Please select your home edition
Edition
Zhik ZKG

Marina Berths still proving investment potential

by Jeni Bone on 1 Feb 2011
Empire Marinas Bobbin Head took out Marina of the Year 2009. MIAA
In tempestuous economic seas, marina berths have proven their worth as a popular investment option with boaties and those less inclined to boat but are astute investors.

'The demand for berths is up and there just aren’t enough available,' explains Peter Hobbs, Sales and Marketing Director of Meridien Marinas –Australia’s largest marina developer, owner and operator with marinas located in Port Douglas, Airlie Beach, the Gold Coast and Sydney.

'Marina berths are already in short supply and the reality for boat owners is they need to decide not only what type of boat they want, but where to moor it.'

While many real estate and stock market investments have run aground during the global financial crisis, the marina market has performed against the tide by posting strong capital growth, high occupancy rates and rental returns.
The growth in demand for marina berths outweighs supply and the gap is growing, placing investors who act swiftly in an advantageous position.

'Marina berths are a popular investment option due to strong rental income and low vacancy rates with rents increasing by over 5% per annum,' adds Hobbs.

According to National Property Research with minimal new marina supply entering the market across the eastern seaboard, the end result will be that supply remains constrained whilst demand continues to increase.

Aiding in the diminishing number of marina berths is the severe restrictions by the Environmental Protection Agency for developing marinas. The Queensland Environmental Protection Agency has very stringent environmental policies in place which govern the future developments of marinas an recently has rejected a number of applications for new marinas, which creates scarcity in the market.



In NSW, a statewide Boat Ownership and Storage report published last year by NSW Maritime illustrates growth forecasts up to 2026.

Neil Patchett says the report aims to help organisations in NSW plan for increased growth in the recreational boating sector. 'The information is valuable for industry, Councils, stakeholders, the private sector, developers. It shows participation figures are on the rise, and that there will be challenges of storage on land or afloat to meet them.'

The report uses two methods to forecast growth. The first is linear projection and estimates the number of recreational boats each year up to 2026 based on the average compounded annual growth rate (2.9%) experienced across the State in the period 1999–2009. This projection method estimates that in 2026 the number of registered boats in NSW will have grown to 351,113.

The second method is based on the proportion of the population who are boat owners and population forecasts to 2026 from the Australian Bureau of Statistics (ABS). Using that method, it is estimated there will be 334,470 recreational boats registered in NSW in 2026.

'Either way, NSW faces a significant boat storage challenge, and there is room for optimism in the boat storage sector of industry,' says Patchett, referring to opportunities for development.

Darren Vaux Chairman of Boating Industries Alliance and Director at Empire Marinas, Bobbin Head - Marina of the Year in 2009 – oversaw the facility’s massive, multi-million dollar redevelopment in 2008. It now boasts 200 deepwater berths, 10 moorings, large hardstand, 50 tonne travel lift, full on-site trade services, water, gas, fuel, provisions and café in the unique National Park environment of Ku-ring-gai Chase, 24kms north of Sydney.

As Vaux recounts: 'We then proceeded with the first release of marina berths on 25-year lease terms, just 20 of them, and oriented toward the boat owner rather than investors. We wanted them to be attractive to people who want to secure their long term location within a National Park.'

Two years on, there are only two remaining – a 20m berth for $475,000, and 25m berth at $800,000. The terms are 25-year leases, renewable subject to approval by National Parks.

'From the boat owner’s point of view, they are securing their own future, considering the chronic lack of supply especially in Sydney where there is a limit to potential development. Investing in marina berths goes some way to quarantining yourself to these market forces, and you can choose sell at a time that will deliver capital gain.'
Vaux continues: 'In Broken Bay specifically, 155 to 344 boats will be looking for on-water storage every year for the next 15 years, and net supply is zero. It’s a real issue. If you’re in the boat storage business, that is a good thing. But these are barriers to getting in to boating.

In Qld, stats from Queensland Transport state there were 780,000 boat registrations in Australia as at 31 January 2010, of which Queensland makes up 30% with 233,862 registrations.

Queensland’s boat ownership is growing at 2% per annum (Queensland Transport 2010), indicating the Sunshine State can rightly claim the title of boating capital of Australia, with one in 22 Queenslanders owning a boat.
Marine Queensland states that there could be at least eight more marinas in Queensland to cover the short of supply in marina berths.

'Owning a marina berth at any of Meridien Marinas 5-star, fully integrated marina villages represents an unrivalled investment opportunity, with huge potential for capital growth and significant rental income thanks to growing demand and limited supply, as well as significant tax benefits,' says Peter Hobbs from Meridien. 'Recent financial market volatility makes the case for property, including marina berths, even more compelling.'

Meridien Marinas has recently settled nearly $20 million in marina berth sales, with both investors and boat owners securing berths.

On the Gold Coast, Meridien Marinas Horizon Shores 12m Multi-hull berths saw rental growth of a record 21% as at February 2010 (Midwood Report: Wet Berth Analysis).

'The number of boaties in South-East Queensland has exploded and with the State Government’s legislation restricting the development of any further canal sub-divisions or marinas the pressure on the available supplies is just enormous,' says Meridien’s Peter Hobbs.

Meridien Marina’s Port of Airlie marina in Airlie Beach is one of the few new marinas in Queensland and took over 20 years to gain local, state and federal approvals.



