The Gemlife Communities Group (ASX: GLF) share price has jumped 5% after the business joined the ASX boards after its IPO.
Gemlife says it’s one of Australia’s largest residential pureplay land lease community developers, builders, owners and operators focused on building a portfolio of premium assets in Australia.
Gemlife’s initial public offering success
There have not been too many initial public offerings (IPO) of more than $1 billion in the last few years, though the market is warming up again after the recent Virgin Australia (ASX: VGN) IPO.
The IPO offer price of $4.16 translated into a market capitalisation of $1.58 billion, with the business now valued even higher after its first day of success.
Investors may be attracted to the fact that the business has a large pipeline of projects.
It currently has 10 active communities with a total of 1,804 homes. But, it also has the following:
- Five projects under development with 2,522 homes
- Seven projects with 1,380 homes that have been granted development application (DA) approval but development is yet to start
- Six greenfield projects with 3,005 sites where DA approval has not been granted (yet)
- Four greenfield projects with 1,125 that are expected to be acquired after the IPO
What are the positives?
In the company’s prospectus, the business noted that its portfolio is diversified across the states of Queensland, NSW and Victoria. An acquisition is expected to see it expand to South Australia.
The business also said:
GemLife benefits from a strong and fully integrated business model, which offers investors Site Rental Income from long‑term owner‑occupied Sites, providing predictable and non‑seasonal recurring cashflows, plus Home Settlement Revenue from the development and sale of Homes.
In FY24, it made $266.3 million of revenue and underlying net profit after tax (NPAT) of $81.7 million.
In the 12 months to June 2026, it’s expecting to make $313.7 million of revenue and generate $105.5 million of underlying net profit.
The company is majority owned and led by its founding partners, the Puljich family and Thakral Capital who have 40 years of experience in the sector. The founders didn’t sell any shares in the IPO process and will remain the largest shareholders after the IPO. The Puljich family will hold 26.3% of the business and 16.7% will be held by Thakral Capital.
The business also noted it has entered into an agreement to buy the Aliria portfolio for a purchase price of $270.3 million, which is expected to add up to 12 projects and 3,325 home sites.
Gemlife also pointed out its growth is underpinned by an “attractive sector thematic” with the industry “optimally positioned to benefit” from an ageing population and downsizer dynamics. The sector can provide a “cost‑effective accommodation solution for Australia’s over 50’s population and are well placed to assist in addressing such challenges.”
Time will tell whether investors are right to be excited about the Gemlife Communities Group (ASX:GLF) share price.
