Senior living in manufactured housing communities is catching on in Australia just as it has in the United States. The only differences are that these communities are called “Caravan Parks” down under and presently only 2% of Australia’s population call a manufactured house their home compared to 6% in the United States. Just as in this country, these types of communities appeal to an aging population and the ever-increasing demand for affordable living accommodations.

Gateway Lifestyle co-founder Trent Ottawa

This was a business that Australian Trent Ottawa and his friends began with just one caravan park and the hope of turning it into something far ­bigger. Now, almost five years later, Gateway Lifestyle has become one of Australia’s largest manufactured housing village operators, controlling 28 properties with at least 4,000 sites on behalf of investors, and the prospect of a listing on the share market with a value of about $300 million. This is an investment sector that has been luring some of the Australia’s most wealthy families, along with veteran bankers and private equity.

“Caravan parks have always been good stand-alone assets,” says Ottawa, managing director and co-founder of the villages that Gateway operates. “Corporates are buying them because they have good financial fundamentals.”

In addition, investment banks UBS and Macquarie Group have been sounding out investors for an IPO for Gateway, and a decision on whether to proceed will be made in coming days.

Effectively, Gateway generates earnings from a model in which a retiree uses savings to ­acquire a manufactured home within one of the villages for about $260,000 and pays an average weekly rent of $144 to the ­operator, who owns the land.

Gateway expects to generate about half of its earnings from the rents, which increase at the pace of at least inflation, and the ­remainder from development at centers close to hospitals and aging-care facilities. It also benefits from average annual increases of 5.2% in addition to capital gains of the land.

With 2,000 parks in a highly fragmented industry, Ottawa believes Gateway is well positioned for growth. Future plans include providing easier access to medical care and pharmaceutical products at the villages in a bid to make the accommodations more attractive for elderly residents.

Ottawa had worked at an accounting firm before launching Gateway and raised the money for the first community with director Todd Pepper, who formerly ran a property syndication business.

Not too surprised by his success, Ottawa said that “This has been a good industry to invest in since there were first caravan parks, mainly run by mum and dad investors.” ##

(Photo Credit: News Corp Australia)

 

Article submitted by Sandra Lane to – Daily Business News – MHProNews.