Good day, welcome to the Oceania Healthcare FY 2021 results announcement conference call. At this time, I would like to turn the conference over to Brent Pattison, the CEO of Oceania Healthcare. Please go ahead, sir.
Yes. Good afternoon, everyone, and welcome to Oceania's results briefing. My name is Brent Pattison, the CEO at Oceania, and I'll be joined by Kathryn Waugh, our new CFO. You'll see on the front cover of our presentation, we have led with Believe in Better, and certainly for us, this is more than a catchphrase. It signals our intent to build upon past achievements and challenge ourselves to do even better in the delivery of resident experience. The positive impact we can make on our local communities, program growth for the business, shaping perceptions around aging, and being alert to our carbon footprint, as well as being a great place to work. We are pleased to update you on the 10-month trading period to 31st March 2021. We will touch on what has been happening in the business and update on our strategy and our developments.
Kathryn will cover the financial results in more detail, and we certainly look forward to having time at the conclusion of the presentation for some Q&A. If you tune with me to slide three, this is our first financial results presentation since we changed our full-year balance date to March 31. Historically, it has been our May 31 year-end. The financial result contains a shorter full-year period of 10 months and covers the trading period June 1, 2020 to March 31, 2021. We have included the 10-month comparative period information for investors and analysts. We're certainly pleased to observe that both of our underlying metrics being underlying earnings before interest, tax, depreciation, and amortization, EBITDA, and net profit after tax, NPAT, are up 7.9% and 4.4% respectively on prior 10-month period.
This has been underpinned by record sales volumes, strong care performance, and successful delivery of new developments, which we'll touch on in the coming slides. On the right-hand side of the slide, we have included a COVID-19 graphic to aid investors and analysts with the impact that the various alert level lockdown restrictions have had on our business activity. In our prior reported periods for the 12 months to 31 May 2020, there were 50 days of alert Level 3 or higher restrictions, and you'll see those in footnotes one and two. In our 10 months to 31 March, there were a further 53 days of alert level 2.5 or higher restrictions, and they're contained in our footnotes three through to six. In the 10-month pro forma comparative period to 31 March 2020, there was little impact as only five days of alert Level 4.
Turning to slide four and the 10-month trading highlights. The 10-month trading period has been a busy and successful time for the business. We've delivered an increase in our premium revenue strategy, a step change in our sales volumes, and strong underlying EBITDA growth. Increases on both the 10-month prior corresponding period, PCP, and pleasingly, more than our full 12-month period to May 2020. Our growth in premium revenue to NZD 35.2 million for the 10-month period is a strong proof point of our intentional investment in premium care. NZD 13.1 million of Care DMF and PAC revenue up from NZD 9.4 million PCP, and strong new and resales in our village segment with DMF revenue of NZD 22.1 million, up from NZD 18.1 million PCP. Sales volume, development margin, and resales were key drivers of the 7.9% lift in underlying EBITDA to NZD 56.2 million from NZD 52.1 million PCP.
Total assets increased to NZD 1.9 billion, both a reflection of our continued capital investment of NZD 102 million in new and existing sites, and changes to CBRE's valuation assumptions that largely reversed the COVID-19 input assumptions. We turn to slide five, and talk about aged care and record sales volumes. In our aged care business, we now have 847 Care Suites in our existing portfolio, and this establishes a strong position for us in the market with this product offering. The Care Suite supplies both efficient recycling of capital at first time sale and growing annuity income from the deferred management fees on Occupation Right Agreements. Our aged care business has delivered a near 20% increase in care earnings per bed to over NZD 9,500 per annum, compared to NZD 8,800 earnings per bed in the previous period.
If we include the development margins and resales, we've seen an 11% lift in our earnings per bed to NZD 17,600 per annum. Our premium beds or Care Suites now represent approximately 55% of our total care portfolio nationwide, up from 34% at the time of the IPO in 2017. We completed 132 new Care Suites across two sites during the 10-month 2021 period, and we have a further 144 Care Suites under development right now. Record sales. Despite the shorter 10-month reporting period, we recorded 388 total ORA sales to 31 March 2021, an increase of 9% or 33 units and Care Suites on the full 12 months FY 2020 period. When we look at that on a 10-month PCP basis, we've achieved more than 25% growth in volumes across ILUs and Care Suites. Our new sales of 194 included over 75% of sales outside the Auckland region.
We have guided to moderation in our development margin as we move outside the Auckland region. Pleasingly, our development margin remains strong at 26%, despite the small regional bias. The new sales included villa, apartment, and Care Suite sales at Gracelands, which is in Hastings, Green Gables in Nelson, Elderslea in Upper Hutt, The Bayview in Tauranga, and Awatere in Hamilton. Our resale volumes of 194 were up 17% on the full year 2020. Prices achieved on villa, apartment, and Care Suite were all up on a full year 2020 basis, and more detail on this is contained within the slide pack, page 21. If we now think about development and our recent acquisitions, we delivered 217 units and Care Suites across our brownfield portfolio in three geographical regions, despite the loss of 53 days disrupted by alert level 2.5 restrictions or higher, and the shortened 10-month trading period.
As at 31 March, we had 394 villas, apartments, and Care Suites under construction across five regions. 221 of these are due for completion in the full year to 31 March 2020. 49 of these have already been secured through the completion of a new premium apartment block at our Eden site in Auckland in April. Our remaining development pipeline of 1,956 units and Care Suites is 75% consented and has been complemented by the recent brownfield and greenfield acquisitions of Waterford and Franklin, respectively. Our development team continue to demonstrate their ability to deliver projects on time and on budget, which provides the business with a very clear growth pathway over the coming years. Turning to acquisitions and the capital raise. We successfully completed an oversubscribed NZD 100 million capital raise in March 2021 to fund two quality acquisitions.
