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Golf Course Development
Pages In This Document
General
With new course construction expanding at its slowest rate for 13 years, the major source of capacity growth has been course extensions.
According to the Golf Research Group (GRG) in 1999 57% of all golf course development was in the form of extensions to existing courses. There are 2.4 million golfers who on average fall in the 25-54 age bracket.
78% golfers are members of courses and 63% play throughout the year. Increased leisure time and activity holidays have led to a greater demand for golfing facilities. The type of facility required can vary from an 18-hole course, a 9-hole course, a par-three course, driving range, pitch and putt, or all of these combined in a full golf centre complete with club house and other leisure facilities.
Several development options exist:
- 1. Sale of land with planning permission.
- 2. Lease of land to a developer or operator.
- 3. Formation of a joint company with a developer.
- 4. Develop the land and then lease to an operator.
- 5. Land can be developed and operated in hand.
The most practical of these for a farmer are probably 1, 2 and 3.
Please remember that special consideration must be given to the VAT aspects of diversification as the new activity may not be treated the same as the existing farm business from a VAT standpoint.
Market
Physical Requirements
Land area: 18-hole course 90-150 acres, 9-hole course 50-70 acres, driving range 10 acres, 9-hole par-3 10-15 acres, pitch and putt 4 acres, full golf centre 175 acres.
Site conditions: Must be well-drained with natural contours and features, 10% slopes are regarded as the maximum cross or uphill gradient on any length, but a flat site will not be favoured either. The site should be sheltered and not exposed to snow or fog.
Buildings: Equipment storage or club room facilities.
Costs
The following costing information is general and current prices should be sought for budgeting purposes.
Capital Costs
In the boom time of the early nineties courses were being built for around £4 million including clubhouse and land.
However, in order to make a course economically viable, total development cost should not exceed £2 million.
A farmer may be able to develop a 18-hole course for £300 - £500,000+; 9-hole course £200,000+; 9-hole par-3 £100,000+; 9-hole pitch and putt £50,000+; driving range (covered) £120,000; club house >£450,000; full golf centre >£1.3 million.
Running Costs
Returns
Percentage return on capital is likely to be low, so it is unlikely that this sort of venture will support substantial borrowings and even with development of a `centre' returns may be low.
There may be potential for `related' developments, ie building for residential or light industrial purposes, but local authorities may not be helpful. The average mid-week green fee in the UK is about £20 with memberships typically being £400 for a joining fee and £380 for an annual subscription.
An average 18 hole course will have 31,929 rounds played on it.
Constraints
Training
Current PGA Golf Management Publications are: The Driving Range Design Guide, Golf Course Safety Design Guide, Golf Course Ecology Treated Water Warm Season Turf Grasses Green Keepers facilities Grass Nursery Construction Water testing Committed to Green.
Booklet to help golf clubs think about the environmental aspects of their course. SAC Aberdeen run a greenkeeping course. For a link to training courses on offer by Sports Turf Research Institute
Grants
Through the Scottish Rural Development Programme (SRDP) 2007-2013 funding is now available for rural businesses throughout Scotland for diversification and renewable energy projects. Specifically, support is delivered through Rural Development Contracts – Rural Priorities which was launched in April 2008. For further information about what support is available see the Section on Rural Development Contracts – Rural Priorities.
Further Information
Publications
For links to a variety of publications by STRI please click here