An amount of $380 million was raised with existing investors retaining 16.4% of the company. The company forecasts a yield of 6.3% and valued the business at 12 times the forecast 2016 profit of $45 million.
Gateway is made up of three investment funds plus the 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 – a company 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, north west 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 from 65 to 75 and average occupancy is 15 years. MHEs so far only account for 0.6% of the Australian population
There are 2,000 parks across Australia available to be converted to manufactured home estates (MHEs), offering affordable housing to retirees. MHEs account for 0.6% of the population compared to the US with 6%.
In the company's prospectus, Gateway declared its average value of a manufactured home is $250,000 and the company aims 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. The company stated it has delivered an average 5.2% increase in rental income each year since 2009 and budgets on $7,000 per home rental income a year or $135 per week.
So far Gateway has 14 parks in development and a monthly marketing budget of $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.
