Land Lease Communities (LLC) Sector v COVID-19

As has been widely reported, the COVID-19 global pandemic has had a significant impact upon the local economy – including the property industry. Specific to the LLC sector, during the early weeks of the pandemic, significant uncertainty spooked purchasers and threatened to de-rail transactions. As the dust settled through May, transactions proceeded – some at levels higher to ‘pre-COVID-19’.

The LLC sector, with cashflows largely underpinned by superannuation holdings and/or Government subsidies (in the form of rental assistance to pensioners), has proven its strength through this period of uncertainty. Cashflows were, and will remain, for the most part, unaffected, with the only downside risk comprising a potential softening of home re-sale commissions and lower rental indexation over the short term.

In our view, the LLC sector has fared far better than most asset classes through these uncertain times and will continue to attract interest from investors of more traditional property sectors.

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