Thakral Corporation&rsquo s wholly-owned subsidiary Paramount Investments is subscribing for unlisted units in the Riverwalk Fund II for an investment amount of INR425 million ($6.3 million).

 

The company will make a capital commitment of about INR420 million and directly subscribe for unlisted Class B units in the Riverwalk Fund II, an Indian domiciled fund which has been registered with the Securities and Exchange Board of India, and invest INR5 million in cash to acquire 10% interest in Riverwalk Investment Manager LLP, the sponsor and investment manager of the fund.

 

The funds will be used by Riverwalk Investment Manager to subscribe for unlisted Class E units in Fund II, thereby giving Paramount Investments an additional indirect interest in the first fund.

 

Alongside Paramount Investment, the co-investors of the Riverwalk Fund will be Karan Singh Thakral, and independent third parties unrelated to the Thakral family.

 

Riverwalk Fund invests in the securities of fast growing companies to create a highly-qualified diversified portfolio in B2B software solutions & services, fintech, consumer brand & consumer platforms, and application of technology to traditional industries like real estate among others.

 

The fund is close-ended with a tenure of eight years from the first closing which may be extended by the investment manager by up to two years with the prior consent of two-third majority of contributors.

 

Thakral says that India presents a compelling investment landscape driven by several factors including a growing working-age population, rising per capita income, fiscal discipline and favourable global trends such as the &ldquo China+1&rdquo strategy. The joining of Riverwalk&rsquo s fund allows the group a broader view of the market and opportunity to participate in these growth sectors.

It ends first day of trading up 4.1% at A$4.33, with 9.12 million stapled securities transacted

 

[SINGAPORE] Thakral Corporation&rsquo s investee company in Australia, GemLife Communities Group, on Thursday (Jul 3) debuted on the Australian Securities Exchange on a conditional and deferred settlement basis. 

 

On its first day of trading, GemLife rose 4.1 per cent to A$4.33, logging a market capitalisation of A$1.65 billion (S$1.4 billion), with 9.12 million stapled securities transacted, Thakral said in a statement.

 

GemLife&rsquo s initial public offering (IPO) is Australia&rsquo s largest this year &ndash it raised A$750 million from around 180.3 million stapled securities offered at A$4.16 apiece.

 

The lifestyle resort operator intends to use the proceeds from the IPO to support its growth, including the acquisition of the Aliria Group portfolio, which is expected to increase its pipeline from about 6,500 homes to 9,836.

 

The funds will also be used to reduce debt, strengthen its balance sheet, and as additional working capital.

 

Thakral subscribed to an additional 600,962 GemLife stapled securities at the IPO price, bringing its holdings to about 64 million stapled securities. It has an effective interest of 31.7 per cent in GemLife.

 

Thakral associate GemLife inks underwriting agreement for Australian IPO launching &lsquo very shortly&rsquo  

It noted previously that its effective interest in the Australian company would be around 16.8 per cent post-dilution.

 

Four decades ago, Peter Puljich turned a trailer park on Australia&rsquo s Gold Coast into a high-end retirement community for the over-50s. The Croatian immigrant reasoned that baby boomers, such as himself, wanted more out of life than to work into old age &mdash they wanted to retire early and downsize in style.

 

That project to sell homes in the country&rsquo s sun-drenched northeast was the starting point to what would lead to GemLife Communities Group. GemLife was created separately in 2015 when Peter and his son Adrian teamed up with Singapore-listed Thakral Corp in a joint venture. It is now a A$1.58 billion ($1.32 billion) business run by Adrian and set to deliver a major payday for the family.

 

GemLife will start trading in Sydney on July 3, following a A$750 million initial public offering &mdash the largest in Australia this year. The listing values the two men&rsquo s combined stake at about A$417 million, according to Bloomberg&rsquo s calculation.

