Prices for some of the best beach holiday parks have risen by more than a third over the past 18 months because of the booming investor interest in the national tourism industry, and growth rates of more than 30% are the norm for the game, a report said.
Other contributing factors to the boom are the rise in popularity of manufactured home estates, also referred to as lifestyle communities, higher park incomes, and the scarcity of high-end investment assets.
“We are seeing many newer players trying to get into the industry, with varying degrees of success, and assets selling at values that we wouldn’t have thought possible only a few years ago,” said Angus Strachan, director of business services at BDO, the industry-specific advisor to financial institutions.
Strachan has cited a recent sale of an NSW coastal park for $16 million appraised at $8 million just 18 months ago.
He noted that the most prominent investors included a mixture of over-50s and holiday park lifestyle operators like Ingenia, Aspen, G’Day Parks, GemLife, NRMA, Tasman, National Lifestyle Villages, and Hampshire Property Group.
They’re competing against syndicators and private equity companies for the best parks, forcing prices upwards. This results in the growth of operators trying to test the market.
The prices for high-quality parks have increased by up to 50 % in the last 18 months, with an average of over 30 percent.
Michael Philpott, a director at Tourism Brokers, said investor interest was mostly for coastal properties. However, critical regional properties were doing very well thanks to an improvement in business performance.
Turnover increased by 15 percent to 20 percent in non-lockdown regions.