Stockland explores affordable land lease housing as sector booms
Stockland plans to deliver more than 3000 lots in its burgeoning land lease division, which offers affordable manufactured homes for the retirement sector.
In his first few weeks as the new chief executive, Tarun Gupta has identified the sector that he has deemed “horizontal residential for rent” (as opposed to the build-to-rent sector) as the growth engine within its communities operations.
Under the scheme, a resident buys the house but rents the land on which it sits from Stockland, creating a more affordable entry to the booming market.
The owners also pay a weekly site fee that covers access to and the maintenance of a clubhouse and other common facilities, looking after shared green areas and owners’ front verges.
Mr Gupta said Stockland has land lease communities as part of its Aura project on the Sunshine Coast in Queensland and Minta development in Melbourne.
“Instead of being in a vertical environment, it’s horizontal and it’s targeted to the very fast growing Baby Boomer market who are coming into that demographic of 55-plus, and we have some one of the largest land banks in the country, which we can use to create these new communities,” Mr Gupta said.
“There’s a lot of strong demand from our customers, and we’ve already got about 3000 lots in that space that we are looking to bring to market over the coming years.”
Mr Gupta was previously the chief financial officer at Lendlease and has replaced the long-serving chief executive at Stockland, Mark Steinert.
“Residential has been an enduring focus for Stockland since we were founded 70 years ago. And we’ve enjoyed very much a leading position. It’s a key business for us, and the environment is very favourable,” Mr Gupta said.
National residential developer Cedar Woods has also benefited from the demand with its presales riding to a record $439 million to May 31.
In a market update, the ASX-listed $531 million developer of residential communities and commercial projects (mainly in WA, Queensland, Victoria and SA) said the pre-sales data shows a rise of more than 20 per cent on the $360 milliong balance recorded at the end of June 2020.
Cedar Woods’ managing director Nathan Blackburne said the group is well-placed to deliver strong growth in earnings into the medium term.
He said stage releases across the portfolio, which are scheduled for the first quarter of the 2022 financial year, will extend sales momentum and underpin future revenue growth.
“Cedar Woods’ projects in South Australia and Queensland are experiencing very strong sales conditions, which have generated a near-sellout of available land lots at Ellendale and townhouses at Greville in Queensland, as well as townhouses at both Glenside and Fletcher’s Slip in South Australia,” he said.
“New sales releases are planned for these projects in coming weeks to meet demand. The first settlements from both Fletcher’s Slip and Greville will occur in the 2022 financial year.”
In Victoria, land lots at Wollert and townhouses at the St.A and Williams Landing developments continue to perform strongly, with interest in apartments and office product increasing.
