RYM-Ryman

[Basil]

Clever young guy.  https://www.youtube.com/watch?v=iWu0Lbge90E

[Shareguy]

Yeah, nah 
Off to another Ryman village tomorrow, along with a Summerset one, so shall report back on that.  Also looked at a villa in an established privately run retirement village, which was lovely, the units have more privacy than the Ryman ones, and about $185k cheaper to buy.   I told my Dad that $185k buys a lot of nice steak dinners!  Interestingly, the private village also had several units available to buy, which the lady said was quite rare as usually they have none.  Are more old people dying or less old people buying?

Interesting KW.  I did some research last month looking for a luxury unit at Ryman's new Takapuna village and also at Oceania's new Helier village.

At the time Ryman said no point in going on wait list due to high demand. Thought this was strange. Since then have not heard a thing from them. Yet lady from Oceania has contacted me several times.

[Basil]

Interesting KW.  I did some research last month looking for a luxury unit at Ryman's new Takapuna village and also at Oceania's new Helier village.

At the time Ryman said no point in going on wait list due to high demand. Thought this was strange. Since then have not heard a thing from them. Yet lady from Oceania has contacted me several times.

I think in that video Josh raised a great point about the inexperience of the C Suite at Ryman.
As I understand it normally Ryman et al appoint a sales manager for each new village who often continues on to become the village manager as the old folks love the continuity of dealing with the same person.

As I am sure you can appreciate these people are not paid a fortune and they come from all different sorts of backgrounds in life and its very unlikely, they are marketing experts per se.  I suspect a lack of leadership direction and / or entrenched marketing practices from the good times has led to the arrogant approach you received from them.  At the indicative prices they are suggesting, I think only a tiny fraction of the people on their wait list will even attempt to purchase a unit there and of course there will be many who try but cannot sell their homes for the very high prices they will need to afford a unit there.

The person handling enquiries there is highly unlikely to be a forward-thinking economic expert either and will be unaware that marketing practices and strategies that have worked in the past may not be successful in a depressed real estate market.  You would expect that individual would receive direction from senior management who are paid the big bucks to steer the ship and formulate strategies to successfully navigate the expected challenges that lie ahead....and that brings me full circle to highlight their lack of experience in the industry.  Put far more succinctly, I think their pricing and marketing strategy on that village is fundamentally flawed and this may be symptomatic as to one of the key reasons for their lack of recent sales success.  If they are following this marketing approach with that village, you can bet your last dollar they are doing the same thing with other new villages in their pipeline.

What I found really interesting from your enquiries is that the Helier is only 25% sold down.
In good times in the real estate game, a village of that caliber in such an incredibly stunning location, priced sensibly and conservatively like it appears to be, I would suggest this would have completely sold out many, many months ago. Frankly even in this market I am surprised it hasn't sold out because that location is absolutely superb. Their very moderate pricing for that site, very slow progress on sell down and the manner in which they have repeatedly followed you up gives a very valuable insight into the current state of the upper end of the real estate market and the very modest demand for higher end RV units.

I think in very difficult and stormy seas you want a highly experienced captain steering the ship which is why the lack of experience at the helm at RYM, at least to me, is something I find very off-putting.  Then there's the mid-teens percentage eps decline for FY24 because of having to issue so many shares to fix the USPP fiasco.  That eps dilution is a cruel hangover / legacy recent senior management who have left, have burdened shareholders with. I would suggest RYM hasn't had first class leadership ever since Simon Challis left.

RYM is not the company it used to be when Simon Challis was at the helm and now in my opinion deserves to be trading on metrics in the middle of the sector and no more.    SUM deserves to trade on a PE premium of 4-5 ahead of the pack, OCA 3-4 under the sector mid-point and RYM and ARV mid-point.
I think low tide for this sector will not be until sometimes in 2024 and this remains a sector to completely avoid this year.  That's how I see it.

Questions for RYM's management at their AGM. 
1. Why do you not expand the size of your enquiry list on new villages in a falling real estate market which seems like a profoundly sensible thing to do when logic would suggest a much lower percentage will be able to execute a unit purchase?
2. Is your very high price / very low DMF strategy you have always used fit for purpose in a much lower and down trending real estate market ?
3. Why did you repay the USPP early when you knew there would be such enormous costs in doing so and its consequent effect with issuing so many shares diluting all future years eps ?
4. What cash flow issues caused this incredible destruction of shareholder value and what are you doing to ensure the company doesn't become vulnerable in the future ?  Is the high pricing of RYM units partly responsible here so returning to question 2 is the current business model fit for purpose ?
5. Are the people who caused this huge USPP mess going to be held accountable in any meaningful way?

