Summerset shares start trading up 3.6pc

One of Summerset's retirement villages in Auckland. Photo / Supplied

Shares in Summerset Group, a retirement village operator and developer, debuted on the NZX today at $1.45 a share - a 5c (3.6 per cent) premium to their $1.40 a share issue price.

The initial public offer (IPO) undertaken by Summerset's majority owner, Quadrant Private Equity, raised $123.6 million - the largest IPO in New Zealand for more than two years.

Funds controlled by Quadrant will continue to hold an about 56 per cent stake in the company, which has a market capitalisation of around $300 million.

Pricing of the company's share issue, which was at the bottom end of an indicative $1.40 to $1.60 range, was set through an auction-style book-build.

Summerset opened its first village in Wanganui in 1997 and has since grown to become the third largest retirement village operator in New Zealand and the second largest developer. It currently has 13 villages in operation.

Investment banking sources said Summerset, which runs along similar lines to NZX-listed market leader, Ryman Healthcare, is being seen as an important test of investor confidence ahead of two other issues expected over the next few months.

Another retirement village company, Vision Senior Living, is expected to float this year or early next year and media group Fairfax expects to float 30 to 35 per cent of online trading platform Trade Me before the year's end.

All three floats have been designed to hit the market before the Government sets in motion the partial privatisation of state-owned assets in the second quarter of 2012, assuming it is returned to power at the November 26 general election.