Property developer GemLife bets on land lease model to solve housing crisis

The IPO breaks the drought of major raisings in the property sector and shows that demand is strong for housing stocks.

GemLife chief executive Adrian Puljich is leading the business as it floats on the ASX

Property developer GemLife has locked in plans to list on the Australian Securities Exchange after raising $750m and is bullish about expanding after buying a major land bank.

The company, which is billed as one of Australia’s largest residential pure play land lease developers, will join the likes of Ingenia and Lifestyle Communities as listed players in the fast-growing market.

Big players, Stockland and Mirvac also have an exposure to the area that is pitched as a form of affordable housing that can help address the housing crisis in the sector. The fortunes of housing companies are also on the rise as interest rates come down, and home sales pick up.

GemLife’s initial public offering of 180.3 million securities has been priced at $4.16 per security after it was upsized to raise about $750m.

The company has also entered into a deal to acquire the Aliria property portfolio for a headline price of $270.3m, giving it a pipeline of new estates to roll out.

A GemLife project on the Gold Coast.

GemLife CEO Adrian Puljich said that GemLife is bullish about the impact that listing will have on bolstering its model. “Having another land lease community operator on the listed market shines a greater spotlight on what this sector is able to achieve,” he said.

“There’s no doubt that land lease communities are the housing crisis solution when you compare it to build-to-rent,” he said. “This is a model that works both for the customer and for the operator in perpetuity.”

Mr Puljich said the sector has more than 50 years of demonstrable success for both customers and operators and both were incentivised to keep investing in the model.

The CEO said that GemLife had a large advantage over many rivals as it was a fully integrated platform and built its own stock. “We are able to control quality, we’re able to control our finances. We’re essentially not beholden to third party contractors or consultants,” he said.

Mr Puljich said this allowed the company to do more with its dollars than its listed and unlisted peers because of the fact it had its own building license and internal units. He said this made the company a unique proposition that was yet to be seen in the seniors living space on the listed market.

GemLife will use the proceeds to fund the acquisition of the portfolio, including its initial eight projects, repay debt and other liabilities, provide cash for working capital purposes and pay for offer costs.

The public offer is via brokers who have bid into the book. Banks working on the offer included JPMorgan, Morgan Stanley, Highbury Partnership, Ord Minnett and Morgans.

GemLife is majority owned and led by its founding partners, the Puljich family and Singapore’s Thakral Capital. The Puljich family have over 40 years of experience in the sector. The founders are not selling their holdings in GemLife and will remain the largest investors after the raising. The Puljich family will hold 26.3 per cent and Thakral Capital will hold 16.7 per cent.

The company expects to start trading on the ASX on July 3.

After buying the Aliria portfolio, GemLife will have 32 estates and projects in the pipeline, which are expected to comprise 9,836 sites across Queensland, NSW, Victoria and SA.

Mr Puljich said the company had a national portfolio of 32 projects, powered by its vertically integrated model. “Our communities are designed to support active, connected lifestyles while offering a more cost-effective housing option for Australia’s over-50s population, helping to address key challenges in housing accessibility,“ he said.

“Our vision remains clear: to lead the way in the downsizing sector,” he said. “Our goal is to help people unlock the equity in their homes and embrace a lifestyle that offers more freedom, connection and peace of mind.”

GemLife is headquartered in Queensland and is chaired by non-executive director Kristie Brown who also heads Centuria Capital. GemLife’s executive team consists of Mr Puljich as CEO and Ashmit Thakral as CFO.

Ms Brown said the acquisition of the Aliria portfolio “represents a strategic and transformative growth opportunity” for GemLife, “significantly expanding our development pipeline and setting the stage for our long-term success as a listed company”.

GemLife develops premium resort-style living for homeowners aged 50 and over, designed to support a high quality, active and socially engaged lifestyle.

Between fiscal 2017 and fiscal 2024, GemLife sold and settled over 1,804 homes. It has had an average home build margin of about 50 per cent and generated home settlement revenue of about $1bn.

Some funds managers have shied away from the float as rival operators have been sold down and the risk of the margins shrinking as the business expands.

Originally published as Property developer GemLife bets on land lease model to solve housing crisis