 

&ldquo We are a founder-led pioneer business. What makes us so unique is the fact that we build our own product,&rdquo said CEO Adrian Puljich, 37, in an interview. &ldquo Every single touch point in the life cycle of GemLife Communities is dealt with by the GemLife builder.&rdquo

 

GemLife operates at the luxury end of Australia&rsquo s land-lease community sector, where residents aged 50 and over buy a home &mdash usually prefabricated &mdash and lease the land it stands on. In exchange for a weekly fee of between A$230 and A$250, they have access to facilities such as gyms, pools, bowling alleys, cinemas and country clubs.

 

While the land-lease and manufactured home industry is long-established in the US &mdash having significantly contributed to the fortunes of billionaires like the late Sam Zell &mdash it remains less mature in Australia. But demand is growing, driven by an ageing population and an overheated property market that has intensified the need for affordable retirement housing.

 

Australia&rsquo s land-lease sector is forecast to see annual revenue growth of 5% to 7% over the next five years, as existing communities expand and new sites are developed, Colliers International Group Inc. said in a November report.

 

Adrian Puljich said GemLife sells houses ranging from A$600,000, below the average house price in Australia, to A$2 million.

 

&ldquo Encouraging older Australians to downsize also contributes positively to the broader property market, opening much-needed family-sized housing for younger buyers,&rdquo Adrian Puljich said last year.

 

Gold Coast

After the completion of the initial public offering (IPO), GemLife will have a portfolio of 32 communities, projects and sites in its pipeline, with a total number of homes just short of 10,000, according to the IPO prospectus. They are located across Queensland, New South Wales and Victoria.

 

The company will use part of the IPO proceeds to fund the A$270 million acquisition of eight projects under the Aliria portfolio, another firm that was founded separately by Adrian Puljich and is entirely owned by him.

 

GemLife structured the offering as a stapled security &mdash an instrument often used in Australia, where it combines at least two securities that are traded as one. After the listing, Adrian Puljich will hold about 17.6% of GemLife securities, followed by Thakral Capital with 16.7% and Peter Puljich with 8.8%, according to the prospectus.

 

&ldquo In the Australian stock market, we don&rsquo t have much exposure to residential construction or residential building material space anymore,&rdquo said Jun Bei Liu, founder and lead portfolio manager at Ten Cap, which was a cornerstone investor in the IPO. &ldquo So this lifestyle space, retirement living, is a derivative of the housing market.&rdquo

 

Growing sector

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 A$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 A$620 million.

 

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.

 

Two peers to GemLife are already listed in the Australian market &mdash South Melbourne-based Lifestyle Communities, with a market capitalisation of about A$860 million, and Ingenia Communities Group, headquartered in Sydney and valued at about A$2.2 billion.

 

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

 

 

The successful listing of GemLife Communities Group on the Australian Securities Exchange (ASX) in July will result in Thakral Corporation&rsquo s FY2024 pro forma earnings per share (EPS) increasing five fold, according to a release dated June 17.

 

GemLife, a lifestyle resorts business owner which Thakral owns a 31.7% effective interest in, raised A$750 million ($627.86 million) in its IPO, the country' s biggest listing this year. The post money valuation of the IPO is A$1.58 billion, fully underwritten by J.P. Morgan and Morgan Stanley.

 

Thakral says that it intends to subscribe to additional stapled securities via the IPO, leading to a cumulative 16.8% stake post-listing. These will be at a price of A$4.16 per stapled securities, for an additional 600,962 securities.

 

After the IPO, Thakral&rsquo s pro forma net asset value (NAV) is expected to rise 67% to $2.15 and its FY2024 pro forma EPS will increase to $1.08.

 

The GemLife listing will result in key financial reporting changes for Thakral, where it will cease to be an associate and instead be accounted for as an investment at fair value through profit or loss in Thakral&rsquo s financial statements.

