Overseas investors pile into ‘safe haven’ GemLife’s $750m IPO

But the sale – which market sources said was more than two times oversubscribed – also tapped both the growing need for affordable housing for downsizing baby boomers and the increasing demand of investors to buy into the promise of resolving Australia’s chronic housing undersupply.

“Offshore capital has seen Australia as a safe haven, particularly in this calendar year with the global turbulence and uncertainty,” chief executive Adrian Puljich told The Australian Financial Review after the sale.

“We’ve been able to put together a strong [share] register – one that sees value in Australia’s downsizer market.”

The sale of 180.3 million shares priced at $4.16 gave the company – the fourth-largest land lease operator after ASX-listed rivals Stockland and Ingenia and US-based Hometown – a market capitalisation of $1.58 billion.

In the land lease market, which consultancy Chadwick Property Valuers last year valued at $13.5 billion, customers – usually downsizers selling their family house – buy a new home in a master-planned community on land they do not own, but rent, often aided by Commonwealth Rent Assistance.

GemLife, which will remain 43 per cent owned by the Puljich family and Thakral Capital, will have 9836 home sites across 32 completions after the inclusion of 3325 sites owned by Aliria over the period to end-FY31, 2200 of which will transfer to GemLife next month.

GemLife’s portfolio includes 2522 sites under development, 1380 development-approved sites and 4130 greenfield sites.

Centuria Capital Group chair Kristie Brown will chair GemLife, while former insurer nib CEO Mark Fitzgibbon and former RetireAustralia CEO Alison Quinn will be independent directors.

Bethal Singh Thakral, CEO of the Singapore-listed Thakral Group, will also be a director. Ashmit Thakral is chief financial officer.

The company wanted to grow further, Puljich said.

“There’s obviously ambition to grow beyond what we have,” he said. “The most important thing is the fact we’ve got a guaranteed pipeline of sites to deliver over the next 10-plus years. But there will be opportunities for GemLife to continue to look at opportunities that complement that portfolio.”

But it faces the same fluctuations and constraints as other operators in the sector. Settlements of new homes were likely to fall to 333 this financial year from 355 last year as weather conditions delayed scheduled completions.

That figure is due to rise to 408 in the year to June 2026, but the average home sale price will fall to $710,000 from $745,000 as the mix of settlements skews towards standard-value homes in new communities and away from premium ones in established communities, the company says.

That product mix would also lower the average home build profit margin from $371,000 to $352,000, or from 49.8 per cent to 49.6 per cent.

Last year the company said it generated revenue of $266.3 million and pro-forma underlying net profit after tax of $81.7 million. This year revenue will rise to $269.5 million and $86.2 million in underlying profit and next year revenue will rise to $313.7 million and proforma underlying net profit to $105.5 million, it said.

In 2023 the Puljich family sold five land lease communities from their Living Gems portfolio – a separate business of sites solely held by the family – to ASX-listed Stockland for $210 million and a year later sold a pool of seven communities to Avid Property Group for about $247 million.

The initially reported deal was for a sale of eight communities, but one subsequently failed to meet the conditions precedent and did not sell to Avid, Puljich said. Its sale to another party was likely to settle in the third quarter of this year, he said.

As a consequence of the GemLife IPO, Adrian Puljich will step away from Living Gems, which he has run since 2010 and that will be managed by his father Peter – who pioneered the business with wife Zdravka in 1982 – and brother Anthony.