This article is from the Australian Property Journal archive
A PORTFOLIO of over 50s lifestyle villages in Queensland’s Sunshine Coast and Hervey Bay have hit the market, with 148 homes across Cooroy Village and Sugar Coast Village.
Cooroy Village, located around 15 minutes from Noosa Heads, comprises 68 homes plus a swimming pool, community centre, BBQ area and walking trails, with the land lease community generating around $800k in gross rental income.
Sugar Coast Village, located in the coastal suburb of Urangan in Hervey Bay, comprises 80 homes, a swimming pool, community building, spa and sauna, BBQ area, on-site convenience store, vehicle storage area and manager’s residence.
Currently Sugar Coast Village generates circa $40k per fortnight, which is further bolstered by the convenience store’s rental income.
Andrew Jackson and Paul Nyholt from HTL Property have been exclusively appointed to sell the Residential Land Lease Communities (RLLC) portfolio via an expressions of interest campaign.
The assets being sold in-one-line or individually and are currently held by operator Lifestyle Villages.
“We are very excited about these two RLLC assets – they present a rare opportunity to acquire a highly passive and highly secure, effectively recession-proof income stream underpinned by large landholdings in prime locations,” said Andrew Jackson, national director at HTL Property.
“We anticipate strong interest for these assets as astute investors recognise the ever- resilient fundamentals of the RLLC sector; now accelerated by unprecedented demand for affordable housing by the retiree population.”
The income of the assets is very secure due to the way RLLC derive income from site fees residents pay to occupy a spot within the community, with residential site agreements enforce weekly or fortnight payments and annual increases.
“The sector is increasingly attracting a broader range of investors, which in turn is driving demand for these types of assets and is consequently compressing yields,” said Paul Nyholt, Queensland director at HTL Property.
“Our recent campaigns for land lease community assets have been well received by A-REITs and corporates; through to private funds, high net worth individuals and new entrants all competing for a foothold in the sector.”
The Sunshine Coast and Hervey Bay are both major lifestyle destinations and have a population of 50% over 50 years old.
“Another factor driving the demand for this asset class is the growing realisation that supply is limited. Currently, operating assets are very tightly held; while the pipeline for future communities is highly constrained as planning regulations are restrictive and development costs have escalated prohibitively,” added Jackson.
“We are seeing strong continued demand for residential land lease community assets, combined with an undersupply of established assets in the sector, resulting in steady yield compression over the last decade.”
The sector is experiencing heightened activity with cashed up Gaw Capital Partners and GreenFort Capital forming a joint venture to develop $800 million in land lease community (LLC) assets.
In May US giant Invesco teamed up with Stockland in a $1.1 billion deal to expand in QLD and NSW. Meanwhile Avid Property Group announced its expansion into the sector with a $1.1 billion new business, Vantage.
It comes after Mirvac teamed up with Pacific Equity Partners in a billion-dollar deal.
Last month Macquarie Group raised $2.85 billion from global investors to target LLC sector in Australia.
The expressions of interest campaign for the Over 50’s Lifestyle Villages is scheduled to close on 5 September 2024.
