Arvida Group Limited — Management Reports 2018

Mar 15, 2018

Issue 6, March 2018.

==> picture [194 x 208] intentionally omitted <==

We are coming to the close of another very busy year for all at Arvida.

==> picture [403 x 59] intentionally omitted <==

----- Start of picture text -----

The evolution of Arvida since listing has seen considerable
growth of our very unique culture, which strengthens and
continues creating outstanding outcomes for our residents.
----- End of picture text -----

announcing the results of the survey with our financial results in May – although early indications are of a very favourable result.

The 2018 financial year will include a number of milestones, perhaps best reflected in the growth of our asset base which now exceeds $1 billion. At the time of our listing just over three years ago, it was around $350 million.

Almost half of our care facilities now have a 4-year certification period. This level of certification also continues to track significantly above the national average. It reflects the work completed by village and clinical managers on clinical quality and implementing the Attitude of Living Well philosophy across the Group.

Our focus on our development team and multiple projects within the portfolio over this period is now delivering great results. As we continue to gain momentum in our development programme, it has been particularly pleasing to see the uptake of our product by the market.

Bill McDonald Chief Executive Officer Arvida Group

Has integration of the Villages acquired last year been completed?

How is occupancy tracking?

Occupancy across our care facilities remains high, averaging over 95% for the second half. High occupancy translates into strong care fee revenues. Our occupancy levels continue to track significantly above the industry average. We see occupancy as an indicator of the quality of offering we are providing relative to our peers.

The three Villages added to the Group last year – Strathallan, Mary Doyle and Village at the Park – are all large sites. Mary Doyle in Havelock North is the largest village in the Group. Integration of all three villages progressed very well and was bedded down over the summer months. All are performing and to high capacity. We also completed the development of the 28 Adamson apartments at Village at the Park and have successfully sold down all but one.

We recently completed our second annual satisfaction survey of residents. Resident participation in the survey increased markedly with over 70% or 2,300+ responding. We look forward to

==> picture [25 x 25] intentionally omitted <==

==> picture [389 x 20] intentionally omitted <==

----- Start of picture text -----

Arvida. The attitude of living well.
----- End of picture text -----

Have sales been affected by a slowing residential property market?

We continue to receive a strong level of enquiry for new and refurbished stock.

As at 28 February 2018, 66 new units had sold and settled during the second half of this financial year including four care suite conversions. We are on track to settle 70 new unit sales in the period.

Compared with the whole of last year where 166 units were resold, we had resold 185 units at the end of February for $56.2 million or an

average sales price of approximately $304,000 per unit. This is 11% up on the average sales price recorded for last year.

Market indicators released for January point to continued activity in the residential property sector with housing consents up 5%, the number of properties sold across New Zealand up 3% and the national median house price up 7%.

Have any developments been affected by Fletchers limiting its construction activity?

The announcement by Fletchers to significantly reduce its involvement

in the New Zealand construction industry was unexpected in its scale. Only Rhodes on Cashmere is directly affected, although we have received confirmation of Fletchers’ commitment to complete Stage 1. We are currently in the process of finalising our partner for the next stage of construction at Rhodes on Cashmere, which is scheduled to commence late FY2019. We do not expect any issues in securing a construction partner with appropriate expertise.

We maintain good relationships across our construction partners that will see delivery of all projects to specification.

==> picture [378 x 36] intentionally omitted <==

As confirmed to NZX, construction activity continues to progress well across all development projects. We are on track to deliver 94 units over the second half of the financial year in line with guidance included in our interim release.

Update on our major developments in the pipeline:

• The first stage at Park Lane in Christchurch is due for completion in 1Q FY2019 with construction continuing to track well.

• Completion of Stage 1 construction at Aria Bay in Auckland will be 1Q FY2019. Resource consent for the next phase of redevelopment has been granted.

• Block E at Village at the Park in Wellington is due for completion in 1Q FY2020.

• The new care facility at Copper Crest in Tauranga has received all resource consents with construction tendering underway. Construction of villas continues as planned.

• Master planning at the Richmond greenfield site is finalised, with receipt of resource consents anticipated shortly. Earthworks are expected to commence in 1Q FY2019. The development includes 160 units and 60 care suites as well as commercial retail space, a Wellness Centre and village communal facilities.

Looking forward, we have a significant development pipeline in front of us with over 1,000 units/ beds remaining in our existing

villages after delivering of this year’s programme. We continue to progress a number of brownfield developments in the planning phase.