This equity raise was undertaken by way of an NZD 80 million placement and an NZD 20 million retail offer. It was great to see existing and new shareholders supportive of our growth. The acquisition of Waterford on Hobsonville Point provides us with an attractive Auckland location, quality built form of villa and apartment, and a vibrant resident population. The existing site offers surplus land that has resource consent to develop circa 60 Care Suites and apartment units. The acquisition of Franklin in Pukekohe is a 6.1 hectare greenfield site, currently with a small existing leasehold, which we operate on behalf of the Methodists. This site offers an opportunity to develop circa 215 units and Care Suites when complete. Turning to the dividend. The directors have declared a final dividend of NZD 0.021 per share.
This is not imputed and brings our total dividend for the year to NZD 0.034 per share, representing a 55% payout ratio of underlying net profit after tax, which is in line with board policy. The dividend reinvestment plan will continue to apply. Turning to Slide seven, just an update on our strategy. Our strategy of premiumization of aged care and unlocking additional yield through site optimization continues to be a key feature of Oceania's strategy. The graphic shows the steady annuity progress of our earnings and the status of our brownfield development. From consent to ramp up is traditionally a five-year cycle. In our Care Suite portfolio, we have significantly progressed the proportion of those bed numbers that are now achieving greater than NZD 10,000 a bed. In the past, we have disrupted short-term earnings to deliver higher yielding earnings per bed or site optimization.
In our future planned and commissioned bed numbers, we have less of this disruption as we are largely building new Care Suite product on vacant or available land versus room conversion. Recent examples include Bellevue, Green Gables, and Lady Allum. In our development pipeline across both care and village, we have 1,956 beds and units. There were 394 under construction at balance date and will progress to maturity of earnings or first-time development margin capture in the near future. Since the IPO in May 2017, we have delivered nearly 800 new independent living units and Care Suites to the market, including the opening of six premium aged care centers at Meadowbank in Auckland, The Sands, which is also in Auckland, The Bayview in Tauranga, Awatere in Hamilton, Green Gables in Nelson, and the Bellevue in Christchurch.
These developments and their subsequent sell down have materially contributed to the group's 105% growth in total assets to over NZD 1.9 billion for that period. Slide eight, just an update on our developments before we get to the pictorials. It's been a busy year for our development and property team, and we are pleased, despite ongoing COVID-19 disruptions, to deliver 217 units and Care Suites. This was the amount of new delivery we intended to build over our full 12-month period, so we're very pleased to have achieved that result with a shorter 10-month trading period. I'll talk to each of the completed developments on the coming slides. Our future developments are on track, and as at 31 March, we were actively underway on a further 394 units and Care Suites over seven sites across New Zealand, with 221 scheduled for completion in the full year 2022.
We have consents in place for 75% of our total development pipeline, which has recently increased to 1,956 with the addition of our two recent acquired sites, Waterford and Franklin. Slide nine. On to the photos. We delivered 217 units and Care Suites in the 10 months to 31 March 2021. These are across three sites, Green Gables in Nelson, The Bayview in Tauranga, and the Bellevue in Christchurch. Green Gables is 28 apartments and 61 Care Suites. It's a highly desirable city location in Nelson, surrounded by leafy suburban streets. The site had strong local demand and very little competition. It has been well-received by the local community, both in terms of design and quality, and we have seen strong inquiry and more than 70% of available apartments are sold. The Bayview Stage 2A is a further 35 apartments and community center.
This is a flagship property for us, and it's located on the slopes of Judea in Tauranga. It has commanding views towards the mount and Otumoetai Basin. The community center provides excellent amenity, including an indoor swimming pool and large outdoor living area. This sits alongside the care development on-site that is full and has waiting lists. Stage 2B of The Bayview unit development is scheduled for completion in the second half of full year 2022 and will deliver a further 39 premium apartments. Lastly, the Bellevue in Christchurch was only recently completed and consists of 22 units and 71 care suites. It's located on the popular Windermere Road, and there is good demand for aged care in that region.
During the build phase, we were able to save the memorial trees, and these form part of a shared garden space that both the care and independent living residents can enjoy. We have a further stage of 46 apartments commencing in full year 2022. Slide 10. I'm now going to quickly cover the FY 2022 scheduled completions. We have 221 units and Care Suites. First photo, Eldon. Our Eldon site already has 67 Care Suites and 40 units. The site is already delivering strong care earnings per bed at circa NZD 23,000 per annum. It is largely full and has waiting lists. In April 2021, we completed the construction of 49 luxury apartments and a new community center on the land that we bought adjacent to our Eldon village, with initial sales and applications underway.
Lady Allum is in Milford and has 113 Care Suite development scheduled for completion in the second half of full year 2022. You'll see from the photo that the building works are significantly advanced with the superstructure proceeding already up to roof level. The completion of this new care development will enable further site optimization. In addition to these two, we have 39 apartments of Stage 2B at The Bayview, 18 villas at Gracelands in Hastings, two villas at Stoke in Nelson. Other developments under construction, Slide 11. Other significant developments under construction include Waimarie Street, which is in St Heliers Bay in Auckland, and Awatere Stage 2 in Hamilton. Waimarie Street is a premium greenfield site and highly visible on the slopes of St Heliers Bay. Groundworks are well underway. It's one of Auckland's most superior locations, with 360-degree views of Auckland and its surrounding harbors.
The site will deliver us 79 units and 31 Care Suites, and we have had a high level of interest with a significant number of inquiries already registered. Just as importantly for Mark Stockton, our Group General Manager of Property and Development, the site also boasts the largest tower crane in New Zealand, and it's great for marketing as well. Awatere Stage 2. Construction is well underway for 63 units and community center on Stage 2. The property is well-located. It's nestled near Milne Park and the banks of the Waikato River. The construction is scheduled for completion in our full year 2023. You can see from the photo that the construction works are well progressed. On to acquisitions.