I think what happened with the USPP debacle is an absolute disgrace and someone needs to get up at the annual meeting and tell the board and management they should be bloody well ashamed of themselves. 

[Untamed]

Percy (I think) explained this not that long ago. There have not yet been any walk throughs for The Helier, and my understanding is that the most expensive, top floor units, are already sold.

Those people looking for the next level down, in terms of cost, are unlikely to be willing to sign on the dotted line until they have been able to walk through and have a look in person. Would you buy sight unseen?

Until The Helier is open for walk-throughs, there is zero point speculating and making assumptions about sales figures/wait lists, or anything else. If, down the track people walk through and don't sign up, then concern will be justified. All this worrying about stuff without knowing there is anything to worry about, is a waste of time and energy.

If I were a millionaire looking for a luxury home - you can bet I'd be watching The Helier with interest. It is a stunning facility. Yes I know, the thought of me living somewhere like that is ridiculous, but dreams are free 

What I found really interesting from your enquiries is that the Helier is only 25% sold down.
In good times in the real estate game, a village of that caliber in such an incredibly stunning location, priced sensibly and conservatively like it appears to be, I would suggest this would have completely sold out many, many months ago. Frankly even in this market I am surprised it hasn't sold out because that location is absolutely superb. Their very moderate pricing for that site, very slow progress on sell down and the manner in which they have repeatedly followed you up gives a very valuable insight into the current state of the upper end of the real estate market and the very modest demand for higher end RV units.

[Basil]

These days with computer generated renderings, if they have that technology, they should be able to give people a virtual walkthrough of their unit and a very accurate rendering of their outlook / view which in large part is what one is paying for with that site.

In better times SUM and RYM would completely sell out villages long before completion often with just one show-home unit on site.  You would think with modern computer technology, renderings and CAD design, people should have a very good idea of what they are getting.  That site is absolutely stunning...I would have thought people would be clamoring all over that without any need for a walk through.   Maybe you are right, people need to see their future home they are buying before doing so, after all we know most home purchases involve a lot of emotion so why would it be different with RV units...

I's like to live there when I'm 70.

[Untamed]

There is definitely a place for computer generated walk throughs, but many people, particularly women, want to  stand in the space and view it from their perspective too. They like to open cupboards, explore all the subtle "cool features" in the kitchen, envisage where they will put their furniture etc. I would imagine that this would be even more important when spending this kind of money.

Let me know when you buy yours - I'll come have a look 

These days with computer generated renderings, if they have that technology, they should be able to give people a virtual walkthrough of their unit and a very accurate rendering of their outlook / view which in large part is what one is paying for with that site.

In better times SUM and RYM would completely sell out villages long before completion often with just one show-home unit on site.  You would think with modern computer technology, renderings and CAD design, people should have a very good idea of what they are getting.  That site is absolutely stunning...I would have thought people would be clamoring all over that without any need for a walk through.   Maybe you are right, people need to see their future home they are buying before doing so, after all we know most home purchases involve a lot of emotion so why would it be different with RV units...

I's like to live there when I'm 70.

[KW]

Yeah, nah 
Off to another Ryman village tomorrow, along with a Summerset one, so shall report back on that.  Also looked at a villa in an established privately run retirement village, which was lovely, the units have more privacy than the Ryman ones, and about $185k cheaper to buy.  I told my Dad that $185k buys a lot of nice steak dinners!  Interestingly, the private village also had several units available to buy, which the lady said was quite rare as usually they have none.  Are more old people dying or less old people buying?

Was not impressed with the older Ryman village.  Over priced and under-refurbished.  They are charging $720k which is the same price as for one of the brand new units in their new village, yet the unit was rather dated, and smaller.  When I compare the private village we looked at, their idea of refurbishment was a full gut job and new kitchen and bathroom installed, so fully modernised.  Rymans idea of refurbishment is new paint, carpet and drapes in a villa that was built in 2001.  So I'm struggling to see how the resales are competing with their new builds.  Is this a deliberate strategy?

[Basil]

I am sure it is a deliberate strategy. 

[Teitei]

I am sure it is a deliberate strategy. 

Cashflow wise, it makes sense for Ryman (or any of the RV operators) to sell the new units as all the proceeds go to Ryman.

