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AustralianSuper, one of the major investors controlling 12 per cent of Lifestyle, has committed to receiving its full rights under the offer.
Major developers are seeing significant interest in land lease models that serve the country’s need for affordable housing options, as noted by Lifestyle. Supporting this theory is the fact that a significant number of older Australians do not have enough superannuation to fund their retirement.
The results for half a year were disappointing.
Proponents of the model say selling the family home and downsizing the lease can free up capital to finance residents’ retirements.
ASX-listed developer Stockland is making a strong entry into the sector, with plans to expand to 12,000 residential sites within leasehold land. Mirvac also made a major entry into the sector last year as part of a $1 billion joint deal to acquire a stake in Western Australia’s largest telecommunications operator.
In another sign of growing interest in the sector, ambitious fund manager HMC Capital has acquired a significant stake in lifestyle peer Ingenia.
Lifestyle announced the increase after reporting disappointing net profit after tax of $20.8 million for the first half of 2024, compared to $25.2 million in the first half.
The number of new home openings for the half was 124, compared to 141 previously, which was significantly lower than consensus expectations. Lifestyle said its bottom line results were also affected by higher marketing expenses and new projects that have not yet begun closing.
Jarden’s Lou Pirenc called the results “weak” in a client note.
“While the $275 million vesting offer is presented as an opportunity to benefit from market conditions, this comes after management has repeatedly stated that LIC does not intend to raise capital to grow its business,” he said. It was carried out after the
“Having said that, given the pressure on cash flow and balance sheets, that should help remove significant resistance to the growth story.”
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