The recent acquisitions of the Waterford property and the Franklin land bank signal a pivot in our strategy, firstly, to the identification and prosecution of value-accreted M&A, and secondly, to growing our greenfield presence. The Waterford property is situated at the entrance of Hobsonville Point, the master-planned and highly sought-after community in the Auckland region. The acquisition represents a highly attractive brownfield bolt-on to Oceania's existing platform. It comes with no immediate additional operational cost. The site offers two further areas of development. We have concept plans advanced for the site and resource consent in place, so we can get underway with circa 60 units and Care Suites, delivering a greater yield on the site. We took position on the 23rd of April 2021 and have already secured a couple of new sales of apartments and applications. The villas on-site are 100% occupied. Turning to Franklin.
We have purchased the adjoining two-hectare site on which we currently operate a care facility on behalf of the Methodists. Franklin is a key location in the broader Auckland region and part of the fast-growing south-western corridor. We have developed concept plans for the site, with a mixture of villa, apartment, and Care Suites, are expecting to deliver circa 215 units and beds. These acquisitions will be settled using the proceeds of our recent NZD 100 million capital raise. Lastly from me, before I hand over to Kathryn to discuss the financial results. We've set out the future outlook for our portfolio when it is fully developed. The right-hand side graphic shows the existing portfolio, i.e., what we've delivered to date, the development pipeline, i.e., what lies ahead for us, lastly, our post-development portfolio, i.e., our future state.
Our existing portfolio is roughly split 50/50 between premium and non-premium units and care beds. The Care Suite component represents about 21% of total existing product. We have 1,459 total units and Care Suites that are consented and under construction, with a 60/40 development pipeline bias to units. We have traditionally built Care Suites first from the reclaimed rest home and/or care offering on our brownfield sites in order to free up the higher-yielding land for future apartment and villa development. In our completed future state, we will have roughly a 50/50 split towards units in the care product. Within the care product, it will also be split 50/50 between care beds and Care Suites. The total portfolio will have a 70/30 split between premium and non-premium units and care and deliver over 5,500 units and beds across New Zealand.
I'll now hand over to Kathryn to run through the financial results.
Thank you, Brent, and good afternoon, everyone. I've been involved with the Oceania business for coming up to 12 years now, and it's great to be presenting the 10-month results today. Brent has spoken about our brand, the development pipeline, superior care earnings, and continuation of strategy. I will now cover off an overview of the key financial results by segment and some of the key metrics with regard to sales and capital structure. Although I won't touch on them today, we have also provided further detail in the appendices of our presentation. Moving firstly to Slide 15. Brent touched on the change of balance date right at the beginning of this presentation. As he mentioned, the majority of our presentation talks to the 10 months of trading, which also represents our statutory position, as can be seen in the full financial statements.
On this slide, we provide the details of the 12 months pro forma to March 2021 as compared to a pro forma 12 months to March 2020. Noting that the 12 months to March 2021 include all COVID lockdown periods and as such, are impacted by the full COVID effect. When running through GAAP information in the next few slides, we have the 12 months to May 2020 as a comparator. When discussing the non-GAAP results of underlying earnings, we've provided 10 months to 31 March 2020 comparatives. Moving now to the income statement. Total comprehensive income of NZD 167.8 million was up significantly when compared to NZD 9.9 million in relation to the 12 months to May 2020. The material contributor to this positive result was the reversal of COVID-19 valuation assumptions contained within the March CBRE revaluation.
This has resulted in favorable fair value movements in both our investment property, which I will refer to as IP, and our property, plant, and equipment, which I will refer to as PPE. There has been a positive change in the fair value of IP of NZD 83.1 million. This movement has been driven by an improvement in CBRE's valuation of the operator's interest, which reflects the value of future deferred management fees and resale gain cash flows from the Village portfolio, as well as positive impacts from the new developments at the Bayview, the Bellevue, and Eden being valued on an as-complete basis for the first time. At the time of our FY 2020 results last year, CBRE's valuation of IP reflected adverse changes to key assumptions resulting from a point-in-time valuation being undertaken with a COVID lens.
At our November 30, 2020 interim results, CBRE has reversed some of these key assumption changes, and now at March 31, these COVID valuation impacts have been unwound in full. We highlighted these in the table to the right-hand side of the slide. Firstly, property price growth rate in year two has returned to pre-COVID levels of 1%, back up from 0%, and now back to historical levels. In year one, it has increased to 2%. It was historically zero. Secondly, discount rates have reduced by 12.5 basis points across a large portion of the portfolio, reflecting a return to pre-COVID levels, having been increased by 12.5 basis points and 25 basis points across the portfolio last May. Further supported at the total comprehensive income level, there has been a change in fair value of property, plant, and equipment.
Valuation improvements across many of our key care sites, reflecting the reduced discount rates, tenure changes, increase in EBITDA per bed, and also the positive fair value movement from the newly completed Care Suites at the Awatere. Turning now to operating revenue of NZD 175.4 million. We have seen continued growth in our care business, which is favorably impacting increased reoccurring revenue of NZD 13.1 million in relation to the Care Suite deferred management fees and PAC revenue. Village DMF is also continuing to experience strong growth. As such, group DMF for Village and Care Suites in the 10-month trading period was 8% higher than the full 12-month FY 2020 period. Operating expenses of NZD 162.9 million for the 10 months to March reflects the continued investments in staffing, patient welfare, particularly in relation to our development sites that are ramping up, in addition to COVID-19 response across our facilities.
