Avari Capital Partners launches new fund to tap into alternative accommodation demand
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Photo by Mindaugas U
Avari Capital Partners has unveiled its latest venture, the Avari Alternative Accommodation Fund, as it seeks to capitalise on the burgeoning demand for innovative housing solutions in Australia. The fund’s launch coincides with Avari’s acquisition of a second asset in Busselton, Western Australia, as the firm strengthens its foothold in the rapidly expanding alternative accommodation sector.
The fund is strategically focused on land lease communities and alternative accommodation assets, targeting opportunities arising from Australia’s persistent housing undersupply, population growth, and a shift in demographics. The acquisition in Busselton follows Avari’s initial purchase in Cairns, highlighting the company’s commitment to regions experiencing significant population growth and housing demand.
Avari Capital Partners’ Chief Investment Officer, Ben Coughlin, articulated the firm’s strategic vision, stating, “Australia’s housing needs are evolving, but investment markets have been relatively slow to recognise where some of the most compelling long-term opportunities are emerging.” He emphasised the importance of land lease communities and alternative accommodation, noting, “We believe land lease communities and alternative accommodation are set to become an increasingly important part of Australia’s housing landscape.”
The fund’s strategy diverges from traditional residential property investments by focusing on owning and enhancing the underlying land. This approach aims to generate consistent rental income from residents and operators, while also seeking long-term capital growth driven by the growing demand for affordable, lifestyle-focused housing.
Coughlin further explained the sector’s potential, stating, “The sector sits at the intersection of several powerful structural trends, including population growth, housing supply constraints, demographic change, and growing demand for affordable lifestyle-focused living options.” He highlighted that while institutional capital is beginning to enter the sector, the most significant wave of institutionalisation is still on the horizon. “For investors, that presents a rare opportunity to access a growing asset class before it becomes more broadly recognised and competed for by larger pools of capital,” he added.
Australia’s housing market continues to grapple with supply challenges, as demand consistently outstrips the delivery of new housing stock. This, coupled with affordability pressures, an ageing population, and changing lifestyle preferences, is driving the need for housing solutions beyond traditional markets. Avari’s Alternative Accommodation Fund aims to leverage these long-term trends through a disciplined acquisition strategy focused on underutilised accommodation assets, caravan parks, and land lease communities.
The acquisition of the Busselton asset is a significant milestone for Avari’s strategy, offering investors exposure to a growing portfolio of assets poised to benefit from the increasing demand for alternative housing solutions across the nation. The region of Busselton, in particular, is witnessing strong population growth and housing demand, yet faces limited affordable accommodation supply, making it an attractive target for Avari’s fund.
Coughlin underscored the fund’s potential impact on the housing landscape, stating, “As governments, communities, and investors continue to search for solutions to Australia’s housing shortage, AVARI expects alternative accommodation and land lease communities to become an increasingly important component of the national housing landscape.”
The Avari Alternative Accommodation Fund is now open to eligible wholesale and sophisticated investors, offering them an opportunity to engage with a sector that is anticipated to play a crucial role in addressing Australia’s housing challenges. With Avari’s integrated property and capital expertise, the fund is well-positioned to apply the disciplined investment process that has been successfully employed across more than $1.4 billion in real estate investments and private credit transactions.
As the demand for alternative housing solutions continues to rise, Avari Capital Partners is poised to lead the charge in redefining Australia’s housing market, offering innovative solutions that align with the evolving needs of the population.