Golf Course Investment: A Thriving Opportunity in Asia and USA

Golf Course Investment: A Promising Opportunity in Asia and the USA

In a world where outdoor activities are gning popularity post-pandemic, golf is witnessing a resurgence that transcs its traditional image as an elite pursuit. This growth trajectory is particularly noticeable across two continents - Asia and the United States - where diverse demographics, increasing middle-income populations, significant expatriate and tourist visitation, and heightened visibility of professional tours like LIV Golf are fueling this renssance.

According to Statista forecasts, the global golf equipment market is expected to grow at a Compound Annual Growth Rate CAGR of 5.85 between 2024 and 2028. Despite Japan's declining participation rates due to demographic shifts, it remns among the world's largest markets for golf, second only to the USA in terms of involvement. Over the past decade, China has seen its number of golf courses triple, while participation rates for both women in countries like South Korea and China are witnessing remarkable growth.

The Golf Around the World 2021 report by The RA highlights that supply-demand dynamics favor golf development in Asia and the Middle East compared to wealthier regions. As per capita incomes rise, so does demand for golf activities, creating an advantageous landscape for investors.

In Asia, while traditional perceptions might pnt golf courses as unprofitable amenities rather than investment opportunities, there is a shift towards this perception as fundamentals improve. The cost of entering the market through underperforming courses is significantly lower than new developments, which can range from US$500k to over US$1 million per hole for international standards. This presents strategic entry points for investors looking into existing and potentially reinvigorated golf course assets.

Turning our focus to the United States, golf’s popularity isn't just a fleeting tr; it's experiencing robust growth year-on-year. The National Golf Foundation NGF reported that in 2021 alone, over 3.2 million new golfers tried the sport for the first time. Notably, there's growing interest among those aged 28 to 44 years old, a tr expected to continue as this demographic ages and enjoys more leisure time.

By early 2023, it was evident that profitable courses from 2021 mntned or increased their profitability into the subsequent year with consistent growth in golf rounds. Moreover, the impact of new golf entertnment assets like Top Golf and Drive Shack on participation rates is becoming increasingly significant. These venues are serving as a gateway for new players to the sport while offering programs tlored to less experienced golfers that maximize underutilized course opportunities.

This synergy between traditional golf and emerging golf entertnment concepts creates an asset class characterized by stability and a future of continued success, which contrasts with higher-risk expectations historically associated with investing in golf courses. The US market offers investors a landscape where there's little room for new development due to land scarcity near major metro areas that can't be repurposed elsewhere and the abundance of remote destination resorts already catering to the sport.

The golf industry is poised on solid ground, fueled by its expanding global appeal and efforts towards sustnability and inclusivity. The combination of growing investments in infrastructure, evolving consumer preferences, and the sport's inherent charm makes this a promising time for those considering entry into the golf course investment market.

For further insights or to discuss opportunities:

Keith Cubba

Senior Vice President National Director - Golf Group, Colliers

Eml: [email protected]

Govinda Singh

Executive Director Asia, Hotels Leisure Real Estate Advisory, Colliers

Eml: [email protected]

Sophia Kim

Associate Director Hotels Leisure, Colliers

Eml: [email protected]

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