The depreciation expense on buildings was NZD 8.6 million. Our Care Suite assets are treated as PPE and therefore depreciated. We'll continue to see growing depreciation expense as we build out our pipeline of premium high-value Care Suites. By comparison, if our Care Suites were treated as IP, our building depreciation expense would have been NZD 6.2 million lower. Lastly, taxation benefit of NZD 10.4 million. We hold NZD 86.9 million of tax losses off our sheet. Each year, we recognize a portion of these losses as a deferred tax benefit to offset any tax expense, mainly relating to fair value movements of our property assets. Moving now to slide 17. This slide provides a reconciliation of reported net profit after tax to our underlying NPAT and underlying EBITDA, which are non-GAAP measures.
These measures are important as they remove fair value movements and capture the actual realized gains achieved on resales and realized development margin on new sales at our sites. To be clear, with a change in our balance date, the underlying EBITDA position of NZD 56.2 million reflects a 10-month period and we compare into a 12-month period on the left-hand side of the table. The right-hand side of the slide provides a segmental EBITDA view with a like-for-like 10-month to March comparison. Of importance to note this year is the change which has been made to our definition of underlying profit. This change was previously discussed at the time of our interim results. In order to better align to our peers who recognize Care Suites as IP, as opposed to PPE, we now include an adjustment to remove depreciation in relation to Care Suites.
As you can see from the slide, this has had an impact of increasing underlying NPAT by NZD 6.2 million in the current period and NZD 6 million in the comparative. Underlying EBITDA in respect to the 10 months to 31 March 2021 at NZD 56.2 million includes good levels of new sales and resales despite operating in a COVID-19 environment where, as we mentioned at the start, the 10 months included a significant portion of days where restrictions were in place. Overall, underlying NPAT is NZD 41.8 million for the 10 months to March 2021. Turning to resale gains and development margins. Strong resale gains of NZD 17.9 million for the 10 months exceed those of the 12-month comparative, up NZD 6.4 million on PCP. This is a result of strong resale volumes and pricing across both Village and Care Suites.
Development margin of NZD 23.8 million is representative of lower individual margins as we move out of the Auckland into the regions. We continue to be pleased with the strong levels of sales we are observing and reiterate that the increased regional mix in resales and new sales will be a theme that continues into FY 2022 and beyond. On the right-hand side of the slide, we provide a segmental view on a 10-month PCP basis. When taking a segmental view in the financial statements and in this table here, we report the resale and development margins for Care Suites in the Village segment as our Village company is legally the issuer of the ORA contracts.
On the next slide, however, we make an adjustment to underlying care EBITDA to illustrate the level of these two gains. The aged care segment underlying EBITDA of NZD 18.4 million, up 20% on the 10-month PCP, reflecting the ongoing transformation of our care portfolio towards greater portion of premium care beds and strong performance. The village segment underlying EBITDA, NZD 55.1 million, up 7% on the 10-month PCP. Continuing to see strong growth in deferred management fee income as developments sell down and resales occur at a higher price point. Finally, the other segment includes support office and central costs. The increase of NZD 2.6 million on a 10-month PCP includes investment in our staff, clinical support processes, and IT, along with increased insurance costs. Moving now to the care segment. Our premiumization strategy is delivering increased EBITDA per bed with an 18% increase over PCP.
This is particularly driven by increased deferred management fee income as our ramp-up sites sell down and mature. As with prior periods, we consider that to get a fuller picture of care, the Care Suite development and resale margins are most appropriately aggregated within the operating care segment figures, given the margins are essentially the near-term offset of earnings forgone in the decommissioning of sites.
Total aged care underlying EBITDA, including this Care Suite development margin and resale gains, was NZD 34 million, up 13% on PCP, and delivers almost NZD 18,000 underlying EBITDA per bed on an annualized basis. Total care underlying EBITDA includes Care Suite development margin and resale gains of NZD 15.6 million in the 10 months to March 2021. These are primarily related to the sales of recently completed developments at Green Gables, Awatere, and The Bayview, as well as Care Suite conversions at a number of regional sites.
Moving to premium revenue. We are continuing to see good growth in recurring premium care revenues from Premium Accommodation Charges and deferred management fees, and we recorded more DMF revenue in the 10 months to March 2021 than we did in the 12 months to May 2020. We will continue to see strong growth in this area while we continue to build and ramp up our premium care developments. The NZD 10.7 million increase from PCP in total aged care operating revenue to NZD 147.1 million is driven by this ramp up, including a material increase in premium revenues of NZD 3.7 million. Moving to operating costs. Staff costs continue to be the greatest contributor to total expenses of NZD 128.6 million. This includes pay increases of 3%-7% for our registered nurses earlier in the year as part of our ongoing efforts to retain key professional staff.
The ramp-up of Green Gables, which opened in September, along with The Bellevue, which opened in March, together drove an associated increase in care operating costs. In summary, the care portfolio continues to perform well with higher group occupancy. We continue to replace the short-term earnings impact with longer-term quality, increasing quantity of premium and earnings. More importantly, we've passed the inflection point in the brownfield development of our portfolio, which we spoke about last year. Moving forward, we will likely see less volatility in our annual care earnings as the maturing and ramp-up of prior period investment plays off. Moving on to slide 19 and the village segment. We show a 10-month PCP comparison.
The village segment has continued to rebound strongly since COVID-19, with sales volumes for both new sale and resale for the 10 months being above all previous full financial years on a retro-active to financial year 2012. Underlying EBITDA of NZD 55.1 million has increased by 8% on PCP. As with care, we continue to see strong growth in deferred management fee revenue to the village segment. Villa and apartment DMF of NZD 22.1 million represents a NZD 4 million or 22% increase on the PCP, and is higher than the full 12 months to FY 2020. This strong growth in DMF, in deferred management fee in the village segment, is set to continue as developments sell down and resales occur at a higher price point. Minor cost increases continue to be noted across occupancy and staffing, particularly in relation to the newly opened sites ramping up.
