This migrant family business will knock off Virgin as the biggest IPO

The Puljiches moved to the Gold Coast for Peter’s work as a renderer and plasterer in the early 1980s – business was booming, particularly on high-rise buildings on the Gold Coast – and bought a caravan park in 1982 to house materials and workers.

Next door to the caravan park was a retirement village being converted into a land lease community – an over-50s style village.

Puljich senior saw the lightweight construction methods – little more than cabins on stumps – and was shocked. “He said: ‘How can people be putting their parents in cool rooms?’ ” his son says. So, Puljich senior went off and designed a different building method, one that starts with a solid concrete slab that remains at the heart of every GemLife home today.

That family business, now run by 37-year-old Adrian, has grown to 32 of these land lease projects (15 of which are built or under development, mostly in Queensland). They have 1804 occupied homes and another 10,000 or so pegged for development.

GemLife is a developer, builder, owner and operator, selling new homes for about $795,000 on average. It charges home owners $230 to $250 a week to live in its gated communities and have access to their swimming pools, bowling alleys and even end-of-life care units.

Now it is also this year’s biggest IPO candidate to date.

Puljich junior wants to raise about $700 million to $750 million for the initial public offering, which is about $50 million more than Virgin. The young chief executive has been in front of institutional investors this week, while his stockbrokers are calling for cornerstone bids on Friday.

If successful, it would list with a $1.5 billion-odd market capitalisation. Investors were told that, barring any late mishaps, a prospectus should be lodged with the Australian Securities and Investments Commission next week. A bunch of retail brokers are lined up to buy, and sell, stock to retail clients. They’re calling it Project Fusion.

It’s a family business backed by Singaporean property investor Thakral. Puljich’s junior’s now wife joined the business before he did (back when his dad still ran it).

The No.1 question is: why list it? We hear all the time that the ASX is too tough, has too many compliance obligations and too many distractions for a busy private business like GemLife.

“We’re hoping to make a difference for the downsizing market,” Adrian Puljich says.

“There’s a housing crisis compounded by a land crisis and for us, it is about freeing up some existing homes. We’re making a difference as a downsizer and freeing up our customers from those homes and allowing working families to move into those homes.”

But how does being listed help?

“It gives us a profile to demonstrate that we are a vertically integrated machine that can do what our listed peers have struggled to do,” he says. “That’s delivering a product on time, delivering it for a profit and allowing our customers to also enjoy profit at the time of sale.”

The answers investors will be looking for is balance sheet. About $400 million of the funds raised will be used to repay existing debt and subordinated notes.

The more GemLife develops, the more money it typically makes. The whole business is about making a margin on development and recycling that profit into projects, to keep the money machine spinning. Meanwhile, it collects weekly rental fees on every occupied home.

The stronger the balance sheet – and the more access to capital, should it be required in the future – the better it should be able to turn a project pipeline into profit. Remember, it has about 1800 homes on its books and wants to get to about 10,000.

“That’s not a philosophical or a hypothetical pipeline that may happen if there’s a rezone or a change of government,” Puljich says. “These are sites that are plug and play. They are ready.”

It fits into the housing shortage at the top of the funnel – existing home owners. At $795,000 a pop on average (but up to $1.85 million), its homes are nearly always bought by downsizers moving out of their larger family homes, which frees space up for others who need it.

Does it really help with the housing crisis? A bit. Australia is trying to build 1.2 million new homes by 2029 (or 240,000 a year), while GemLife has 9836 expected total sites, which means it will take a lot of GemLifes to solve the bigger problem, which is supply.

There are few GemLifes out there, including on the ASX with both Lifestyle Communities and Ingenia well known to institutional investors.

GemLife would argue its business model (more vertically integrated) and product (sturdier) are different. It took investors on a site trip to Queensland a few weeks ago to prove it.

Puljich junior told them he wouldn’t run around buying caravan parks or smaller operators – everything GemLife does is from the ground up and based on his dad’s concrete slab system.

GemLife expects to report $104.2 million underlying profit in the year to June 2026. It expects to settle about 400 new homes next financial year (up from 333 in FY25).

Former market darling Lifestyle Communities trades at 19.9-times forecast profit, Ingenia is 17.4-times. About a $1.5 billion market capitalisation would imply about a 15-times multiple for GemLife.

The Puljiches will retain about a 30 per cent stake, while Thakral will also keep a significant stake.

Should it list, GemLife will join the long list of founder and family-backed businesses transitioning to the ASX. That’s good news for investors.

There are plenty of founder traits there – including ones that can make investors wary.

Some of the funds raised, for example, will be used to acquire another of Adrian Puljich’s companies Aliria.

Alira is contributing 12 of GemLife’s 32 sites for $270.3 million (on a cash and debt-free basis). Investors have been crawling over the independent valuer’s report in the pathfinder prospectus.