This article is from the Australian Property Journal archive
DIVERSIFIED developer Stockland is both moving further into the land lease sector and expanding its capital partnerships, striking a $1.1 billion deal with US group Invesco Real Estate to develop and hold a portfolio of land lease communities in Queensland and NSW.
Stockland will hold a 50.1% interest in what will be known as the Stockland Land Lease Partnership (SLLP1), and Invesco the balance.
The open-ended partnership will have an initial portfolio of 1,190 homes across three land lease communities taken from Stockland’s existing pipeline, including at The Gables in Sydney’s Hills district, where civil construction kicked off last month, its second community at Aura on the Sunshine Coast, Halcyon Coves, which launched yesterday, and Redland Bay. There is also an opportunity for SLLP1 to acquire a land lease community at Providence.
“In line with Stockland’s group strategy, the partnership expands its capital partnership platform and leverages the availability of long-term institutional capital and investment appetite for the Australian residential sector,” Stockland said in a statement.
Stockland chief investment officer, Justin Louis, said, “Our land lease business offers high-quality, commercially attractive investment prospects for third-party investor partners, such as Invesco. The SLLP1 partnership will enable us to continue to scale our development pipeline and grow our LLC operating platform to enhance long-term sustainable business growth.”
“Stockland’s LLC strategy is supported by Australia’s ageing population and growing preference of retirees for community living benefits such as increased social connectivity and resort-like amenities,” it said.
Stockland is positioning to launch up to 12 new communities during FY24. Halcyon Coves is the sixth land lease community on the Sunshine Coast following communities at Caloundra, Bli Bli, Aura, and Buderim.
Stockland spent $620 million acquiring land lease communities operator Halcyon Group in 2021, which gave it 3,800 sites across 13 communities. It established the Stockland Residential Rental Partnership with Mitsubishi Estate Asia in February of 2022.
Last year, Stockland made the $210 million acquisition of five projects in Queensland from Living Gems Group.
The business is targeting circa 400 to 450 settlements in its land lease communities in FY24, with development operating profit margin slightly below the long-term target range due to launch costs associated with production ramp-up.
Ian Schilling, head of Asia Pacific core funds for Invesco, said, “Land lease communities are a high-conviction investment theme for us given the housing shortage and ageing population in Australia.
“This partnership is a key component in us continuing to grow our diversified portfolio of high-quality assets that are underpinned by robust market fundamentals and strong income and capital growth.”