In the 10 months to March, we opened an apartment development at Green Gables and later in the period at The Bayview and The Bellevue. Total sales continue to be a key feature. We continue to deliver strong growth in sales volumes with 388 total sales in the 10 months to 31 March 2021, a 26% increase on PCP and a 9% increase on the 355 sales in the full 12 months to 31 May 2020. We provide further detail on resale and development gains in the next few slides. Moving to developments. In the area of new sale volumes, Oceania recorded 194 new sales over the 10 months to March 2021. 107 Care Suites, 55 apartments, and 32 villas. A 20% increase on the 10 months to March 2020.
The 107 new Care Suite sales in the 10 months continue to illustrate that this model is well-established and well accepted by residents who want the convenience of a larger, well-equipped room, additional services, and confidence of care in a single move to meet their future needs. ILU and villa development sales increased by 58% on the 10 months to 31 March 2020, reflecting the sell-down of Green Gables as well as sales of new villas at Gracelands, Whitianga, and Woodlands, which were completed towards the end of FY 2020. A softening of the development margin percentage continues. As we have indicated previously, we expect the development margin to moderate in the near term as we move our mix away from recent premium Auckland developments to those in more regional locations. The Sands and Meadowbank in Auckland delivered in FY 2019.
We moved to Awatere in Hamilton, Gracelands in Hawke's Bay, Whitianga, and Woodlands in Nelson in FY 2020. Again, regional deliveries in the last 10 months, 132 Care Suites and 85 apartments completed across three key sites, Green Gables in Nelson, The Bayview in Tauranga, and The Bellevue in Christchurch. Continued strong apartment sales prices have been achieved at Meadowbank and The Sands, which has consequently been offset by the lower price point of Green Gables apartment sales in Nelson. Finally, for this slide, the average apartment price has decreased to NZD 952,000. The average price of Care Suites has also decreased slightly, but this is representative of the sale of Care Suite conversions at other locations, including Eldon in Paraparaumu, Astor in Hastings, and Holmwood in Christchurch. When we look at resales on Slide 20.
As with developments, for comparison purposes, we include both the 12 months to 31 May 2020, and the 10 months to 31 March 2020 comparative. Total resales of 194 for the 10 months to 31 March, was up 31% on PCP and also up on the 166 resales in the 12 months to May 2020. We have continued to see a solid sales recovery from COVID-19 and through the four months since our interim results, with increased resales continuing across all product types, villas, apartments, and Care Suites, compared to both the 10 months to March 2020 and even as compared to the 12 months to May 2020. Encouragingly, as you can see on the top right-hand side illustration, with the exception of Christchurch, we are encouragingly seeing increased resales across all regions.
Moving to the bottom left of the slide, you'll see that the resale prices continued to grow across villas and Care Suites in the 10 months to March 2021. Again, as compared to both the 10-month pro forma to March 2020, and as compared to the 12 months to May 2020. In addition to this, resale margins for Care Suites improved period on period, moving from 11.5% in the PCP to 18.7% in the current period. The resale margins of independent living units have and will continue to moderate down from earlier levels of around 30%. ILU resale margins currently sitting at just under 26%.
Despite the strong growth in resale volumes over the last 10 months, we still have good levels of resale stock on hand presently, with a level akin to that as at 31 May 2020, which at the time was post the restrictions of the COVID-19 lockdown period. This is a positive indicator for resales, both volumes and margins, for the coming 12 months. The final three slides I will speak to cover statutory metrics, the first being cash flow. Oceania continues to demonstrate strong operating cash flow of NZD 96 million, driven largely by the first-time sale proceeds at development sites of NZD 92.7 million. With total CapEx for the period of NZD 102 million, development activity has been, and continues to be, strong, with a number of quality sites recently coming on stream.
Importantly, as per Brent's earlier slides, we were able to hit the 12-month build rate indicated for FY 2021 despite the reduced timeframe as a result of the change of balance date. It's important to note that the key acquisitions at Waterford and Franklin settled post-balance date, and as such, are not included in these numbers. Going forward, we would expect development CapEx to revert back to the higher 2020 levels as a number of developments have progressed, including the high-spec Waimarie development in St Heliers. From a balance sheet perspective, total assets increased by NZD 355 million for the period to NZD 1.9 billion. This increase is driven largely by capital expenditure of NZD 102 million and the CBRE revaluation movements of approximately NZD 160 million across both IP and PPE.
Coupled with the NZD 80 million received through the capital raise to 31 March 2021, which has since been used for settlement of the Waterford acquisition and will also be used for settlement of the Franklin acquisition. On the right-hand side of the slide, we show a reconciliation to the net adjusted value per share, a non-GAAP measure. The net adjusted value reflects the value of existing sites, plus the land and work in progress at development sites, and excludes the present value of net development cash flows and future earnings at these development sites. Our net adjusted value per share as at 31 March 2021 was NZD 1.28 per share. This is a strong increase from NZD 1.03 per share as at May 2020. Again, driven largely by the revaluation uplift in IP and PPE.
As an equity valuation, it strips out the value of refundable ORA payments, being NZD 107 million for Care Suites, the adjusted amount based on the CBRE valuation, and NZD 482 million for ILUs. It's important to note for our IP and PPE balance sheet values already include a CBRE valuation discount on the unsold stock. At 31 March, this was a blended discount of 26%, down from 27.3% at May, and equates to around NZD 65 million or NZD 0.092 per share. As we continue to sell this down, we expect to realize this fair value gain. Net adjusted value is a proxy for valuation at the date of acquisition . It excludes firstly, the NZD 0.092 per share referred to and the incremental development cash flow and earnings, including retail gains and DMFs from the 394 units and Care Suites, which are under construction at 31 March 2021.
