Villa sees strong investor demand

Residential developer surpasses institutional placement target by $10m.

Gold Coast-based residential developer Villa World (GPM) has raised $27.6 million through an institutional placement – $10m more than expected – after strong demand from investors.

Villa World, which was born out of failed financier MFS and was formerly known as GEO Property Group, went into a trading halt yesterday morning ahead of the placement being launched.

The company is expected to make an announcement today regarding the offer, which also included a share-purchase plan.

It was originally expected to tap the market for $17.6m through the placement managed by Moelis Australia. Moelis is also the sole underwriter on the deal.

But strong demand due to increased confidence in the residential property market and Villa World's solid results for the 2013 financial year saw the placement increased. 

Villa World has undergone a significant turnaround in the past 12 months with its shares rising from 76 cents at the end of the 2012 calendar year to the $1.60 offer price. It now trades at a slight discount to net tangible assets.

The raising will allow Villa World to fund its acquisition of the 193-lot Capalaba project on the outskirts of Brisbane as well as build a warchest to buy more development sites.

Shares were on offer at $1.60 each, which represents a 3.9% discount to Villa World's last close and a 5.1% discount to its five-day volume weighted average price.

At its August results, the company flagged acquisitions in south-east Queensland, northern Queensland, Sydney and Melbourne as part of its expansion plans. The company's growth spurt also follow rumours that it is ripe for a takeover, though a likley suitor Cedar Woods has already ruled out a tilt for its rival