Established in 2009 and now with 36 manufacture home estates down the east coast of Australia, Gateway lifestyle group has successfully listed on the Australian stock exchange with a value of $500 million.
$380 million was raised with existing investors retaining 16.4% of the company. They forecast a yield of 6.3% and valued business at 12 times their forecast 2016 profit of $45 million.
Gateway is made up of three investment funds plus a recently acquired Tasman group of estates. The first investment fund was established by Trent Ottawa and backed by Phil Green and Trevor Loewensohn (pictured), who were the drivers behind the creation of Babcock & Brown Communities which became the backbone of Lend Lease Retirement.
Gateway now has 5,861 approved sites with approximately 6,000 residents in 4,046 manufactured homes.
Yesterday they acquired an additional manufactured home estate, Cobb Haven at Moama (near Echuca, NW of Shepparton) for $12.3 million, delivering 198 occupied sites plus land for 45 additional new homes.
Gateway state their target market is people aged 65 to 75 and average occupancy is 15 years. There are 2,000 parks across Australia available to be converted to manufacture home estates, offering affordable housing to retirees. MHEs account for 0.6% of the population compared to the US with 6%.
In their prospectus Gateway declared their average value of a manufactured home is $250,000 and they aim to be priced at 40 to 60% of the median house price in the local market. Rental income accounts for just under 50% of total revenue; they have delivered an average 5.2% increase in rental income each year since 2009. They budget on $7000 per home rental income a year or $135 per week.
With 14 parks in development their monthly marketing budget is $45,000, delivering 150 to 200 leads and 10 new home sales per month.
Gateway joins two other MHE operators on the stock exchange, Lifestyle Communities and Ingenia.
An excellent explanation of the economics of manufactured home estates can be seen in the video presentation made by Simon Owen of Ingenia at our LEADERS SUMMIT in March, HERE.