The final slide before we conclude our presentation is that of capital structure on slide 24. Our net debt as at 31 March 2021 was NZD 261.5 million, with gearing at 23.9%. This is down from 35.1% as at 31 May 2020, as we have reduced our sold stock value and experienced fair value gains in our property portfolio, as well as having significant cash on hand following the NZD 80 million placement in late March. Further cash will be used to settle the Franklin land acquisition, noting this will be offset by a further NZD 20 million raised from the retail issue. It includes NZD 125 million from our inaugural seven-year retail bond issue, which was successfully completed in October 2020. It achieved full oversubscriptions of NZD 50 million.
This issuance has extended our tenure and provides diversity of funding sources. In March 2021, Oceania announced an equity raise that included an NZD 80 million institutional placement, which successfully completed prior to balance date, and an NZD 20 million retail offer, which has successfully completed during April. Both were well-supported and strongly oversubscribed. We have NZD 204.9 million net bank debt drawn at 31 March 2021. This provides us with NZD 145 million of headroom in our banking facilities. Low gearing, coupled with sufficient bank facilities in place, puts us in a great position for future growth and enables us to execute our development pipeline. Thank you, everyone. That concludes the finance section of the presentation.
I think we are open for Q&A. I think last time what we did was we took Q&A from people on the call, but we had a number of questions on screen. I thought while we're getting underway, I might just address some of the Q&A that we have on screen, and then we can get to questions on the phone. The question has been put to us in terms of can you give us a sense of what level of debt or work in progress will be required to complete the current pipeline? If we think over the next period, I guess, traditionally the business has spent about NZD 100 million-NZD 120 million on capital improvements. I guess what we look at is what is our overall gearing position.
We try to sit around 30%-35% gearing. Obviously, the business through its care operations generates strong cash. From an operating basis, we recover about NZD 90 million of operating cash on an annualized basis. We're pretty confident that we have that level of debt in place, and we'll have cash to offset it, which means that it will have significant headroom for either advancing the portfolio or for securing other greenfield sites. A second part of that question was going to further acquisitions. The question was how much headroom does Oceania have for further acquisitions? Once we pay down Franklin through the NZD 20 million retail offer that we receive shortly, we'll be in a situation where we will use the NZD 145 million additional capacity that we have for accelerating our business.
If greenfield sites come along, we think there's actually a ready supply of greenfield sites, if we think about the structural changes that are happening to house builders in the market, that's obviously a ready source and a pivot that we want to put underway as it relates to our strategy. From an M&A perspective, we're very fussy about M&A. We think Waterford is a great transaction. They do not come along every day. We'll take a very prudent approach to bolt-on acquisitions and M&A in the future. The next question that we had was, given the strong balance sheet and circa 1,500 units are consented, is there an opportunity to accelerate the build rate? We've traditionally given guidance of our build rate in the 200s. I think build rate also goes to sales cadence.
What's your confidence that as you build, you're going to be able to sell? We're seeing really good market trends as it relates to our sales cadence. We're having strong inquiry. We've got a mature portfolio. We're a nationwide operator, so people are seeing us in their local communities. We've got a brand that we're intentionally investing in. We've got some favorable market conditions. We're very confident around sales cadence, and we're also very confident around sales volumes. That will give us some confidence about bringing more product to market sooner. The challenge that we have is, as people are aware, it typically takes about four years to develop things. A year for resource consent, a year for building consent, and a couple of years of construction.
We've just got to be mindful that while we have a great portfolio and while we have a lot of consented product, we have to obviously be able to move through that cycle and have things constructed. We will hopefully be able to talk a bit more about build rate as the new financial year progresses. Third and last question that we have online was just in relation to what proportion the recent acquisitions may play in terms of improving our underlying EBITDA or underlying NPAT in the next year. I think when we did the Waterford and Franklin transactions, Franklin is obviously a greenfield site, and so initially it has a holding cost. Our cost of funding is relatively cheap. As a consequence of that, the option value of that greenfield site offers us a lot of attraction.
On the Waterford front, because there's no additional cost required in operating the facility, the facility is immediately earnings accretive for us and has a positive impact on our results going forward. We've guided the market to low-to-mid single-digit earnings per share accretion. We do expect that as that portfolio matures, it will deliver strong recurring earnings for us through DMF. I mentioned earlier that 100% of the villas that are on-site are occupied. They've been occupied since 2014. There's been quite significant house price inflation since then, and we will start to experience some of those first resales over the coming period. We're expecting Waterford to be a very positive contributor to our earnings, and Franklin clearly in the medium term will be a very positive contributor to our earnings. Those were the sort of questions we had online.
I certainly open to questions from people on the call.
Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Please state your name before posing your question. We will take the first question from the first participant. Please go ahead. Your line is open.
Good afternoon, everyone. It's Andrew Steele from Jarden here. Can you hear me?
We can hear you, Andrew. Yes.
Great. Thanks, Brent. Just the first one from me, you've partly addressed it on development build rates. It's only a relatively modest increase into next year. One quick question on into next year, have there been any projects which might have slipped out of the planning for next year that have gone to later periods? In terms of thinking about later periods, so FY 2023, FY 2024, what's the pace of development we should expect in that near to medium term?
Yeah. Nothing has slipped out. We've been very focused on recovering any ground that we might have lost through COVID. We haven't run into any problems as it relates to our planning and consenting of items that we had underway. We've been sensitive to our local communities and thought about the demand for the product that we're bringing to market relative to our competitors. I think I touched on it on one of the slides. Awatere in Hamilton is progressing significantly better than we expected as it relates to the construction, and there are 63 units and community centers that currently are scheduled for completion in FY 2023. If that continues to run well, that might be something that swings into one year or another. The rest of the product is mapped out from here as it relates to the building construction.
