Boom Times: Consolidation in Land Lease Industry Peaks as Operators Cash in on Demand

Operators and advisers say now is a good time to sell as big players look to consolidate their position and meet growing demand for the model.

The sector has seen a series of mergers and acquisitions over the past 12 months as operators seek to cash in and out or grow their footprints, including Stockland’s $620 million acquisition of the Halcyon Group, the $270 million acquisition by Ingenia of Seachange Lifestyle Resorts and the impending Queensland merger. land lease operators GemLife and Living Gems.

Land lease operators say the level of activity reflects the industry’s maturation into a true asset class and trusted consumer product.

“Institutional investing has certainly found its place in this sector and has evolved from a niche sector to a true investment asset class”, said Serenitas business development manager John Wood (pictured above), who founded National Lifestyle Villages in 1999 before selling his eight communities and two under development to GIC and Tasman Capital-backed Serenitas in 2018.

Serenitas now has 22 communities across Australia, including under the NLV and Thyme Lifestyle Resort brands.

“A lot of major players want to grow their brand and provide a consistent and scalable model. Every time they create a new community, they continue to add value to their portfolio, and that comes from having different management styles consistent, consistent processes, even consistent products so people trust you and know what to expect.

GemLife Director and CEO Adrian Puljich (pictured right) says there is no doubt that the land lease sector is the “industrial flavor of the month”.

“In terms of selling an asset, I think there has never been a better time for an operator to be able to sell any type of quality ground lease community, be it your Class A or your caravan parks”, he said.

Good growth in the sector will see some existing owners keep their businesses in the short term, according to Duncan Wilmer (pictured right), managing director of Rothschild & Co. Australia, which runs its property advisory business in Australia and led the Halcyon transaction in Stockland.

However, in the longer term, the DM expects to see more opportunities emerge.

“There are other operators who have capital behind them and who can stick to developing new sites as a growth engine before considering mergers and acquisitions, but inevitably in the medium term there will be opportunities .”

Read the full story in the latest issue of SATURDAY here. SATURDAY is moving to a subscription model from Saturday April 2 – subscribe here to get access.

Comments are closed.