The growth of this housing sector surprises even one of its pioneers
The speed of growth of Australia’s land lease sector has surprised Simon Owen, Ingenia Communities’ outgoing chief executive, and a pioneer of the business in Australia.
Owen, who earlier this month announced his departure from Ingenia after 14 years of building it up to have the largest portfolio of land lease lots in the country – with 11,000 operational, in-development and pipeline home lots – says it wasn’t like that in 2012, when he was attempting to buy his first community in Morisset in the Hunter Region of NSW.
“I had to go and plead with the banks, I had to plead with investors,” says Owen. “Everyone thought it was trailer parks.”
Land lease communities are typically built on land zoned for temporary accommodation such as caravans, but the growth of the sector – and the role it is playing as a financial as well as housing solution for the growing cohort of ageing Baby Boomers – shows its increasing acceptance.
Chadwick Property Valuers, which publishes regular reports on the sector, estimates the number of total homes occupied or approved has increased annually at an average of 7.5 per cent during Owen’s tenure as CEO since 2009, from 30,000 to 35,000 homes to a figure between 80,000 and 85,000 now.
Chadwick Property Valuers director Luke Chadwick credits Owen for much of that growth.
“During his tenure, Simon has been one of the leading advocates for the land lease sector and has played a key role in its evolution,” Chadwick says.
The country’s largest developers – particularly those with large established estates or master-planned communities – have identified the opportunities in the sector and are investing large sums of capital into it.
Stockland bought scale with the $620 million acquisition of the Queensland-based Halcyon business in 2021, and last month Mirvac made a similar move when it said it would spend $300 million to acquire a near-half stake in the Serenitas portfolio of 27 communities.
“I knew it was a great business, but it surpassed my expectations in how quickly it has really taken off,” says Owen, who adds the company will appoint his successor in the next month or so. “It was a slow gestation period, but in the last three to four years it’s exploded. It’s this amazing business where you can make a development profit, collect rent and still own the land.”
After giving Ingenia the largest portfolio of land lease lots in the country – Chadwick’s figures show it has 11,000 operational, in-development and pipeline home lots – Owen hasn’t decided on his next move.
“Whether that means working for another company, whether it means starting something up for myself, I’m going to take the next six months to think about that,” he says.