Part of the attraction for us with the Waterford acquisition is we had resource consents in place, and that is one site that probably we have an opportunity to accelerate as it relates to the build profile. In the longer term, we absolutely intend to lift our build rate. We've just got to be sensitive to the availability of labor and the cycle around just that couple of years to construct things. If we think about Eldon, with COVID, we lost some of our construction windows, so we took on board the additional cost of putting three teams on site there to have it coming to market in April. We're open-minded to the success of projects where we can accelerate them. There are some items that you can't obviously change that are already sculpted into the project.
We're also mindful of keeping our gearing around that 30%-35% in the medium term.
Great. Thanks. Just the next one for me is on care profitability, which on an EBITDA basis is broadly flat since the first half, which looks like you've just got more product in the commissioning phase of development. Taking into account your planning for developments and the phasing of those over the next year, how should we think about the change in this metric over the next two halves? Should we be expecting it to return to growth for both periods?
Yeah, I think that's a good question, Andrew. I think we've got a number of our sites that are coming out of commission and into ramp-up, and a number of our sites going from ramp-up into maturity.
I think from our perspective, we're going to expect to see this gradual but continue to be pronounced improvement in the premiumization of care and our care earnings. I did indicate that more of our build in the coming period is tilted towards units rather than care. We're starting to get that kind of operational efficiency in our care operations. We're focused on care earnings per bed at an underlying EBITDA level, regardless of development and resale margins. We're expecting that to continue to lift as the portfolio gets more mature. The other thing that's happening is that we just have far less disruption in our care earnings going forward. This is less about bowling over existing care, it's less about conversion of rooms. It's more a matter of vacant land that's available to us. Lady Allum in this next period is a good example.
We're bringing 113 Care Suites to the market, and it's being built alongside the existing care operations.
Great. Thanks. The last one from me is on the change in accounting for underlying earnings. I take your comment that you want to align with some of your peers. Could you go through your rationale and landing on, I guess, that side versus you're removing a maintenance proxy out of your underlying earnings and therefore, you're moving underlying earnings further away from what might be a sort of a cash-type earnings?
Yeah. I guess a way of looking at it is we're trying to align those accommodations, Andrew Steele, in ORA to treat them the same. We treat Care Suites as property, plant, and equipment, which attracts the depreciation, and other peers have them as IP, so there's no depreciation there. In our underlying, arriving at that, we back out all of the fair value gains and losses that come through from CBRE, and then bring in our realized gains on those ORAs. From a Care Suite perspective, we're backing out the fair value, and we're bringing in the realized gains, but we're inadvertently leaving behind the depreciation. The reason for backing out that depreciation is so that we can treat everything as an ORA the same. All of our ORAs are effectively, for underlying purposes, treated like IP and therefore aligning better with peers.
If we think about that, Andrew, on a period-to-period basis, obviously we've restated the prior period. It's about NZD 6.2 million playing NZD 6 million. There's about a NZD 200,000 difference at that level. The other thing that we're obviously cognizant of, if we take Green Gables as an example in Nelson, it's the same building that is offering both an independent living experience and Care Suite experience. We're depreciating one at 33% and one at 50%. It's actually just bringing consistency to the treatment of depreciation, which we know is a non-cash item, given the fact that we're an integrated offering on a lot of the new sites that we're developing.
You didn't consider bringing in all your maintenance CapEx into underlying earnings to make it a fairer representation of the true earnings?
That hasn't been considered, Andrew, no.
Okay. That's all for me. Thank you.
Thank you. We'll now take the next question from the participant. Your line is open. Please go ahead.
Yes. Hi there. This is Aaron Ibbotson from Forsyth Barr. Thank you. I got a couple of minor questions. First, I just wanted to probe on your 221 new units for FY 2022. My understanding is that that doesn't include any conversions. You had a few historically. I wondered if you were planning to have any this year.
I think you're right, Aaron. It doesn't involve any conversions. I think one of the sites that we are trialing a conversion into Care Suite product is Eldon in Kapiti Coast. We're doing that on a very incremental basis, so sort of one or two at a time. Conversions in the portfolio are not material in that sense.
Okay. Secondly, just on the Village operating expenses, which I believe you had NZD 20 million or so reported. If I take out this rental payment to Everil Orr, that seems to grown quite a lot. I guess the annualized growth there to be almost 30%. Just wondering if I'm missing something there?
Yeah.
Why did that grow so much?
Yeah. There's a few things going in there. There's the investment in staff, which we've done across the board, but specific to The Village, there's the cost of newly opened sites in there. We have the cost in relation to the apartments at Green Gables, which opened in September, October, and then we also have the cost in relation to Bayview and Bellevue. Those sites opened in March, but there are still
costs that are incurred in the weeks, months running up to in getting a site ready for opening day. Obviously, it kind of skews the numbers a little bit in the first few months because you're not getting that revenue in, but we are beginning to incur costs.
If we think going forward, I'm annualizing it, excluding these rental payments, I guess around NZD 20 million. If you're saying that ramped up towards the end of the year, presumably that number is going to grow quite a lot again in 2022.
Because if we think about what happens in 2022, as it relates to Lady Allum, that development is alongside existing care. Eldon obviously is a village, it doesn't have the same operational drag that Kathryn's just referenced. Bayview equally, the 39 apartments there are accented to using existing resources. We've got some small villa developments obviously in Gracelands and Stoke. It's a good question, Aaron, it won't have the same drag we do not expect in the FY 2022 period.
Okay, thank you. This is just a little general question, which I assume the answer will be yes to. If we look at your 10 months period on things like DMF, for instance, is it fair to sort of annualize that? I multiply by 1.2 and see that as your base level, or is there anything else going on in the accounts? Presumably not, but the growth, it was pretty strong if I annualized the 10 months.
