The $100M Caravan Park surge: Why investors can’t get enough
Caravan parks emerge as big business. Leading brokers say their biggest problem is finding enough stock to meet the huge demand
Caravan and holiday parks are on the move upward as increasingly valuable assets for investors. After the challenging years of lockdowns and travel restrictions during COVID-19’s reign of terror, caravan and holiday parks have emerged from the lost years as prized properties.
This is driven by their high land value, multiple income streams and increasing popularity with families, remote workers and grey nomads.
Leading brokers say their biggest problem is finding enough stock to meet the huge demand. Sales of mixed-use holiday parks offering both cabins and caravan sites have already exceeded $100 million in Australia this year, compared to $114.06 million for all of 2023.
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Holiday parks can operate on limited resources while offering high returns, with many travellers finding their flexibility and relatively low cost very attractive. Caravan and campervan registrations across the nation have steadily grown over the last decade. In 2023 there were almost 859,000 caravans and campervans registered. This was a 21 percent increase since 2019 and an all-time record.
CRE Brokers’ Sunshine Coast-based Craig Clark says: “Our biggest problem is getting stock to satisfy the great demand for caravan and holiday parks.
“We’re finding that big parks sell quickly because the large corporations such as Ingenia or Tasman snap them up. The smaller parks under about $5 million take a little longer because they are usually family operators who need to raise the finance.
“We’ve sold a few big parks over the last year but fewer big parks are becoming available. They have been swallowed up by the corporates over the last decade or so, and they very rarely come back onto the market.
“There are not many parks being built anywhere in Australia – probably only half a dozen in the last few years. There’s been a few “greenfield” manufactured home sites being developed but few traditional caravan parks and holiday parks, and their scarcity makes them all that more valuable.”
Mr Clark said parks provided multiple income streams and were a very safe investment. “Generally, there is the scope to improve them, and update the accommodation,” he said. “They are often a flexible business that lets you move with the times.
“Quite often the parks that sell quickly have a bit more room for development and the buyers are willing to pay accordingly.”
Tourism Research Australia says the number of caravan and camping trips (including glamping) continues to grow.
In the year ending 2023, Australians took 15.3 million caravan and camping trips and spent $14.3 billion doing it. This exceeded pre-COVID-19 levels and was at an all-time high.
Of these trips, commercial caravan parks and camping grounds accounted for 55 percent of trips, 61 percent of nights and 67 percent of spend.
Mr Clark has vast experience in the caravan industry, having owned, operated and developed a caravan park with his wife at Boomerang Beach near Forster in NSW. He has seen the industry growing steadily.
“We bought a park at Boomerang Beach in 1997,” he said. “It was rundown but it was beachfront and a fantastic location. We set about building a community title resort there and we ended up structuring a management rights business over the community and sold all the beach houses off to investors and we sold the management rights business to Mantra in 2006.”
This article featured in our Caravan Industry Spotlight HERE
Mr Clark said that while many parks were sold off for redevelopment 15 to 20 years ago “now we are seeing that the most profitable use of the parks is for them to remain as caravan parks. People see the potential upside and the security that comes from the land value.”
He said in the last couple of years he had sold the BIG4 Ballina Headlands Holiday Park to the Tasman group for $20 million, while Serenitas Management had also bought two side-by-side permanent relocatable home parks at Ballina through CRE.
“And only a few weeks ago we settled the Bli Bli caravan park on the Sunshine Coast. We have a few more under contract.
“If we’ve got a really good caravan park, we generally sell them off-market even before they go on our website because the demand is so strong. We know the buyers, and we can make contact with them before the property is advertised and away we go.”
Mr Clark said his company was currently marketing the Atherton Holiday Park and the Googarra Beach Caravan Park at Tully.
Michael Philpott, from Tourism Brokers, agrees that the market for caravan parks and holiday parks is “incredibly strong”.
“It’s difficult for brokers to get stock when it comes to anything where you can erect MHEs (manufactured housing estates). Parks of that size with available land are incredibly popular.
“The big buyers are coming in with their finances sorted and ready to go to pick up the most expensive properties while the ‘mums and dads’ who are buying the smaller parks are working through banks and it takes longer.
“That’s why we always say you have to use specialists in the industry when it comes to finance and legal.
“Across the board parks are very popular. They are being upgraded all the time which makes them more and more popular with consumers. It’s all about the guest experience and a lot of the parks have added a great deal of luxury.
“Many have increased their accommodation as well, and we’ve seen parks with more than 50 cabins on them.”
Mr Philpott said: “In general the industry is powering, and parks are benefiting from all the people who now own caravans.
“Manufactured housing is also a more competitively priced alternative for people when it comes to having somewhere to live. Manufactured housing is creating communities with space around them, and that segment is getting stronger and stronger.”
Mr Philpott said Tourism Brokers recently sold properties to owner-occupiers going into Goondiwindi and eastern Queensland.
“We’ve had MHE purchasers go into Central to North Queensland, and we’ve got owner-operators developing and doing an MHE over in Western Australia. The parks we are selling in Victoria are primarily to owner-operators.”
He said sales in NSW and Victoria were “a lot stronger than in Queensland.”