'In our experience, some investors have purchased two or three berths in Meridien Marinas’ locations instead of securing a typical house or apartment as an investment property. One of the main motives has been the significant tax advantages associated with marina berths as 100% of the berth price can be amortised over 10 years.'

Meridien Marinas also offer a 7.68% NET guaranteed return for three years on marina berths purchased in the Port Douglas, Horizon Shores and Abel Point marinas. Berths are sold on a long-term leasing basis such as 10, 15 and 20 years.

upffront 660x82Wildwind 2016 660x82North Technology - Southern Spars

Related Articles

Dateline Rio - Sailing Olympics review - as good as it gets?
The Rio Sailing Olympics was widely judged to have been the best of recent times. The Rio Sailing Olympics was widely judged to have been the best of recent times. The weather was better than Weymouth and Qingdao, the courses more varied, but from a working media perspective, it was the people running the Rio regatta who really made the difference.
Posted on 26 Aug
Rio 2016 - Plain speaking by triple-medalist on Olympic sailing moves
Triple Olympic medalist, Santiago Lange has been on the sharp end of changes made to Olympic classes and formats Santiago Lange, a six-time Olympian and Bronze medallist in the 2004 and 2008 Olympics, won his third medal – Gold sailing in the Nacra 17 class. With that length of experience at an Olympic level, having sailed the Laser, Tornado and now Nacra 17 classes his comments on the future shape of the Olympic regatta was one of the highlights of the Medallists Media Conferences.
Posted on 25 Aug
An Q&A with Steve and Heidi Benjamin about the NYYC’s 2016 Queen’s Cup
Sail-World caught up with Steve and Heidi Benjamin to learn more about Heidi’s historic win in the NYYC’s Queen’s Cup. When it comes to U.S. Grand Prix sailing, it’s hard not to encounter the names of Steve and Heidi Benjamin. The two highly polished sailors have been successfully campaigning their series of yachts, named SPOOKIE, for years, starting first with a Carkeek 40 and progressing to their TP52. I caught up with Steve and Heidi to learn more about Heidi’s historic win in the NYYC’s Queen’s Cup
Posted on 19 Aug
Rio 2016 - Images of the penultimate race in the Finns - Scott wins
Sail-World's Richard Gladwell was on the water for the final race of the Qualifying Series of the Mens Finn Sail-World's Richard Gladwell was on the water for the final race of the Qualifying Series of the Mens Finn, in what potentially could have been Giles Scott's (GBR) Gold medal winning race. In the end, the current world champion won in style.
Posted on 15 Aug
Rio 2016 - Images from the Mens RS:X Medal Race
Sail-World's NZ Editor, Richard Gladwell, was on the water at the Medal Race for the RS:X class Sail-World's NZ Editor, Richard Gladwell, was on the water at the Medal Race for the RS:X class won before the race by Dorian van Rijsselberghe (NED) without needing points from the Medal Race. Nick Dempsey (GBR) was second on a similar basis.
Posted on 15 Aug
Rio 2016 - Sailors talk of Life at the Extreme on the Atlantic Ocean
Certainly the Volvo Ocean Race catchcry of Life at the Extreme is not a phrase associated with the Sailing Olympics. The 470 crews were suffering the mixed emotions of survival of an extreme test by nature, the cold, and for some elation at their placings, after Thursday's battle for survival. In conditions that looked more out of the Volvo Ocean Race, than an Olympic sailing regatta, crews battled 20kt plus winds and Atlantic Ocean rollers that towered up to four metres.
Posted on 13 Aug
Rio Olympics - Fourth gallery of images the fearsome Niteroi course
Fourth image gallery from racing on Day 4 in the Mens and Womens 470 class on the Niteroi course in the Atlantic Ocean Fourth image gallery from racing on Day 4 in the Mens and Womens 470 class on the Niteroi course in the Atlantic Ocean - sailing in 3-4 metre swells and 20kt plus winds. believe it or not the sea conditions were worse inshore as the fleet encountered the backwashed Atlantic rollers
Posted on 12 Aug
Rio 2016 - Third image gallery of 470's braving the Atlantic Ocean
Third image gallery from racing on Day 4 in the Mens and Womens 470 class on the Niteroi course in the Atlantic Ocean Third image gallery from racing on Day 4 in the Mens and Womens 470 class on the Niteroi course in the Atlantic Ocean - sailing in 3-4 metre swells and 20kt plus winds
Posted on 12 Aug
Gladwell's Line - The challenges of Guanbara Bay
The decision to run Medal Racing on the Pao de Acucer course, probably won't be remembered as one of the brightest The decision to run Medal Racing on the Pao de Acucer, probably won't be remembered as one of the brightest of the 2016 Sailing Olympics. Over shadowed by a 1300ft tall granite and quartz mountain in the shape of a sugarloaf, the bay suffers from dramatic windshifts, and huge variance in wind pressure.
Posted on 11 Aug
Rio 2016 - Fresher breezes expected inside and outside on Day 3
Stronger winds are expected for the third day of racing in the 2016 Olympic Sailing Regatta in Rio de Janeiro. Stronger winds are expected for the third day of racing in the 2016 Olympic Sailing Regatta in Rio de Janeiro. Two of the fleet scheduled to race outside on the Atlantic Ocean course off Copacabana Beach, while the 470 Men and Women will race inside on Guananara Bay.
Posted on 10 Aug