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
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