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Australia’s ageing population continues to grow due to increasing life expectancy. As the majority of companies operating in the retirement space focus on the higher end of the market, Lifestyle Communities offers a luxury product for those who sit in the lower end. Headed by founder and CEO James Kelly, who also owns 14% of the company, the management team are known for consistent and conservative growth strategies. It’s these strategies that have led to 20% growth per annum, without raising new capital but instead recycling capital to fund further growth.
Located in Victoria’s semi-regional areas, Lifestyle Communities is able to keep costs low whilst, due to easy access to additional land, explore further development opportunities as demand increases. Currently they’ve built 1,600 homes across thirteen communities throughout Victoria with 2,600 recorded homeowners. The homes themselves are sold, on average, for 60% of the median house price, enabling residents to pocket 40% of the proceeds on sale.
We believe Lifestyle Communities is a sound long-term investment and have chosen to invest in this stock for three main reasons:
- The high quality and growing popularity of this product can be seen in their lead generation, with 52% of new residents coming from referrals.
- They are the largest provider of this type of community in Victoria with no direct competition. They also target the 50+ demographic whereas most alternative companies are only available to the 60 – 65+ audiences.
- Their semi-regional location, in addition to their expertise in lower cost construction and management systems, provides them with the ability to easily expand to meet demand for a product that offers both affordability and luxury.
This stock is currently held by our Emerging Companies Fund.
This report has been prepared by Pengana Capital Ltd (ABN 30 103 800 568, Australian Financial Services Licence No. 226566) (“Pengana”). This report does not contain any investment recommendation or investment advice and has been prepared without taking account of any person’s objectives, financial situation or needs. Therefore, before acting on the information in this report a person should consider the appropriateness of the information, having regard to their objectives, financial situation and needs.Pengana is the issuer of units in the Pengana Emerging Companies Fund (ARSN 111 894 540) (“the Fund”). A Product Disclosure Statement for the Fund (“PDS”) is available and can be obtained by contacting Pengana on (02) 8524 9900. A person who is considering investing in the Fund should obtain the relevant PDS and should consider the PDS carefully and consult with their financial adviser to determine whether the Fund is appropriate for them before deciding whether to invest in, or to continue to hold, units in the Fund.The value of investments can go up and down. Past performance is not a reliable indicator of past performance.While care has been taken in the preparation of this report, Pengana makes no representation or warranty as to the accuracy, currency or completeness of any statement, data or value. To the maximum extent permitted by law, Pengana expressly disclaims any liability which may arise out of the provision to, or use by, any person of this report.