Yeah. Obviously we can't do that because we've had 10 months of trading, but I think your sentiment is exactly right. Part of the intentionality around the premiumization of care is to capture that ongoing annuity income through DMF. We've experienced over a number of years now, quite an attractive compounding annual growth rate, we're not expecting that to change.
Thank you. Finally, just on your Care Suites resale margins, which came in quite a lot higher than we had anticipated. Obviously these are coming up for resale on a pretty short-term basis. Do you think still that you've got decent resale margins coming up or should we expect that to sort of trend back towards quarter to 10%-12% level?
I think we were pleasantly surprised by those resale margins as well, Aaron Ibbotson. I think you're right. It depends on a number of factors, including the regional bias that we have in terms of some of those Care Suites coming up. We have observed tenure being probably shorter than we anticipated, and so therefore, that means that the market needs some time to catch up in order for us to capture the full sort of resale gain. I think whether it's there or whether it's slightly lower, as a product of what we have available and in what regions. We are establishing Care Suite as a product. We are seeing good price points, both at the new sale and resale level. I'm not sure that accurately answers your question.
Yeah. No, that's fair enough. Finally, would you say are there any lingering sort of COVID costs in the 10-month period, or was that largely done by the time we got to May?
I think the only thing that the sector is working through is really the rollout of the vaccination program. That's going really well for our sites and for our residents. That obviously comes with some operating complexity. We're just absorbing kind of the margin loss of that. Obviously, we're not paying for the vaccines, but we're certainly paying for just the extra resources around that, as vaccinators come to site and the orchestration of that through extra staffing costs. We're experiencing that and so are our peers. We know that it's for the greater good, we'll just absorb that marginal impact.
Okay, very good. Thank you. That's all for me.
Thanks, Aaron.
Thank you. We'll now take the next question. Please go ahead. Your line is open.
Hi, guys. It's Bianca from UBS. First question from me, just on your resale prices. Mainly I'm interested in the apartment resale prices being basically flat compared to resale prices a year ago. At the same time, you show that the resale volumes in Auckland have increased. I'm just wondering if that means, have you not really increased apartment resale prices or are apartment resales mainly outside of the Auckland region or, yeah, what's the reason for that, please?
I think you're right. I think we had from the slide presentation 79 sales in Auckland. Some of those sales while in Auckland have moved away from some of our flagship sites. We've obviously had a lot more regionally up and down the country, so that sort of influences our price as well. From our perspective, we're seeing both demand for product and continuing ability to move prices. I don't think there's anything that we're observing that's changed. There's been a bit of a lift in villas, and we're sort of holding resale prices around the same levels. I think it is much within that Auckland bias. There are obviously some stronger sites that we had in the North Shore and other locations. Now we're sort of drifting south and west as it relates to some of those resale prices.
I think to add to that, Bianca, most of our resales on the Auckland sites at the moment are Care Suites. Obviously those premium sites that came online over the last few years, like I'm thinking Sands and Meadowbank, the apartments aren't actually at their maximum tenure yet, so we're not having the resales at those sites, but we are having the care resales at those sites.
Right. Okay. More regional, I guess.
Okay. Thank you. Just on your new sales as well, I thought for the second half, they looked a bit weak actually. That means that for the second half you've done 49 new sales, and I know it was only a four-month period, especially comparing that to the second half of FY 2020, it's quite a bit lower. I was just wondering what's the reason for that and also if you could please give a bit of an indication of how new sales are going for the first half of FY 2022.
Okay. I think if I start with your last question first. FY 2022 has been good. I think our sales and LPs are continuing to see good uptake across our portfolios and products that we have. Sales momentum, sales velocity and sales pricing have all been strong. The Waterford's a good example. I mean, we took position of that on the 23rd of April, and we've already had three sales and a couple of applications. The new sites that we're bringing to market, it's sort of same. As it bodes where we stand today, sales velocity is going very well. As it relates to the four versus four, some of that's just that there's not an enormous amount of seasonality in our 12-month period.
Some of that will just be relating to some of the hesitations and sentiments that were being portrayed in the recent four-month period we've had as people start thinking about the trail of COVID. We thought we were out of that, and now we have travel bubbles closing, et cetera. I don't think there's anything untoward in that. We haven't seen any sort of need for any seasonal adjustments period to period.
Okay. Just following up on that, I guess, on your new sales, are there any regions where you're having difficulty selling? Is there any particular type of product that's selling better or worse? For example, more higher end compared to a more basic product?
Yeah. I think part of what we do obviously is a lot of market analysis before we come out of the ground in terms of what's going to suit a particular location, how it's going to sit in that location, and how it's going to be adopted by the community that it's in. A good example is Gracelands in Hastings. We've seen incredibly strong sales and resales for our villa product in that region. Contrasted with, say, apartments that have traditionally gone very well for us in the Auckland region. It's a difficult thing to answer. It is nuanced around what we have. What we're seeing is that Care Suites appear to sell through nationwide. There's an adoption of that product nationwide, because it's got a greater bias towards being a needs-based product.
As it relates to independent living units, it's sort of nuanced around the region and what suits that particular market and also what's available from the competition.
Okay. Great. Thank you.
Thank you. It appears there is no further questions at this time. I'd like to turn the conference back to you for any additional or closing remarks.
I just want to thank everybody for being on the call. It's a busy day for the market, and there's a lot going on, so thank you for everybody's participation. We're excited about the result, and good to be on a 31 March balance date. Very pleased to have Kathryn sitting in as CFO, so delighted with that appointment. Hope the rest of the day goes well for people. Thanks for your time.
Thank you for your participation. You may disconnect. See you soon.