Summerset raises deferred management fees from 25% to 30% for new residents

Retirement Villages Residents Association of NZ national president Brian Peat.

His organisation opposes such fee rises and Peat said he was disappointed by the Summerset move.

But a Summerset spokeswoman said the cost of developing, operating and maintaining modern retirement villages had increased significantly.

She said the change would only affect new residents.

“Existing residents are unaffected and will continue under the terms of the contract they entered into when they moved into a Summerset village,” she said.

The company had the lowest fee in the sector at 25% but increased it on August 17.

That now aligned with the rest of the sector, she said.

The change reflected how the retirement village sector had evolved.

“The cost of developing, operating and maintaining modern retirement villages has increased significantly, while residents increasingly expect larger homes, more amenities, enhanced care options and a wider range of services and activities,” the spokeswoman said.

The Pinnacle penthouse at Summerset St Johns retirement village in Auckland. Photo / Summerset Group

Summerset announced the deferred management fee change as part of its half-year results announcement on the NZX this morning.

“We have taken steps to strengthen future cash generation, including increasing our DMF [deferred management fee] in New Zealand to 30%. This is expected to generate approximately $35m of additional cash flow over the next five years,” the company’s statement said.

It’s not the only retirement village operator to increase its deferred management fees in recent times.

Two years ago Ryman Healthcare increased its fee as well. They were the lowest in the sector at 20% but two years ago, it announced it was increasing the fees to 25% to 30%.

Scott Scoullar, chief executive officer of Summerset. Photo / Jason Dorday

Half-year financials

Summerset said today it had assets of $9.8b, up 14% on the first half-year of 2025, driven by portfolio growth and the underlying value of existing assets.

Net debt is $2b, giving a 37% gearing ratio.

Profit rose from $89.4m in the half-year to June 30, 2025 to $171.4m in the half-year to June 30, 2026.

But devaluations also rose from -$85m to -$191m, pushing down underlying profit from $106m to $103m.

Summerset St Johns retirement village in Auckland. Photo / Jason Dorday

Summerset chief executive Scott Scoullar said in his half-year summary that it had reached several important village centre milestones.

Four new village centre buildings opened during the period.

Early occupancy and under-contract levels were encouraging: 45% of available serviced apartment, care and memory care stock at Cambridge, 43% at Whangārei, 30% at Waikanae, and 21% of village centre assisted living apartments at Cranbourne North, Melbourne.

Summerset St Johns retirement village in Auckland. Photo / Jason Dorday

Summerset is marketing New Zealand’s most expensive retirement property for $11,995,000: a 208sq m apartment on level five of a new block at Summerset St Johns, Auckland.

That has three bedrooms, a study, four balconies, European oak timber flooring and Gaggenau cooking appliances.

Anne Gibson has been the Herald’s property editor for 26 years, written books and covered property extensively here and overseas.

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