The Gold Coast-based, over-50s lifestyle resorts operator, which listed on the ASX in July, has told everyone interested how it makes money developing homes in its land-lease home communities.

In GemLife's 1H FY25 results presentation, it stated it continues to improve operating margins as the number of occupied homes increases. The rental income is stable, with contracted annual increases in site agreements, but it is in the building of homes that Managing Director and CEO Adrian Puljich and his team excels.

The average gross profit per GemLife home is $355,000, a 50% margin. With a total of 704 homes at GemLife Gold Coast on completion, Stage 3 homes were priced from $880,000, which means GemLife is making an average profit of about $315,000.  With a retirement village development's average profit said to be about 16%, if the homes are selling for $1 million, they are only getting $160,000.     

Buyers typically make progress payments during construction of their home, and GemLife also builds move-in ready homes to ensure an optimal supply of available homes for sale.

Adrian is very proud of his vertically integrated operating platform:

• community planning, with Adrian leading negotiations to buy suitable sites;
• construction and development by GemLife's vertically integrated development team capable of concurrently undertaking construction across residential, civil works, commercial, landscaping and joinery construction;
• sales and marketing, and operations and maintenance are in-house; and
• senior management lead community open forums strengthening working relationships with homeowners.

“Our first-half performance demonstrates the strength of GemLife’s communities and the depth of demand for high-quality, purpose-built housing for Australia’s downsizer market. We are seeing continued momentum in sales and settlements, and with new projects coming online in the second half, we are well placed to deliver on our full-year commitments and create lasting value for our residents and securityholders,” said Adrian.

“As we enter the second half of FY25, GemLife reaffirms its prospectus forecast of pro forma underlying NPAT of $86.2 million for the full year. GemLife is targeting 333 home settlements in FY25, underpinned by the activation of the final stages at a number of communities, and the commencement of settlements at GemLife Highfields Heights (Toowoomba) and GemLife on Dean (Rockhampton).”