MA Financial acquires Balmain’s d’Albora Marina portfolio for $225m

MA Financial acquires Balmain’s d’Albora Marina portfolio for $225m

Rushcutters Bay, the flagship asset of the d'Albora Marinas portfolio   

Listed alternative asset manager MA Financial (ASX: MAF) has taken a dive into the buoyant marine sector with the $225 million acquisition of Sydney-based Balmain Corporation’s d’Albora Marina portfolio.

The d’Albora Marina assets, comprising 10 properties in Queensland, NSW and Victoria, will seed a new investment vehicle to be known as the MA Marina Fund, indicating that MA Financial plans to grow its investment in the sector.

Balmain acquired the bulk of the d'Albora portfolio, the largest marina group in Australia, from Dreamworld owner Ardent Leisure Group (ASX: ALG) in 2016 for $126 million.

The D’Albora portfolio at the time included the Rushcutters Bay, The Spit and Cabarita Point marinas in Sydney Harbour, as well as two marinas adjacent to Melbourne's CBD and two north of Sydney at Nelson Bay and Akuna Bay.

However, Balmain rolled three of its existing marina assets into the d’Albora stable – each of them acquired following a troubled history.

Among these was Martha Cove on the Mornington Peninsula, which Balmain acquired in partnership with Goldman Sachs in 2015. The asset was a remnant of the collapse of former Gold Coast property financier City Pacific in 2009.

The two Queensland assets in the portfolio include Horizon Shores on the Gold Coast, which went into receivership in 2011 and was held for some time by the Balmain-Goldman Sachs partnership, and the Port of Airlie development in the Whitsundays which went into administration in the same year as part of the Meridien Group collapse. 

Some of the assets are believed to be in need of capital investment, particularly the Queensland properties.

While there are no immediate plans for upgrades to these marinas, MA Financial tells Business News Australia that the d’Albora portfolio ‘contains numerous value-add investment opportunities’.

The 10 marinas in the d’Albora portfolio can accommodate more than 2,700 boats, supported by ancillary marine services and tourism businesses on site.

The proposed MA Marina Fund is a closed-ended fund that MA Financial expects will attract ‘significant investor interest from domestic and international markets seeking exposure to defensive, cash-generative assets largely uncorrelated to other asset classes’. 

Balmain is not keen to entirely let go of its interest in the d'Albora marinas and will be a cornerstone investor in the fund by holding a 30 per cent stake.

MA Financial has $7.8 billion in assets under management with interests in real estate, credit, hospitality, private equity and venture capital.

Joint CEO Julian Biggins describes the investment in d’Albora Marinas as a unique opportunity in the alternative asset space.

“We see a clear investment opportunity for our clients in this asset class,” Biggins says.

“Marinas have characteristics and benefits that set them apart from traditional real estate investments. They are defensive, cash-generative businesses with approximately 90 per cent of revenues relating to boat storage, property rental and boat maintenance which are of a recurring nature.”  

The Australian marine industry was among the most resilient during the pandemic, with boat sales surging amid international border closures.

The Aurelius Marina Research Report released last year revealed that average marina occupancy grew from 84 per cent to 86 per cent over the two years to 2021, with waiting lists for berths recorded in more than half of Australia’s marinas.

Biggins says the resilient earnings profile of the sector was among the key reasons for MA Financial’s decision to dip its toe into the industry.

“Throughout economic cycles marinas have proven resilient, and the core d’Albora portfolio delivered strong earnings during the global financial crisis and the COVID-19 pandemic. 

“The fundamentals and outlook for Australia’s marina market is extremely positive. The number of boat registrations on the east coast continue to grow, particularly among larger boats, outpacing the supply of new marina berths.”

Biggins highlights the constraints facing new marina developments, including a strict regulatory environment and lack of suitable sites.

“It’s clear that this supply-demand dynamic will continue to drive strong revenue and earnings for marina operators,” he says.

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