MARINA MANAGEMENT & INVESTMENT

Brett

Bolton

Optimising an asset

class property

If managed correctly, marinas can be a sound investment. Brett Bolton of

Coriolis Marine gives pointers on what to look for when buying, operating or

preparing to sell.

Surely, running a marina can’t be that

much different to running a pie shop,

hotel or car park? Although I wouldn’t

try to guess what challenges are

involved in those businesses, I do know

that I would never look at any marina

and assume I know everything there

is to know about that business or the

market it attracts.

Marinas are quite a unique asset

class as they are typically operated on

government land or seabed, have strict

permitted use zoning requirements,

sit in an aggressive environment and

have many business facets. These

may include wet berths, dry storage,

haul-out and service, retail and marine

tenancies, hotels, and food and

beverage offerings. Each of these

elements is a business in its own right

and requires different techniques and

approaches if all the opportunities are

to be maximised. The most successful

marinas are usually those that can tie

all the elements together to coexist and

enhance each other.

If you are lucky enough to operate

a freehold marina, you are off to a

great start as the number one risk in

your business – tenure - is eliminated.

Having mostly operated marinas

through a head lease on government

land, I know first-hand how this

issue can continually jeopardise your

business through rent reviews, end of

lease renewal or change in government

policy. Without certainty around tenure

and rent payments, it is difficult to

hold property

valuations,

obtain funding and reinvest in the

property. From an investor’s point

of view, investing in a commercial or

residential development on freehold

land is a much easier and lower risk

proposition than owning and operating

a leasehold marina.

In simple terms, building

developments have a lot more

known factors, fewer community and

environmental objections, and you

can cash in on your investment in a

reasonably short timeframe. Marinas

are typically longer holds as making

changes through the government

approval frameworks and building

up the business can take time. Why

bother owning a marina I hear you ask?

Barriers to entry is one answer. Once

you have one, you will typically have a

sound income that can’t be threatened

by a competitor popping up next

door without notice. New greenfield

marinas in established populated

areas are becoming more and more

difficult to get off the ground as any

vacant waterside land is being quickly

rezoned to residential as governments

or private owners cash in on residential

developments. And one thing that

also often gets missed in the blinding

headlights of the dollar signs, is that

smart planning principles that activate

the waterfront for public use such as

marinas, deliver great community

outcomes and can greatly enhance the

unimproved or improved land values.

Facilities such

as Scarborough

Marina (above),

one of Brisbane’s

premier boating

hubs, benefit from

sound management.

Right: good and

not so good? Well

presented docks

make for happier

customers and give

a better impression

if you are trying to

sell the marina.

www.marinaworld.com - November/December 2018 47