Australia’s Land Lease Sector Ready to Meet Needs of Seniors and Investors Sponsored Feature

Like many developed economies, Australia is home to an increasingly ageing population. According to the Australian Institute of Health and Welfare, the median age has risen from 33 years in 1994 to over 38 years in 2024, with individuals over the age of 65 now comprising 17 percent of the total population. The institute estimates that by 2066, almost one in four Australians – representing approximately 4.5 million people – will be over the age of 65.

This ageing population is fueling demand for housing from the over 50’s demographic, many of whom are seeking opportunities to downsize from their traditional family homes, with an increasing number of retirees and late career professionals choosing land lease communities – developments of purpose-built homes in communities designed to meet the specific needs of over 50’s. This trend enables residents to unlock capital from their existing homes while benefiting from access to amenities not typically available in conventional residential settings.

To meet the needs of this growing segment of the population, Macquarie Real Estate Partners (MREP), a real estate fund managed by Macquarie Asset Management’s real estate division, in September last year announced that it had established a new land lease community platform aimed at building a portfolio of 5,000 homes in land lease communities across Australia’s eastern seaboard.

“The investment we’re making in the land lease sector through this business is based on serving Australia’s ageing population – a cohort that’s expected to increase by about 1.7 million people over the next ten years,” said Justin Ayre, a Managing Director with Macquarie Asset Management who is overseeing the investment. He added that, “There’s only about 2 percent of Australia’s population living in a land lease community today and we expect that to continue increasing in line with demographic trends.”

Queensland Project Underway

MREP is investing in the land lease sector through Millbray – a vertically integrated developer and operator of land lease communities. “With living sectors typically highly localised and fragmented, they are difficult for most institutional real estate investors to access, and this is largely because strategies in the sector require dedicated management teams with local expertise and specialisation,” said Ayre. “That’s why Millbray was set up as a vertically integrated specialist that has the capability to design, develop and operate land lease communities.”

Through MREP’s ownership, the new platform is able to leverage Macquarie Asset Management’s experience and expertise in helping to build residential platforms. As the platform commences the development of its secured pipeline of residential sites in Queensland and New South Wales, it anticipates delivering more than 2,000 home sites with a projected gross development value of more than A$1.7 billion (US$1.1 billion).

The first project in Millbray’s pipeline, Ashcroft, is currently underway in Flagstone, Queensland – outside of Brisbane – with the 12 hectare (30 acre) site expected to provide 293 homes, with the first homes to be built in 2026.

“One of Ashcroft’s key distinguishing features is the range of amenities that residents will have access to,” said Ayre. “There’s about 5,000 square metres (53,820 square feet) of community facilities including a clubhouse with a sports lounge, golf simulator, craft room, library, gym, cinema and yoga studio.”

Residents will also enjoy outdoor amenities including a 25-metre lap pool, bowling green and pickleball courts. The project is located within a master-planned precinct which gives residents access to 330 hectares of parks and pathways, while also being close to major health facilities, community amenities and transport connections.

The typical buyer in a land lease community is one who has sold their home to downsize and unlock capital, according to Macquarie Asset Management. This approach allows the resident to retain proceeds from the sale of their home, providing them with greater financial flexibility to enhance their lifestyle, while also gaining access to an amenity-rich community and living in a purpose-built home designed for ageing.

Under the land lease model, residents in Millbray’s land lease communities own their home without incurring stamp duty on the purchase, and pay a transparent weekly site fee to lease the land on which their house is situated. The resident retains any capital gains realised when they sell their home and is not subject to exit fees.

“Millbray has had a really strong response from the market following the launch of its first land lease community, Ashcroft,” Ayre said. “With construction now underway, formal sales have commenced and display homes are expected to be available on site by the middle of 2026. The first residents of Ashcroft are anticipated to move in during the second half of the year.”

Institutionalisation of the Sector

The opportunity to build Millbray into a sizeable portfolio of land lease communities aligns closely with the ongoing evolution of Australia’s maturing living sector. Macquarie Asset Management views this strategy as part of the broader market transformation that is occurring across the build-to-rent and student housing sectors.

“We believe Australia’s living sector is already driving strong risk-adjusted returns for institutional real estate investors. The land lease segment is underpinned by the same structural shortage of housing, while also benefiting from an income profile that appeals to stakeholders,” Ayre said.

While land lease is relatively unknown outside of Australia, the communities are rapidly gaining traction among the country’s expanding over-50s population, presenting substantial opportunities for market growth.

“The sector is highly consolidated and continues to remain undersupplied relative to demand, driven by the strong growth in the over-50s population and increasing awareness of the benefits of living in a land lease community,” said Ayre. “So we see a compelling opportunity for growth through the development and creation of new communities.”

Quality Communities for Top Tier Locations

With a development pipeline extending across Queensland and New South Wales, Millbray is committed to offering prospective residents a choice of locations in which to purchase a home and become part of a vibrant community.

“Millbray is selective in its approach to development, ensuring that each project is built in optimal locations and focused on developing high-quality communities where residents truly want to live,” said Ayre. “The Millbray management team leverages its extensive experience in developing land lease communities to inform its approach, with the goal of establishing best-in-class communities.”

As Australia accelerates efforts to expand its housing supply in response to an acute shortage, Millbray is strategically developing many of its projects within, or adjacent to, masterplanned communities. This approach is designed to enhance the land lease value proposition by integrating new developments with emerging communities.

“Millbray has consistently been successful in selecting sites that are integrated with masterplanned communities, as residential developers recognise the added diversity these projects bring to the housing mix,” said Ayre. “For Millbray’s residents, this strategy offers enhanced access to a wide range of community amenities and creates opportunities for multiple generations to live in the same community.”

More Projects on the Way 

With the Ashcroft project preparing to welcome its first residents this year, the Millbray team is proactively accelerating the expansion of its portfolio to meet growing market demand.

In addition to Ashcroft, Millbray has received development approval for a site in Highfields, in the Toowoomba region of western Brisbane, and is in the planning process for a development north of Queensland’s Sunshine Coast.

“Millbray has two near-term developments scheduled to commence construction this year, both of which are expected to come online within the next 12 months,” said Ayre. “So by the end of 2026, Millbray expects to be delivering homes in at least three communities across Queensland.”

As the platform advances towards its goal of a 5,000 home portfolio, Millbray is actively progressing additional projects for rollout in 2027. However, Millbray emphasises that its success will not be measured solely by scale.

“Millbray is firmly focused on delivering high-quality communities and diverse housing options for residents,” Ayre said. “By staying true to this mission, scale will be the result as much as the goal.”