A body found in a holiday park has been identified as a South Australian grandfather as police investigate the alleged murder just days before Christmas.

Gary Hallam, 72, was found dead inside a cabin by another resident at the BIG4 Port Willunga Tourist Park on Tuit Rd about 2.15pm on Monday.

As the grim discovery was being made, a 49-year-old local man handed himself in at the police station.

He was arrested and seen with his hands tied in evidence bags as he was wheeled into an ambulance to be taken to hospital for an assessment.

“Police advise this was not a random incident and both men were known to each other,” SA Police said.

“No one else is being sought in relation to the death.”

7NEWS understands both the man and the victim were neighbours at the caravan park for some time.

Two crime scenes have been set up at the holiday park, one covering a group of dwellings, and the other around a caravan and a gopher, 7NEWS understands.

Residents have remembered Hallam as a friendly and well-liked member of the community, known for his smile and sense of humour.

Hallam was reportedly unwell for the past few years and was looking forward to spending whatever time he had left in the cabin he was building that was days away from completion.

The 49-year-old man did not apply for bail on a charge of murder and is set to return to court in April.

Investigations into the death are ongoing.