Australian residential property bull or bear – you’re about to have another method at your disposal to speculate on future developments in the market.
McGrath Limited, the well-known real estate firm, is seeking to raise as much as $135.2 million in Australia’s first initial public offering by a real estate agency.
According to a report from Bloomberg, existing investors, including millionaire founder John McGrath, plan to sell 31 million of their shares as part of the IPO, while 29.4 million to 36.8 million new shares will also be issued, according to a term sheet detailing the proposed listing.
The stock will be offered to investors in a range of $1.80 to $2.25 apiece, valuing the real estate agency at as much as $295.7 million.
Shares in the company are expected to commence trading on the Australian Stock Exchange on December 9, with Bell Potter Securities Ltd and JPMorgan Chase managing the share sale.
The McGrath Group sold $12.3 billion in residential property in the financial year ending June 30, 2015, according to the company’s website
In March 2015, at the height of the property boom in Australia’s two largest cities, Sydney and Melbourne, the company states that it sold $1.46 billion worth of property, a record for the company.
According to data from CoreLogic RP Data, the median Sydney property price has risen 50% from May 2012.
While that was then, the fortunes of both markets have dimmed somewhat in recent months, with sentiment falling in line with auction clearance rates.
“It’s a bit of a tentative time for a property IPO,” Angus Nicholson, a market analyst at IG Markets Ltd told Bloomberg by phone.
“The housing and real estate markets are in for a bit of a tough time. A lot of the steam has really dropped out of Sydney and Melbourne and we would expect the volume of transactions to go down as well.”
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