Australian family scores $417 million windfall from business that grew from a trailer park

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A retirement living business that grew from a trailer park on Queensland’s Gold Coast has made a healthy landing on the Australian stock exchange, handing a father and son a $417 million payday.

GemLife shares began trading on Thursday at $4.16, following a $750 million initial public offering, one of the largest on the local sharemarket so far this year. The shares closed the session 4 per cent higher at $4.33, valuing the company at $780.7 million.

Gemlife chief executive Adrian Puljich with Gemlife residents at the ringing of the bell as the stock made its ASX debut.

The $750 million raised by the retirement living provider was ahead of Virgin Australia’s $685 million initial public offering last week, although the airline – rescued from voluntary administration by Bain Capital in 2020 – has a larger market capitalisation of $2.3 billion.

Croatian immigrant Peter Puljich started the business on the Gold Coast nearly four decades ago, building retirement homes on a trailer park for over-50s who wanted to give up work early and downsize in style.

Since then, GemLife Communities, now run by his 37-year-old son, Adrian, has become one of Australia’s largest land lease community operators – a sector that offers residents aged over 50 lower-cost, resort-style living in attractive locations with ready access to lifestyle and community benefits.

Residents typically buy a home – usually prefabricated – in an upmarket community developed by GemLife and then lease the land under it for a weekly fee of between $230 and $250, which also provides them access to facilities such as gyms, pools, bowling alleys, cinemas and country clubs.

Homes sold by Gemlife range from between $600,000 and $2 million.

As part of the IPO, GemLife has agreed to buy the Puljich family’s Aliria portfolio of eight communities for $270.3 million. The family will retain a 26.7 per cent chunk of the listed company, giving them a combined estimated windfall of around $417 million, according to Bloomberg.

Once the IPO and the Aliria deal are bedded down, GemLife will control 32 communities and have a development pipeline of 9836 home sites across Queensland, NSW, Victoria and South Australia.

Croatian immigrant Peter Puljich started the business on the Gold Coast nearly four decades ago, building retirement homes on a trailer park for over-50s who wanted to give up work early and downsize in style.

“More than ever before, older Australians are healthier, more active and looking for places that support the way they want to live,” Adrian Puljich said.

“[The listing] reflects the hard work and dedication of the entire GemLife team over the past eight years, and pays tribute to the decades of entrepreneurial groundwork laid by my father – a legacy that helped inspire my own path with GemLife.”

The GemLife brand was created in 2015 when the Puljichs teamed up with Singapore-listed Thakral Corp in a joint venture that Adrian has since run as chief executive.

The newly listed company is not alone in catering for retirees.

Established player Ingenia Communities is a direct competitor. The $2.2 billion ASX-listed property manager also develops and owns communities targeted at over-50s, as well as holiday parks and rental businesses. It reported improved revenues and profits last year on the back of turnaround efforts by its chief executive, John Carfi.

Another competitor, South Melbourne-based Lifestyle Communities, has a market capitalisation of about $844 million.

The clubhouse at GemLife’s community on Queensland’s Sunshine Coast.

The land-lease community sector, with its steady annuity-style income streams, has been attracting institutional capital in Australia, with joint ventures and significant investments in recent years.

A year ago, Hong Kong-based real estate private equity firm Gaw Capital Partners and Australian alternative real estate fund manager GreenFort Capital created a joint venture to acquire and develop a pipeline of $800 million in projects focused on communities for people over 50.

Locally traded property giant Stockland has been expanding within the segment under the brand Halcyon, which it bought in 2021 for $620 million.

Limitations of the land-lease communities include fees that can potentially increase over time and regulations that are made at a state level, resulting in considerable variation between jurisdictions.

With Bloomberg