New Wave of Capital Washes Over Evolving Surf Park Sector

No surfer had ever paid for a wave in Australia until the summer of 2020. Going on six years later, hundreds of thousands of annual visitors to its two operating surf parks are forking out up to $100 or more to ride perfect man-made waves barreling across landlocked urban landscapes. In a country renowned for its world-class surfing beaches, that’s a compelling proof of concept. And with the construction of a third surf park on the not-so-distant horizon it’s no longer only surfers who know the feeling—institutional capital is dropping in on the action. Solid revenue, significant land value increases, an exponential growth curve and rising tide of recognition of untapped upside for integrated urban development have aligned to signal an emerging real estate asset class with deep potential well beyond its initial novelty appeal. In a landmark deal, global surf park developer Aventuur has secured what is touted to be the first institutional-grade capital investment in a surf park development in Australia. The breakthrough capital injection from the Royal Automobile Club of Western Australia marks a turning point for the sector as its evolutionary wave rolls on. Speaking to The Urban Developer , Aventuur chair and chief development officer Andrew Ross was remaining tight-lipped on how much the RAC is tipping into the company’s $120-million Perth Surf Park development, only describing it as “a large investment”. ▲ RAC Group chief executive Rob Slocombe and Aventuur chair Andrew Ross. “To give you a sense of it … what we can say is that the project is not particularly heavily geared,” he says. As well, he says, further investment has been secured from existing project partner, the WA-based family-owned investment firm Wyllie Group, while Aventuur is also in “detailed conversations with some big four banks” to provide construction finance. “That’ll be another first for a surf park development.” Ross—a former lawyer and investment banker—says the RAC has a long history of supporting tourism ventures in WA and its investment heralds a growing acceptance of the nascent surf park industry from the big end of town, validating it as a bankable asset class. “Institutional capital requires confidence in the product, the teams, and the market. We’ve been incredibly consistent and diligent in demonstrating the viability of these developments. “So this is a massive leap forward, a huge milestone not just for our business but for the industry as a whole.” And as the founder of Australia’s pioneering surf park development company Urbnsurf he would know. Certainly, it’s a giant step up from the early capital raising days for what Ross calls Australia’s “first church to surfing”—Urbnsurf Melbourne. But even with unproven prototype technology and without any real business model wrapped around it, the pipe dream eventually became a reality . It was built on a 5.4ha site owned by Melbourne Airport at Tullamarine with capital from family offices and high-net-worth investors, many of whom also backed Urbnsurf’s second wave pool project on a 3.6ha site at Sydney’s Olympic Park. Since opening in January of 2020, Urbnsurf Melbourne has generated more than 10 million waves and—even with temporary closures during the Covid pandemic—has so far welcomed 300,000-plus visitors. Meanwhile, Urbnsurf Sydney has had more than 100,000 visitors through its gates and delivered 150,000-plus surf sessions in the first year since its waves started pumping and the gates swung open in May of 2024. Drawing on the experience of delivering the two parks in the eastern states, in more recent times Ross has been spearheading plans on the other side of the country for the Perth Surf Park, which is US-based Aventuur’s first foray into Australia. It is the first major tourism attraction to be delivered in Perth in over 25 years and currently the single largest private investment in tourism infrastructure in the state. To be built on a 5.8ha site owned by the WA government at Jandakot in Perth’s southern suburbs, it will feature the southern hemisphere’s largest surfing lagoon development, The man-made lagoon spanning 2.2ha—about the size of Perth’s Optus Stadium—will use Wavegarden Cove technology developed in Spain that can provide 30 wave types up to 2m high and produce up to 1000 waves an hour. Construction is scheduled to begin in coming months. The first waves are expected to be peeling across the lagoon by mid-2027 and the gates open to the public later the same year. “We’ve been held up a little bit longer than we would have liked through some approval processes,” Ross says. “They’re difficult projects to get away. They’re quite complicated. It’s a new form of development. You’ve got to navigate planning pathways and regulatory pathways … you need to have a fair degree of stamina. “So we’re absolutely delighted to finally be getting under way.” Significantly, the Perth project exemplifies the evolving model of surf park developments. Rather than just standalone, turnstile recreational facilities, they are now being conceived as catalysts for broader mixed-use precincts. Aventuur’s development in the West will feature retail outlets, a restaurant and bar, function spaces, a wellness centre, beach club as well as glamping-style accommodation. Its approval also includes plans for a 56-key hotel in a future phase of the project and the company also holds an option to purchase the freehold to the site. ▲ Rendering of the Perth surf park due to begin construction this year. “What we’ve looked to do is get the park up and trading and see how it performs,” he says. Of course, the numbers have been crunched and it is estimated the park will welcome up to a million guests a year. “Then it’s likely we’d exercise that option to purchase the freehold at the same time as making a commitment for phase two, which would include the hotel.” Ross says there is a silver lining to the development’s delays in that it will benefit from the improvements in wave technology that have occurred, making it one of the most advanced surf parks in the world. But there also has been a realisation of the full potential of the asset class. “To be honest, I think a lot of the improvements are really in understanding how the lagoon, the surfing experience, can better interact and integrate with the utilities and amenities that you offer around the lagoon,” he says. “So it’s about broadening the experience … when we built Melbourne, we only had enough budget to put in the lagoon and a few basic amenities, and it was almost like ‘build it and see if they’ll come’ given that no surfer had ever paid for a wave