GreenFort Capital targets $800m land lease portfolio with Queensland buy

GreenFort Capital is making a play into the one shining light in Australia's residential market - land lease housing for downsizing Baby Boomers - with the acquisition of a second community in Queensland's Gympie region, which it wants to make part of an $800 million portfolio.

Alternative real estate fund manager GreenFort is again pairing with private equity firm Gaw Capital - with which it started collaborating in 2018 to develop its Reside Communities portfolio of retirement villages - on the purchase of Willow Village in Southside.

There's a growing snowball of players and money rolling into the residential property play on one of Australia's biggest demographic changes - the downsizing of a generation of Baby Boomers who realise cash by selling their equity-rich family homes and moving into a smaller home in a dedicated community.

The country's largest property developers, Mirvac and Stockland, have entered the sector that for years was the domain of smaller, specialist operators such as Ingenia Communities, Lifestyle Communities and a host of private companies.

Much of the recent growth reflects a consolidation of existing players as large companies seek to build scale rapidly.

Under the land lease model, residents buy their homes but pay rent to the operator for the land their home occupies. This is often cheaper real estate because it is land zoned for caravan parks or commercial use, rather than permanent residential use - and lower-income buyers can also benefit from Commonwealth rent assistance payments.

The Willow Village property northwest of the Sunshine Coast has 26 homes on a 25,000-square-metre site, and has an adjacent 75,000 square metres with development approval for a further 150 homes.

Title records show GreenFort paid $1.75 million for the Willow Village site to an entity owned by Simon Price, Rodney Moyle, Dale Fleming and Gus Walsgott.

It forms the second property in GreenFort's Liven Communities, founded last year with the acquisition of a 57,000-square-metre parcel of land on Beach Road in Hervey Bay, 120 kilometres north, for which it has approval to develop 132 homes.

The company acquired that site from the Hervey Bay RSL and Services Memorial Club for $7.7 million in November.

"The domestic population base is ageing rapidly, and the provision of affordable housing supply has never been so constrained." said GreenFort executive Adam Vaggelas, who runs the business with colleagues Nick Singleton and Daniel Cheilyk.

"We see a compelling opportunity to deliver quality, well-located land lease accommodation which will assist senior Australians to downsize and release equity to fund their retirement."

When completed, the two villages will account for about $200 million of the planned $800 million portfolio, which will likely hold 1200 homes. 

Hong Kong-based Gaw Capital Partners managing principal Kenneth Gaw said the Reside Communities retirement living portfolio had grown to more than 1000 homes with a gross value of $1 billion, and he was looking forward to jointly developing another platform for land lease housing.

"Our shared vision of providing high-quality housing solutions aligns perfectly with the growing demand and changing demographics in Australia, Mr Gaw said.

"In addition, this joint venture further strengthens our commitment to investing in sustainable and innovative projects that positively impact communities."

Published on Friday 21 June 2024