Invesco Real Estate has formed an open-ended partnership to develop land lease community (LLC) assets with Australian property group Stockland.
The Stockland Land Lease Partnership (SLLP1) will hold an initial portfolio of three LLC assets with development cost of more than A$760m (€466m), and would create manufactured homes valued at around A$1.1bn.
Invesco Real Estate’s flagship pan-Asian core strategy will have a 49.9% interest and ASX-listed Stockland holding the slight majority of 50.1% interest in the vehicle which will create sites for almost 1,200 homes in New South Wales and Queensland. It has an opportunity to acquire a fourth land lease community at Providence in southeast Queensland plus further pipeline investments.
Ian Schilling, head of Asia Pacific Core Funds for Invesco Real Estate told IPE Real Assets: “This is our first LLC investment in Asia Pacific where it is an emerging institutional asset class. We have invested in the land lease sector [known as manufactured housing] in the US where it’s a key part of our investment strategy.”
Under the Australian model, Schilling said the houses would be sold to retirees looking for affordable homes and they lease the land on which the homes sit.
Schilling said returns would come from the profit margin from the sale of the homes and a secure annuity-style income from the long-term land leases.
Stockland chief investment officer, Justin Louis, said: “With the execution of SLLP1, we are pleased to welcome another globally recognised institutional partner to our around 8,800-home Land Lease Communities pipeline.”
SLLP1 is Stockland’s second partnership in the LLC sector, following the Stockland Residential Rental Partnership established with Mitsubishi.
An earlier version of this story misstated the development cost figure in the second paragraph
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