This article is from the Australian Property Journal archive
THE growing number of downsizing boomers and a housing crunch continue to drive investment into Australia’s burgeoning land lease community (LLC) sector, with a 28-hectare site in Heritage Park selling to a LLC developer for $30 million.
The sale drops just a day after Stockland and Thai investment partner Supalai were given the final tick of approval for their $1.06 billion acquisition of 12 master-planned LLCs in NSW, Queensland and Western Australia from Lendlease.
Amid a critical housing supply shortage that has seen affordability stretched to its limits, ongoing increases in rents and historically low vacancies, against a backdrop of significant immigration and population growth, land lease communities have become a key affordable part of the housing supply solution.
LLCs typically entail a homeowner owning their home, but leasing the plot on which it stands. Demand is being driven by Australia’s ageing population and baby boomers reaching retirement age and wanting to downsize, said Colliers Queensland residential development sites director Brendan Hogan.
The Heritage Park deal saw the Colliers Queensland residential development sites division team up with the healthcare and retirement living division to manage the $29,965,380 sale of the 27.99ha development site on behalf of Pointcorp. Agents Chris O’Driscoll and Adam Rubie were also involved.
“Land lease estates have become a key player in addressing the housing shortage, and we are seeing a huge amount of enquiry from this sector for development sites,” Hogan said.
“South-east Queensland will require around 900,000 new homes for residents, with the delivery of new land supply lagging behind population growth.
“This has resulted in a surge in demand for development opportunities, but with this demand not meeting the supply, alternatives like these land lease sites are receiving a significant amount of buyer interest and getting snapped up very quickly.”
O’Driscoll said there were a number of operators chasing existing assets and development sites across the eastern states for land lease communities.
Over the next 25 years the number of older people aged 65 years or older will increase, and rhe number of one person households will increase substantially from 23.4% in 2021 to 40.5%
“These changes mean we need more residential options in the mix, to deliver diversified housing solutions, land lease communities are a great opportunity to fill the housing supply shortage gap,” O’Driscoll said.
“Land lease communities deliver attractive returns as a significant number of younger retirees leave their homes and move into these communities as the demand for high quality, affordable housing solutions grow,” Chris O’Driscoll added.
Prominent over-50s developer Adrian Puljich has launched a new land lease venture that is targeting a $500 million pipeline of communities to roll out in Queensland by late next year, hot on the heels of Lowy family-backed Assembly Funds Management announcing its move into the sector, kicking off with two sites in Victoria and aiming to have more than 10 communities worth over half a billion dollars.
Stockland, independent of the freshly approved deal with Lendlease, has been reshaping its portfolio towards greater weighting in part to land lease communities, and rival Mirvac has also made a play into the sector. In June, Gaw Capital Partners and GreenFort Capital formed a joint venture to acquire and develop an $800 million pipeline of land lease projects.
