Thakral Corp has confirmed that its retirement resort joint venture in Australia, GemLife, is in “advanced discussions” to be merged with a separate venture held by its local partner, the Puljich family.
In addition, GemLife is seeking “interest from potential investors” to take up “strategic stakes” of more than a billion dollars in the combined entity, which, according to the Australian Financial Review, can “fetch a multi‐billion-dollar valuation”.
“I can confirm that both Living Gems and GemLife are jointly conducting a strategic review of both businesses for the purposes of merging together and bringing on board a sizeable strategic investor who is willing to share in the growth story of what will be Australia’s largest pure play land lease operator, under the GemLife moniker,” Living Gems CEO Adrian Puljich was quoted as saying in Australian website The Weekly Source.
In a May 3 clarification announcement posted on SGX, Thakral “would like to note that the value of such stakes” has yet to be finalised.
The potential sale of the “$1b‐plus stake” in the AFR report is, “in the board’s view, strictly indicative,” adds Thakral.
The joint venture, GemLife, is equally held between Thakral and the Puljich family. Set up in 2016, it focuses on the development and management of so-called over‐50s lifestyle resorts in Australia.
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The Puljich family’s own resort venture is called Living Gems. It was set up in 1982. Upon completion of the merger, Living Gems will be subsumed under the GemLife branding.
The combined GemLife entity will be pitched as a portfolio of more than 11,000 land lease homes across 43 locations in Australia. Highbury Partnership has been hired to help bring in potential investors.
By way of comparison, Lifestyle Communities, a listed Australian entity in the similar space, has 24 communities in various stages of management or development and is set to buy at least two new sites every year.
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Its properties have been leased to more than 4,000 homeowners. As at May 3, Lifestyle Communities has a market value of A$1.55 billion.
In its clarification on May 3, Thakral notes that the potential merger between GemLife and Living Gems was already flagged on April 22. For now, the merger remains in “advanced discussions”.
In addition, Thakral is still “evaluating the various options that it has in maximising the return on its investment in GemLife” and “no firm decision has been made on how it would deal with its interest” in Thakral Capital, its subsidiary used to hold the GemLife investment.
For FY2021 ended Dec 2021, Thakral booked $17.3 million for its share of earnings from GemLife, up from $6.4 million in FY2020.
Besides its investment in GemLife, Thakral Corp owns a portfolio of hotels and offices in Japan, as well as a distribution business in China and Hong Kong.
Thakral shares last traded at 61 cents, up 17.31% year to date.