==> picture [362 x 223] intentionally omitted <==

----- Start of picture text -----

Village at the Park
----- End of picture text -----

==> picture [181 x 143] intentionally omitted <==

----- Start of picture text -----

Aria Bay
----- End of picture text -----

==> picture [181 x 143] intentionally omitted <==

----- Start of picture text -----

Copper Crest
----- End of picture text -----

==> picture [462 x 37] intentionally omitted <==

Eating Well and Food Control Audits

Wellness Leadership Programme

A key part of Eating Well is ensuring residents enjoy nutritious and safe food. Over the past year our national dietitian has been busy working with Village kitchen managers to ensure standards required by the Ministry of Primary Industries as part of the Food Safety Act 2014 are met. Audits have involved scrutiny of kitchen food control plan diaries and assessment of village kitchens to ensure a high standard of food safety is in place. All food control plan audits have successfully passed. As part of this, an Arvida menu plan has been implemented that focuses on giving residents choice and providing appetising, high quality food options that look to improve health and wellbeing in residents.

The Attitude of Living Well Leadership Programme has been designed to promote our resident-centred approach to care. It supports each village towards implementation of the household model of care and the Attitude of Living Well. Training runs over three months and provides the tools and resources to support teams and outstanding outcomes for residents.

A focus on our Wellness Leaders

In August 2017 Shelley Wright joined the Arvida team as a Wellness Leader. Based in Christchurch, Shelley brought a significant amount of passion; skill and experience to her role and has been busy ever since, empowering residents to Engage; Move; Rest; Think and Eat well!

Shelley describes her passion for the Attitude of Living Well below:

“For me it is about supporting residents to live to their full potential; maintain a sense of being alive as opposed to just existing and empowering them to be actively part of things. For some people that has been as simple as having the ability to spend time outdoors for the first time in four years. For others it has meant starting to run activities such as reading to fellow residents; providing computer skills training for fellow residents or taking charge of the garden.”

==> picture [104 x 242] intentionally omitted <==

----- Start of picture text -----

Thinking
Well
Engage your mind
• Wisdom
• Learning
• Discovery
• Mindfulness
----- End of picture text -----

==> picture [104 x 242] intentionally omitted <==

----- Start of picture text -----

Engaging
Well
Engage with friends,
family & local
community
• Connection
• Purpose
• Belonging
• Sharing
----- End of picture text -----

Investor Centre

==> picture [539 x 329] intentionally omitted <==

----- Start of picture text -----

We look to publish an investor update twice yearly. Investor Calendar
Your feedback and suggestions are greatly welcomed.
Financial Year End:
See contact details below.
31st March
(half year 30 September)
Relative Shareholder Returns Release of Annual Result:
130 29th May 2018
Final Dividend Payment:
21st June 2018 (4Q FY2018)
120
Quarterly Dividend
Payments:
110 September
December
March
100 June
Annual Meeting of
Shareholders:
90 6th July 2018
Nov 16 Feb 17 May 17 Aug 17 Nov 17 Feb 18
Auckland
Arvida Group NZ50G
Expected dates,
Source: IRESS as at February 2018.
subject to confirmation.
Total Shareholder Return
----- End of picture text -----

==> picture [196 x 11] intentionally omitted <==

----- Start of picture text -----

Relative Shareholder Returns
----- End of picture text -----

Go Electronic

Many of our shareholders have elected to receive communications from us electronically. If you’d like to change the way you receive communications from us or receive other communications from us by email, please go to

www.investorcentre.com/NZ

If you are a new to this website, you will need to create a login. Once you have registered and obtained your user ID, you will be able to log on and select ‘My Profile’ , then click ‘Update’ from the ‘Communications Preferences’ tile.

You will need your CSN/Shareholder number and FIN to use this online service. However, once setup, you will be able to access this service with your own User ID and Password.

Are your details correct?

To change your address, update your payment instructions and to view your registered details including transactions, please visit:

www.investorcentre.com/NZ

You will need to log in to register these changes.

Alternatively, you can contact Computershare at +64 9 488 8777 or enquiry@computershare.co.nz

Contact Us

You can contact us at any of the addresses and numbers below with enquiries, feedback or suggestions:

Arvida Group Limited Level 1, 39 Market Place PO Box 90217, Victoria Street West AUCKLAND 1142

Phone: +64 9 972 1180 Email: info@arvida.co.nz

==> picture [25 x 25] intentionally omitted <==

==> picture [389 x 20] intentionally omitted <==

----- Start of picture text -----

Arvida. The attitude of living well.
----- End of picture text -----