Residential land lease community sells as budget conscious holiday makers continue to drive big rises in Caravan Park revenue
26 April 2024
A long-standing holiday park and land lease community in Victoria’s Healesville has transacted in the tightly held caravans parks sector. Enclave at Healesville which comprised of 71 dwellings across a mixture of short stay and permanent accommodation has sold for $5,200,000 to an international investor.
The land lease community (LLC) was sold by CBRE’s Australian Healthcare and Social Infrastructure and Hotels teams comprising Marcello Caspani-Muto, Jimmy Tat, Sandro Peluso and Scott Callow. The sale marks a rarity for freestanding sales opportunities of this nature across the private investment market with opportunities across Victoria few and far between. With the last public sale on record purchased by private capital also sold by the same team. This was the Sunny Sands Residential Village in Inverloch which was sold during the midst of the COVID pandemic.
Enclave at Healesville features 44 permanent cabins and 27 short stay or ”tourism” cabins and is positioned circa 40 minutes from the Melbourne CBD. The asset was first marketed early this year alongside the Frenchview lifestyle village which is currently attracting interest from other private capital sources.
Marcello Caspani-Muto said “ The team continue to see both tourism and retirement land lease opportunities tightly held with offerings at price points sub $15,000,000 few and far between. Private investors are lucky to secure 2-3 assets of this type per year across the country at best. When these opportunities do arise they are highly contested given their considerably higher yield potential vs traditional commercial real estate assets, particularly for those which are well managed or include expansion upside”
There has been increased levels of recent press surrounding the positives of investment in the tourism and land lease community markets and with only expect further yield compression as this industry awareness grows.”
Jimmy Tat added “Owner are consistently surprised by the level of private capital with the capacity to acquire either individual or portfolio assets across the asset class. This is not just limited to caravan parks and lifestyle communities. The team are seeing private capital for healthcare and early learning assets comfortable exceeding $20,000,000 and in multiple recent cases having the capacity to purchase up to $50,000,000.
In this instance, the purchaser was an internationally investor who is locally based and wanting to grow their footprint in the caravan park space. They also hold numerous passive investments separate to their business holdings.”
What Are Residential Land Lease Communities?
Residential Land Lease Communities, also known as Manufactured Home Estates (MHEs) are a rapidly evolving asset class and have now well-established themselves as a legitimate segment of the Seniors Living housing market.
Offerings to residents within modern MHE’s are more closely aligned to quality retirement villages with independent living villas and are a natural progression from a long-term tourist park or mixed-use holiday park.
Due to the “residential” nature of MHE’s, this asset has demonstrated extreme resilience during turbulent economic periods since 2020.
Investment Drivers for Investors
• Stable and recurring passive income with built-in annual increases
• Income underpinned by the government via rental assistance for eligible residents
• Growing demand for affordable housing by Australia’s ageing population
• Largest and wealthiest age bracket, the “baby boomers” are entering retirement
• Significant shortage of supply for affordable housing, especially in senior’s accommodation
• Simplified management structure and financial operation than the Deferred Management Fee (DMF) retirement village model
• Capital light” development model with potential for profits via the sale of new homes
• Substantial landholdings underpinning long-term value growth
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