 

On a pro forma basis, total assets are expected to increase by 42% to $512.1 million, primarily reflecting the pro forma increase in net assets arising from the recognition of the fair value gain upon reclassification of the investment in GemLife to fair value through profit or loss.

 

With the repayment of receivables from GemLife, pro forma net borrowings (i.e., total borrowings net of cash) are expected to decline approximately 56% to $22.3 million.

 

This will result in a pro forma gearing ratio of 0.23 after GemLife successfully lists, compared to 0.39 as of Dec 31, 2024.

 

The IPO of Australian over-50s lifestyle resorts operator GemLife Communities is set to be Australia&rsquo s largest this year.

 

It is fully underwritten by JPMorgan and Morgan Stanley in Australia, noted Thakral, which holds a 31.7 per cent effective interest in GemLife.

 

The stapled securities are expected to be listed and quoted on the Australian Securities Exchange upon closing of the IPO on Jul 3.

 

Thakral intends to subscribe an additional 600,962 GemLife stapled securities at the IPO price of A$4.16 per stapled security, translating to a total of 64,000,962 GemLife stapled securities.

 

Thakral&rsquo s effective interest in GemLife will be about 16.8 per cent post-dilution, the company said.

 

The company noted that the listing will result in key financial reporting changes, where GemLife will cease to be an associate and instead be accounted for as an investment at fair value through profit or loss in Thakral&rsquo s financial statements.

 

This means Thakral will no longer record its share of GemLife&rsquo s profits as previously done under the equity accounting method.

 

Instead, future financial results will reflect periodic fair value adjustments based on GemLife&rsquo s securities price, together with any dividends declared, Thakral said.

 

On a pro forma basis, Upon successful listing, Thakral&rsquo s net asset value (NAV) attributable to shareholders is expected to increase by 67 per cent from S$1.28 per share to about S$2.15 per share.

 

Pro forma financial effects are &ldquo strictly for illustrative purposes only&rdquo , Thakral noted.

 

As part of the reclassification to fair value through profit or loss, Thakral will recognise a one-off gain in its income statement for the 2025 financial year, resulting in a substantial increase in profit and earnings per share (EPS). 

 

&ldquo On a pro forma basis, had the GemLife listing and reclassification occurred on Jan 1, 2024, EPS would have increased by approximately 381 per cent from S$0.225 to S$1.08 for the financial year ended Dec 31, 2024,&rdquo the company said.

 

The process is also expected to strengthen Thakral&rsquo s balance sheet and reduce its gearing, while unlocking opportunities for the company to explore further investments to drive future growth, it said.

 

Its pro forma total assets are expected to increase by about 42 per cent to S$512.1 million, primarily reflecting the pro forma increase in net assets arising from the recognition of the fair value gain upon the reclassification, Thakral noted.

 

With the repayment of receivables from GemLife, pro forma net borrowings are expected to decline about 56 per cent to S$22.3 million.

 

This means Thakral will also achieve a &ldquo healthy total cash and bank balance&rdquo on a pro forma basis of about S$38.4 million.

 

This will result in a pro forma gearing ratio of 0.23 after GemLife successfully lists, compared to 0.39 as at Dec 31, 2024.

 

&ldquo We are confident that the listing will unlock significant shareholder value and set the stage for an exciting new chapter of growth for both GemLife and Thakral,&rdquo said Inderbethal Singh Thakral, chief executive and executive director of Thakral.

 

In April, GemLife said it was considering its strategic options, which could include the consideration of a possible IPO. It said then that it was planning to conduct a series of introductory meetings with investors, and that the review of these options would be managed independently without the involvement or participation of Thakral Corp.

 

On Jun 6, Thakral said GemLife was in &ldquo advanced discussions with potential underwriters for the proposed IPO&rdquo , although it noted that there was no assurance or certainty that the proposed IPO would proceed and close successfully.

 

GemLife is said to be the country&rsquo s largest privately owned land lease developer, owner and operator, with nearly 10,000 homes in more than 30 communities.