Selling an existing unit (resale) means Ryman gets less as it has to pay part of proceed to the estate or trust.

Plus, I understand that the estate or trust has to continue to pay for the upkeep of the resale unit until such time as it is sold.

[KW]

Cashflow wise, it makes sense for Ryman (or any of the RV operators) to sell the new units as all the proceeds go to Ryman.

Selling an existing unit (resale) means Ryman gets less as it has to pay part of proceed to the estate or trust.

Plus, I understand that the estate or trust has to continue to pay for the upkeep of the resale unit until such time as it is sold.

This explains the pricing discrepancies that favour the new builds.  But it also highlights the problem that departing residents are being financially penalised by the village operator and calls for legislative change is not unfounded.  The occupier of a unit should not be competing with the owner of the village to sell their property.

[KW]

In case anyone is interested in the end of the story - yesterday my Dad signed up for a new Summerset village unit in Avonhead.  I am so relieved that he has finally made a decision, he was starting to drive me mad lol.  It was the most expensive one we saw, it offered no rebates or cashback, and its weekly fees are not fixed but CPI adjusted but my Dad doesnt care.  It was my favourite one as well.  I look forward to visiting and using the pool 

What he did care about though was that Kevin Hickman was one of the villages that Ryman has put on a slowdown/pause construction wise, so there was no telling when the place would be completed and he didnt fancy living in the middle of a construction zone for years.  Plus the lovely field outlook from the back of his village unit would soon be the main access road to an 11 hectare affordable housing development.  It pays to do your research    Thanks to reading the Ryman thread on this forum I was totally up with the state of play of Ryman's construction and knew to go looking to see if KH was one of the ones being delayed.  So you all saved my Dad from spending his final years being annoyed and grumpy 

[lorraina]

A friend of mine moved there about 3 years ago.She loves it.
Well done,both you and your dad.

[Untamed]

I am very glad your Dad has found somewhere he likes, where he will be happy I am sure.

Your comment below is very telling, and important to note. For many folk in your Dad's position, they are far more focussed on finding something they like, than they are on the $$$. They have worked all their lives and have done the hard yards bringing up their families. Sometimes there are much more important things than money.

I have been following some of the Facebook groups for Ryman and Metlifecare, amongst others. These are groups set up for both current occupants and the general public. The overwhelming sentiment from those who live there, is one of total satisfaction and zero regret. The negative posts are pretty much all from families, or the general public who have zero understanding of the sector, and have fallen foul of media hype about "ripping old people off." It is really interesting to read the comments of occupants, in response to those negative posts. Unfortunately, you can't convince the naysayers, no matter how much you try. I tried, but have given up - they are not interested. Interestingly, there are more than a few implications that providers are "stealing inheritances" - also very telling. It is high time adult kids stopped expecting an inheritance. Our parents should be free to do what they wish with their money in their retirement, without any feeling of obligation to provide for their grown kids!

It was the most expensive one we saw, it offered no rebates or cashback, and its weekly fees are not fixed but CPI adjusted but my Dad doesnt care. 

[KW]

I am very glad your Dad has found somewhere he likes, where he will be happy I am sure.

Your comment below is very telling, and important to note. For many folk in your Dad's position, they are far more focussed on finding something they like, than they are on the $$$. They have worked all their lives and have done the hard yards bringing up their families. Sometimes there are much more important things than money.

I told my Dad that most people's only regret is that they didnt move in earlier.  That there was no point spending all that money to wait until you are so old and infirm that you cant even enjoy the facilities.  That being said, they are probably not for everyone, especially those ones where everyone is in close quarters to each other.  There is a 90 day "dont like it you can move out with no financial penalty" clause, but maybe that should be a bit longer, maybe 6 months might be a better time period. 
And I think that the provider should make a full refund of the capital payment at the time the resident exits, and not make the resident or their estate wait for months until the place is resold.  They have had the use of that money for all that time, interest free, so doing dodgy things like pricing a resale unit higher than a new build unit is not on.  So some changes are needed I think, but the basic model of selling right of occupancy is fine.  If families want an inheritance they are always welcome to take their elderly parent into their own home, and preserve "their" money that way.  As they say, you cant have your cake and eat it too lol.

[Basil]

I told my Dad that most people's only regret is that they didnt move in earlier. 

My Mum told me when she was in her village unit for over 11 years nearly every single resident she met at her village said exactly the same thing.
I am sure he will be happy at a new Summerset village.