, but was "one example" of criteria which could be used.
The committee is due to report back by May 31, after which the bill will have its second reading.