Investors eager for $500m Japara IPO

Nursing home giant Japara Holdings is expected to lodge its prospectus by early next week for a $500 million-plus float on the Australian Securities Exchange, in what is so far shaping up to be one of the success stories when it comes to initial public ­offerings.

It would join the float of 360 Capital Group’s office fund which this month successfully completed a $155m raising through investment banks Moelis and CIMB. The soon-to-be-listed trust will own suburban office buildings, demonstrating strong investor demand for the asset class.

However, not all have had the same warm reception from investors.

“The only ones that are getting through are ones with quality,” said one analyst who did not want to be named.

“Whether to support the ­initial public offering, they ­(investors) are taking a really keen interest on what they think the after-market performance is going to be like, and if there is any doubt if it is going to come on at a discount, it won’t be supported.’’

Market analysts yesterday said the listing of Japara, revealed by The Australian in ­November, was “something a bit different” and was more of an aged-care play than a real estate investment.

The company, which has at least 35 Australian aged-care facilities, mostly in Victoria, was expected to list at the upper end of analysts’ market capitalisation range of between $490m and $528m.

The fully underwritten deal was being led by investment bank Macquarie Group, with support from Morgans and CommSec.

It is understood that the banks had received funding commitments well in excess of the size of the offering, tipped to list this month.

Investors were attracted to Japara, backed by prominent real estate investor Julius Coleman, given it would become the country’s only listed aged-care provider, offering exposure to the ageing population, sources said.

In the case of 360 Capital’s office fund, Maxim Asset Management managing director Winston Sammut said the manager had a good track record and had recently revalued the properties for its float, with the properties posting a rise in worth.

“The yield was not bad,” Mr Sammut said.

Should Charter Hall choose to float its Core Plus Industrial Fund later this year, that would also be likely to be well received by investors, with strong demand for industrial properties.

However, when it came to floats that had not been so successful, Mr Sammut said it was due to the wrong pricing or a lacklustre product.

Last week, the $449m-plus plans for an April sharemarket listing of the country’s second-largest hotel operator, Mantra, were scrapped on concerns the company would trade lower once listed.