The huge growth trajectory for Australia’s land lease community industry has been confirmed by Ingenia’s announcement that it will spend around $552m snapping up 20 existing and planned communities.
As part of this initiative, Ingenia has announced that it has signed a contract to purchase the Seachange group, which has two existing, two partly completed and two greenfield land lease communities in South-East Queensland.
This $270 million transaction will bring 693 existing and 548 planned Seachange sites under the Ingenia banner.
Separately, Ingenia has also announced it has signed a $24 million contract to buy a greenfield land lease site at an undisclosed location in metropolitan Brisbane, where the company is planning 160 homes.
Ingenia has also made offers for three lifestyle communities in NSW and Victoria, and a partially completed lifestyle community in Queensland.
It’s also purchasing new mixed use and holiday communities in NSW and Victoria.
Ingenia operates three types of communities:
- Land lease communities, which are occupied by permanent residents usually over the age of 50 who own the dwelling they live in and sign a long-term lease with Ingenia (as land owner). These are also known as lifestyle communities.
- Holiday parks, which offer tourist attractions and have dwellings which are sub-leased to holidaymakers for short periods of time
- Rental villages, in which renters - usually pensioners - lease dwellings on an ongoing basis but do not own them and also enjoy food and services.
A report prepared by Downsizing.com.au in September concluded that the land lease community industry was undergoing rapid growth after benefitting from a number of COVID-19 induced marketplace trends, including:
- Internal migration towards regional areas
- A strong property market enticing over 50s to sell their family homes
- Increased community acceptance of remote working, which suits the growing number of younger downsizers moving into these communities
- More buyers wary of being isolated in their suburban homes and instead wanting to live independently within dedicated downsizing communities
The report also found that, even before COVID-19, the land lease community model had a number of strengths, including that buyers could:
- Avoid stamp duty, council rates and pay no or lower exit fees
- Use Commonwealth rent assistance payments to subsidise the cost of ongoing site fees
- Access housing in lifestyle-rich regional areas, usually at a discount to the median house price in the surrounding area
- Access an expanding range of on-site sporting, social and lifestyle community facilities
- Move into modern and well-designed homes
The Ingenia move follows Stockland’s announcement in July that it had acquired 13 existing and future Queensland communities operated by Halcyon.
This $620 million transaction included the acquisition of 3,800 Halcyon sites across 13 land lease communities, made up of six established land lease communities, four communities in development and three projects in planning.
According to Ingenia’s ASX announcement on Monday, its $552m buying spree will consolidate its position as Australia’s largest land lease and holiday communities group.
Importantly, however, the Ingenia decision will also allow it to catch-up to Stockland’s land lease community development pipeline of more than 6,000 dwellings.
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