The $500 million holiday and retirement park operator Ingenia Communities is poised to swoop on the last A-grade freehold caravan park in Sydney with a fresh injection of $60 million.
Ingenia offered 21.4 million new shares at $2.80, a 6.4 per cent discount to Friday's closing price of $2.99. The new securities, issued via an institutional placement, will be entitled to Ingenia's final distribution of 4.9¢, which is payable in September.
Ingenia chief executive Simon Owen said the placement, underwritten by Moelis Australia, Morgans Corporate and Petra Capital, closed 250 per cent oversubscribed despite the stock exchange wipeout over Brexit fears.
"I'm glad we went to the market yesterday," Mr Owen said.
Ingenia is planning to buy four new parks with the money raised – three of them in NSW and one in Queensland. Three of the parks are under conditional contract with negotiations for a fourth well advanced.
The deal adds 760 paying sites and 215 development sites to Ingenia's 4475-site portfolio and brings the number of parks to 30. Ingenia's portfolio boasts a mix of established affordable housing for seniors and holiday parks for permanent and short-stay caravans.
Conditional contracts have been exchanged to pay $16.5 million for the Sydney park, which is on 5.1 hectares of land, and a further $16.5 million for an adjoining parcel of 10.4 hectares on which it can build up to 190 new homes. The deal, which reflects an 8 per cent yield, includes an option to buy a further 4 hectares for $6.6 million in three years.
The unnamed park is located in the north-west Sydney region where Ingenia already has four parks – Nepean, Sydney Hills, Rouse Hill and Stoney Creek. The park has 37 permanent and 143 short-term sites.
"Our project at Marsden Park is close to sold out so this gives us a four or five year pipeline in the Sydney market and given Stockland just paid $3 million a hectare for land nearby we think it was well bought," Mr Owen said.
"It's unlikely there will be another caravan park in western Sydney given the high and best use of the land," he said.
The other parks include the 8.4 hectare Ocean Lake Caravan Park on the NSW south coast near Bermagui, which is to be purchased for $9.2 million on a 10 per cent yield; another 200-site park on the NSW coast near Foster for $7.5 million and a Hervey Bay park on the Fraser Coast which is to be purchased for $9.5 million on a 9 per cent yield.
Ingenia posted a $10.8 million half-year profit in February, turning around a near $1 million loss in the 2104-15 first half year.
