Macquarie Group has entered Australia’s fast-growing land lease sector with an A$2.9 billion fund aimed at developing 5000 homes for downsizers over the next five to seven years, positioning global investors to tap into the nation’s housing shortage.
The US$1.9 billion (A$2.9 billion) Macquarie Real Estate Partners fund has already secured more than 2000 lots across eight projects in south-east Queensland and New South Wales.
On Tuesday, its newly established Millbray business commenced construction at its first community in Flagstone, south of Brisbane.
James Kemp, Head of Real Estate Asia Pacific at Macquarie Asset Management, said: “MAM has extensive experience investing in the Australian living sector. We continue to have high conviction in this sector including in the sub-sector focused on the aging population.
"Millbray is our latest investment in an Australian living platform and our eleventh investment in living platforms globally.”
The Flagstone community will deliver 293 homes across 12 hectares and represents the fund’s first step into a market where listed rivals such as Stockland and Mirvac are also offering offshore institutions exposure to Australia’s housing shortage.
Land lease communities are gaining traction as they provide an affordable downsizing option for over-50s. Under the model, residents buy a dwelling but not the land, which remains leased. This allows homeowners to free up equity from selling their suburban homes, while paying site rent often supplemented by Commonwealth Rent Assistance.
Macquarie’s push comes as institutional capital continues to flow into the sector. Stockland has partnered with Japan’s Mitsubishi Estate and U.S.-based Invesco Real Estate; Mirvac has teamed with Pacific Equity Partners to acquire a half stake in the Serenitas portfolio; and GemLife recently attracted a blend of domestic and offshore institutions in its initial public offering.
Macquarie’s Millbray business is led by former Ingenia Communities Queensland development director Matt Fedrick and former Hometown Australia acquisitions head Rob Cross.
In addition to the Flagstone project, Millbray has an approved site at Highfields near Toowoomba and is seeking approval for another community outside Bundaberg.
The Ashcroft community in Flagstone sits within ASX-listed Peet’s $3.9 billion, 126-hectare Flagstone City development.
By allocating part of its site to Millbray, Peet is able to expand housing variety within its master-planned community while unlocking capital earlier.
