Brookfield ponders consortium to conclude Center Parcs sale
UK: Canadian private equity firm Brookfield, which owns Center Parcs, is believed to be trying to build a consortium from the remaining bidders to secure a sale of the holiday resort chain following a lengthy offer and negotiation process, according to The Financial Times.
The news comes just weeks after Brookfield’s final deadline to submit bids passed by without formal offers at the end of July.
Private equity firms Antin Infrastructure Partners and KSL Capital Partners [the latter acquired the parent company of the Pigs Hotels Group last year] and GIC [the Singaporean sovereign wealth fund] are believed to still be in the running to acquire Center Parcs after the likes of CVC Capital Partners [which already owns Away Resorts after a £250 million acquisition two years ago], Blackstone and specialist real estate investment firm Aermont left the bidding process earlier this year. However, none of the firms has yet submitted an official offer, leaving Brookfield to consider alternatives.
Center Parcs was put up for sale by Brookfield in May for a figure between £4 billion and £5 billion, more than double the £2.4 billion it paid for the chain eight years ago.
A prospective sale would be a significant endorsement of the future of the UK’s domestic holiday sector, despite the challenging economic environment and a surge in interest rates in the buying market, although The Financial Times has reported that the bidding companies’ concerns revolve around the amount of potential growth that is left in the business.
Center Parcs, though, continues to attract more than two million guests each year across its six existing holiday villages in the UK & Ireland and reported 97.1 per cent occupancy rates on average for the financial year leading up to April. The company, which was founded in the Netherlands in 1968, also reported a record year of trading with revenue surging by 18 per cent.
The chain’s current UK sites include: Sherwood Forest in Nottinghamshire; Whinfell Forest in the Lake District; Longleat Forest in Wiltshire; Elveden Forest in Suffolk; and Woburn Forest in Bedfordshire [the most recent site to open in the UK in 2014]. It is also searching for a site in South East England where it could construct a sixth UK holiday village, after plans were scrapped to build a new 900-lodge holiday village near Crawley in West Sussex in February as the location was deemed to not be “suitable” for the development, due to not being able to meet biodiversity targets.
Sources close to Brookfield have reportedly said that the sales process, known as ‘Project Redwood’, could even be concluded as soon as in the coming weeks. Barclays, Bank of America and Eastdil Secured are currently advising the private equity firm.
If a consortium does not materialise, Brookfield may still choose to offload a minority stake in the business to a single bidder or retain it without a sale, according to a person familiar with the matter.
