20 Sep 2021
Words Valerina Changarathil, Deputy Business Editor The Australian

Colonial Tweed Holiday & Home Park, Hidden Valley Holiday Park, Wild River Caravan Park and Chinchilla Tourist Park sold in overpriced market

Brokers and industry experts say sales of popular caravan and holiday parks are running hot around the country, emerging as some of Australia’s hottest commercial assets.

Recent sales include the Colonial Tweed Holiday and Home Park at Tweed Heads, NSW, the Hidden Valley Holiday Park in Darwin, NT, the Wild River Caravan Park at Herberton in far north Queensland and the Chinchilla Tourist Park in the Western Downs region of Queensland.

While the total purchase price of these properties across different vendors is $22m, the Tweed Heads park commanded about $13m, making it one of the biggest deals in the country.

New owner Philip Clark said he was pushed to pay a higher price for Tweed Heads, which will become part of a family business operation that also includes the 140-site Bay Village Estate at Morisset in NSW.

“The big corporates have now moved into the market and this made it hard for me to secure a high quality park asset with scale,” Mr Clark said.

“There’s definitely a lot more competition for these park assets and this has pushed prices higher.

“We were pushed high to buy the Colonial Tweed but I still believe it’s a good purchase because of its high quality, excellent location and it has outstanding managers already in place,” he said.

The Colonial Tweed covers a prime 2.3 hectare riverside site on the southern bank of the Terranora Creek Inlet and has 115 sites, made up of 74 permanent and 41 holiday cabins and sites.

ResortBrokers, a long-established and experienced specialist agency operating in the accommodation and hospitality sector, managed the four sales and has another five undisclosed sales worth $34m set to be completed by December.

Experienced investors and operators are looking to capitalise on a major surge in domestic and drive tourism created by the lockdowns and international border closures, ResortBrokers said.

“The Colonial Tweed received incredibly strong buyer demand and confirmed what’s happening in the northern NSW market right now,” ResortBrokers’ northern NSW specialist Greg James said.

“A surge in tourism and strong migration from the cities is creating this demand which means this region is running hot right now and the smart money is following that.

“These parks are often located on prime real estate and also benefit from the fact that they can accommodate both the strong domestic tourism demand and provide longer term accommodation for people who want to move to a region because of its lifestyle benefits,” he said.

The Hidden Valley Holiday Park in Darwin was sold by ResortBrokers’ SA and NT specialist Kelli Crouch who is fielding increased interest for caravan parks in her region.

“The rising demand for parks and resorts is due to the fact that they often present multiple income streams and produce strong revenue,” Mrs Crouch said.

“Australians are embracing the “good old fashioned road trip” in the wake of international border closures and accommodation assets that are located in areas that are relatively Covid-free are benefiting from this as well,” she said.

Demand from investors has increased exponentially in the past 12-18 months despite the COVID-19 lockdown, said Liam Greentree, associate director and caravan parks specialist at Colliers.

“Investors are taking a longer term view on the market with a majority of caravan park operators experiencing significant increases in average room rates and occupancy levels between the varied lockdowns over the past 18 months,” Mr Greentree said.

“This occurred despite some border restrictions still being in place and should increase again once the lockdown measures and border restrictions are eased.

“Investors are also of the opinion that there will be continued interest and appetite for domestic travel over the coming years.”

Yields for high-quality coastal parks now range between circa 6.5 per cent – 7.5 per cent if above $10m.

A number of existing entities are competing for caravan parks, including Ingenia Communities, Tasman Tourism, Hampshire, NRMA and Discovery Holiday Parks.

Discovery Holiday Parks is part of SA-headquartered G’day Group, Australia’s largest regional accommodation network with over 300 properties that also includes the G’day Parks brand.

The billion-dollar G’Day Group, majority owned by Sunsuper, invested $100m in 14 new poperties in the past few months,  including high-end luxury lodges El Questro in WA and Kings Canyon Resort in the NT.

“Usually June would be travel low-season in many parts of Oz, but not in a Covid year, G’day Group chief executive Grant Wilckens said in a blog post in June, before national shutdowns across NSW and Victoria.

“Our bookings are up 150 per cent on a ‘normal’ year & in wintery NSW we’re up almost 200 per cent.”

Resort and retirement village owner Infenia Communities Group is also riding the surge in regional tourism and picked up more sites in Queensland and Victoria in a $40m play earlier this year.

Australia has about 2400 holiday and caravan parks, most of which have seen demand pick up in 2020 and 2021.