in Australia at that point. “And so now that we’ve demonstrated the model, and we can see that people are prepared to pay for this type of experience, it’s allowed us to then go deeper and invest more in the adjacent amenity.” Ross says a glimpse of the ride ahead for the burgeoning surf park asset class and its integrated development model is Aventuur’s New Zealand project at Dairy Flat, north of Auckland. Designed as a sustainable surfing community, it will include 500 housing lots, a solar farm, a data centre from which waste heat will be used to warm the surf lagoon, eco-cabins and a town centre—all clustered around the surf park. “It’s incredible and it really shows where the thinking has now got to, combining some of these different asset classes and seeing where they can get some synergies,” he says. “And while we have a few different business models we’re pursuing, that’s the one that’s really exciting for us at the moment … the more integrated approach, where you’re using the placemaking destination or power of the surf park to act as a catalyst for further development around the surfing experience.” ▲ Rendering of the Palm Valley surf park planned for the Gold Coast. Luke Altschwager, the golf pro-turned-property developer behind the Palm Valley surf park and golf resort project— one of the biggest tourism developments on the Gold Coast since the creation of the theme parks Sea World and Dreamworld—agrees. “We’re not just building a surf park, we’re trying to create a complete community experience,” he says. “And so that’s where we feel we’ve really measured this differently and other parks have slightly missed. We’re not just building this for surfers.” The masterplan for Palm Valley—a redevelopment of a 6.2ha portion of the 56ha Parkwood Village precinct in the city’s northern suburbs—was approved in December of 2023. Altschwager says he has spent the past couple of years reworking it, refining the build strategy and undertaking extensive value engineering to manage financial risks. “Our biggest challenge was, how do we stage this?” he says. “It’s a beautiful design and the architects did a great job, but the way it was designed we had to build it in one-line and it was just not financial to do that.” The original nine towers, rising up to eight storeys, have been cut to five, while the project’s overall residential yield—with 176 apartments and 58 two-storey beach homes and villas—has been maintained along with 12,000sq m of mixed-use commercial space. Its centrepiece is a 4ha dual-zone surfing lagoon powered with German-developed technology by Endless Wave that will sit alongside an existing 18-hole golf course. “It’s a massive pool—240m long,” Altschwager says. “The overall beach is a par four, 311m from end-to-end.” ▲ Three-time world champion Mick Fanning is an ambassador for the Gold Coast project. With construction cost escalations—including about $30 million more for the surf lagoon alone—he says the total project value is now estimated to be “pushing $400 million … but the numbers still stack”. Palm Valley is forecast to cater for about 217,000 surf sessions a year and attract more than 800,000 visitors to the leisure-anchored precinct. Now in the final stages of securing capital partners—both debt and equity—shovels are slated to hit the dirt for initial works early next year with completion expected in mid-2028. “You don’t very often get a chance to be at the absolute start of an industry,” Altschwager says. “So we want it to be a world-class premium luxe experience.” The involvement of three-time world champion surfer Mick Fanning, not just as an ambassador but an investor, underscores the project’s credibility. Altschwager concedes he wasn’t a boardrider before diving into the unknown depths of surf park development but now declares himself an “absolute mad surfer”. “I’m rubbish at it but it’s an incredible lfestyle and I really do enjoy getting in the water,” he says. Just as well, according to Aventuur’s Andrew Ross, who believes to create an authentic experience: “The parks need to be owned and operated by people with salt in their veins who understand what it means to deliver a great surfing experience.” At last count, there were just 21 commercial surf parks around the world, most of them following the turnstile model but also a few pursuing the private member model. “All the parks are making money,” Ross says. “Some are probably making better margins than others, and that’s a function of how much they spent in capex, but also how well they’re run, how successful they are in engaging with urban communities and getting people along to support them.” He predicts that “every large city with a temperate climate will probably have a surf park in the next 10 to 15 years”. ▲ WA pro surfer Jack Robinson. To create an authentic experience, parks need to be owned and operated by people with salt in their veins, Ross says. Latest figures would indicate he is right, with the surf park industry experiencing significant growth of 130 per cent year-on-year increase in development. However, financial challenges persist. “The thing we suffer from here in Australia is a relatively shallow capital pool which provides you with the resource to unlock these projects,” Ross says. “That’s probably the thing that’s been holding it back the most.” But that’s not stopping Aventuur, which has a penchant for new opportunities within Australia with its gaze now firmly focused to the east with a view to “getting something under way in the next year or so”. “With these new types of development, you want to try and reach escape velocity,” Ross says, borrowing some rocket science terminology relating to the minimum speed required to overcome gravity and launch into space. In the more earthly realm of surf park development, he is referring to a critical point where capital markets, high-quality developers and market understanding converge. “And I think the last bit of it, which hasn’t really been achieved just yet, is successful exits from these assets, so that we know what they ’ ll trade for on the back end as well,” Ross says. “Once there has been a couple of exits from existing surf park developments, then I think that completes the loop, and everyone will have a really good sense of how to evaluate this asset class. “We’re getting there,” he says. “I don’t think we’re there just yet but I do think there is going to be this moment coming in the next few years where we achieve that escape velocity.” Altschwager adds: “It’s all coming slower than everyone thought but it’s also at the scale, maybe bigger than everyone thought”.

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