GreenFort, Gaw Explore Institutional Opportunities in Australia Land Lease: MTD TV

Australia’s ageing population has created an opening for institutional capital to invest in alternative living sectors serving the senior market, according to key executives from GreenFort Capital and Gaw Capital Partners who were interviewed at Mingtiandi’s APAC Residential Forum on Wednesday. Watch the full recording>>

GreenFort partner Adam Vaggelas and Gaw managing principal Kenneth Gaw gave an update on how a joint venture between the two firms is tackling Australia’s housing shortage by investing in land lease communities, a format that lets residents own their home while leasing the underlying land. Launched last year with a goal of scaling up the platform to 1,200 homes for seniors, the JV is now targeting 3,000 dwellings, the executives said during the forum, which is sponsored by Yardi.

Vaggelas, who previously worked for investment banks Morgan Stanley and Goldman Sachs, noted that the lingering supply-demand disconnect in Australian housing presents a “real scale opportunity” in the A$11 trillion ($7 trillion) living sector, where just 1 percent of the market is institutionalised.

“To put that in perspective, the UK has about a 6 percent institutionalisation rate,” he told MTD TV. “The US sits at about 15 percent. So we think there is a tremendous runway for institutional capital to play a big part in the Australian housing market.”

Asset Rich, Cash Flow Poor

The joint venture looks for sites of at least 10 hectares (25 acres) in order to attain scale and build batches of single- or double-level homes that can be brought to market gradually and sold down.

“So typically a smaller house, a two-bedroom or a three-bedroom home, that a retiree can downsize to, but with well-appointed amenities and an on-site team there to assist with their needs as well,” Vaggelas said.

For its land lease offerings, Liven targets baby boomers who typically purchase their new home on a cash basis as they sell off a larger family dwelling in their later years.

“They tend to be asset rich and cash flow poor as well,” Vaggelas said. “And so that enables them to downsize, release equity and then live a more fulfilled retirement.”

For Hong Kong-based Gaw, whose portfolio also includes purpose-built student accommodation in Australia, land lease presents an intriguing alternative.

“We have been investing in PBSA and we like that sector as well,” Kenneth Gaw said. “But the construction cost makes it difficult because a lot of those kinds of construction are in city centres, big block buildings. And with construction costs going up, it’s very difficult to pin down where we can build, and typically it would take a year to plan, three years to build and four years before you start to get your first cash flow coming in.”

Land lease communities are more akin to landlord subdivisions, he said, with manufactured homes that can be rolled out in batches of 30 or 40 at a time. Even better, the houses provide two cash flow streams: once when sold, followed by recurring rental payments to the land owner.

“And those rentals are also partially subsidised by the government,” Gaw said, “So it’s a good credit quality as well.”

Forum Concludes Thursday

The 2025 Residential Forum wraps up Thursday with a discussion focused on prospects for the mainstream build-to-rent sectors in Australia.

Joining the MTD TV session will be Sarah Winbur, senior portfolio manager for real estate at APG Asset Management; Dan McLennan, founder and co-CEO of Local: Residential; Adam Hirst, co-founder and CEO of Novus; and Christian Grahame, head of BTR pioneer Home.

After the interview portion, Mingtiandi’s team will moderate a live Q&A session in which viewers can quiz the speakers on their market outlooks and get direct insights from some of the region’s top experts in the rental residential space.