Going, going, gone! If the price is right, van parks are selling quickly
Most grey nomads are well aware that the nature of caravan parks is changing. But, behind the trend towards more bouncing pillows, swimming pools and ‘super dooper’ new facilities, is a growing corporatisation of the sector.
Caravan parks have traditionally been the domain of family operators and local councils but – according to a report in the Australian newspaper – corporate groups are circling the sector with aggressive acquisition plans.
It seems that ‘trophy’ assets in prime seaside locations are the prime targets for these groups.
“In the past 10 years, as property prices in prime locations have soared, many caravan park owners have been forced to sell to developers,’’ IBISWorld says in a sector report.
IBISWorld says this has led to a ‘worrying trend’ that has seen 1.5% fewer sites available than there were five years ago.
The pressure on ‘mom and pop’ owners to sell has been intensified as soaring values has meant soaring rate bills, as wells. Even the decision of some states, notably Victoria and Western Australia, to respond by waiving caravan parks’ obligation to pay land tax has not stopped the big sell-off.
The Australian reports that risk-averse councils have also closed some sites because they are vulnerable to a one-in-100-year flood.
On the other side of the coin, the newspaper reports that prohibitive land prices mean few greenfield sites are emerging, especially in prime locations.
“There hasn’t been a new caravan park built on the east coast for the last 20 years,” says Simon Owen, the chief executive of Ingenia Communities, which has itself acquired 19 NSW and Queensland sites in the past year. “You will see a considerable reduction in the number of caravan parks over time as developers commit to higher and better use.”
The Australian reports that although some suspect the corporate acquirers of being more interested in land-banking than facilitating affordable family holidays, a well-run park can still produce low-risk, double-digit returns.
It seems that the increasing number of grey nomads – helped by cheaper petrol prices and a falling Aussie dollar which is frightening people off overseas holidays – is making the caravan park sector even more attractive.
The corporatisation of caravan parks trend then looks set to continue for a while yet with unknown implications for more budget-minded grey nomads. Watch this space!