“Insurance remains an issue for parks on the Queensland coast north of Rockhampton because of the cyclone activity,” he said.
“Some of the inland parks are also seeing a decline in visitor numbers because of the high cost of fuel and worries over interest rates. But there are a lot of projects coming into central NSW in the way of solar and Snowy Hydro 2.0. Those infrastructure projects will give NSW a real boost.”
Mr Philpott’s portfolio of properties for sale includes the Bega Caravan Park on the NSW South Coast. The well-established caravan park is nestled on more than a hectare and has 50 approved sites, providing a solid foundation for a thriving business. It is priced at $4million.
For $3 million, he has the Alva Beach Tourist Park, just south of Townsville. It has beautiful coastal scenery and proximity to the Great Barrier Reef and comes with 83 spacious sites and cabins.
The Lake Coolmunda Caravan Park at Inglewood near Goondiwindi is priced at $1,450,000 and turned over a whopping $683,404 (GST excl) in 2022/23. The park is well maintained and has multiple income streams. These are increasing significantly due to major works in the area for the next few years. There is a large main house and a separate caretaker cottage, and multiple sheds for storage, machinery and equipment. A large inventory of machinery, valued at $150,000 also comes with the park, including a tractor and backhoe.
The Bailey Bar Caravan Park, located in Charleville, 750km west of Brisbane, has a well-established, reliable and stable track record of consistent turnover and net profit. It has 15 exceptional cabins of varying configurations and 50 powered sites. It is currently listed for $2,100,000.
Meanwhile, the Koonwarra Family Holiday Park at Lakes Entrance in Victoria comes with a price tag of $7,950,000 but has turned over more than $ 1 million a year for the last two years and has been a favoured holiday destination for generations of Australians.
Set on 1.78 hectares it caters for Melbourne residents wanting a retirement lifestyle and meets the needs of the increasing numbers of retirees hitting the road with their caravans. The park appeals to holidaymakers enroute from Sydney to Melbourne, and also caters for sporting groups, school camps, and Probus club outings. It already has 105 sites but comes with a large parcel of undeveloped land.
Kevin Connolly a Director of CRE Brokers who oversees marketing Victorian, NSW, South Australian and Tasmanian properties for CRE says while sales are very strong for caravan parks in the southern states it remains a “two-tiered market”.
“The major corporates have a very strong appetite for the larger caravan parks and the smaller family-run parks are still keenly sought after but they are taking a little bit longer to sell than the larger ones,” said Mr Connolly, who is based at Carrum Downs, in Melbourne’s south.
“If there is no further redevelopment opportunity on a site, the larger caravan parks would have to be doing $1 million a year turnover for the corporates to be interested.”
He said CRE had sold “some significant properties” in Victoria in the last year and a half. “Eighteen months ago we sold seven caravan parks in suburban Melbourne and country Victorian areas to a large corporate for more than $100 million.
“We’ve sold some other significant properties in recent times including the Somers Caravan Park on the Mornington Peninsula, Amaroo Holiday Park on Phillip Island and Beachport Caravan Park in South Australia. We’ve also got a couple of others under offer.”
Mr Connolly is marketing the Allawah Caravan Park at Paynesville in Victoria’s Gippsland. It’s listed for $8,500,000 and is situated on almost four hectares of waterfront park on the Gippsland Lakes. There are two residences including a modern four-bedroom waterfront home.
The property is registered for 183 caravan park sites for mixed-use (tourism/permanents). It has 145 sites and 20 boat storage sites currently in use.
The development opportunity is underpinned by 78 tenants who are “annuals” and 16 “permanents” paying regular fees. Three new villas have just been constructed and sold, and six others are under construction. There is a great opportunity to convert this mixed-use park into an Over 50s Permanents Village. He said the leasehold on the Big4 park at Barham on the NSW side of the Murray River was excellent value at $985,000.
There are more than six hectares of riverfront land with 130 sites including 15 cabins (two of which are pet friendly), powered and unpowered sites and four ensuite sites. Internal gravel surfaced roadways are well established and drained, and all sites have designated parking areas.
“Getting good parks is always the challenge for a broker,” Mr Connolly said. “There is a big demand for parks because people realise they are highly profitable – with significant cashflows and they are underpinned by significant land value.
“There is usually a diverse income stream involving holidaymakers, permanent residents and ‘annual’ holidaymakers. Generally, a caravan park will offer two or three income streams and generally those annuals or permanent residents involve a guaranteed income for minimal risk.
“Caravan and holiday parks have solid reputations as profitable businesses and safe investments.”
This article featured in our newly published
Caravan Industry Spotlight HERE
Grantlee Kieza OAM has won three Queensland Media Awards, two Australian Sports Commission Awards and has been a finalist for the Walkley and News Awards and for the Harry Gordon Award for Australian sports journalist of the year. In 2019 he received the Medal of the Order of Australia for his writing. You can find more of his work in our AccomNews & Resort News print magazines.
He has written 22 acclaimed books, including bestsellers Hudson Fysh, The Kelly Hunters, Lawson, Banks, Macquarie, Banjo, Mrs Kelly, Monash, Sons of the Southern Cross and Bert Hinkler.
