UK: Canadian private equity firm Brookfield has scrapped plans to sell holiday village chain Center Parcs in a £4 billion-plus transaction due to high interest rates and inflation.
In news first reported by React News, it is understood that the potential deal would have involved the sale of Center Parcs’ six holiday villages across the UK and Ireland, including the following sites: Sherwood Forest in Nottinghamshire; Whinfell Forest in the Lake District; Longleat Forest in Wiltshire; Elveden Forest in Suffolk; Woburn Forest in Bedfordshire; and Longford Forest in Ireland.
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.
However, the private equity firm was unable to find a buyer when no formal bids were declared by a deadline at the end of July, leading Brookfield to consider a consortium of reported remaining bidders such as Antin Infrastructure Partners, KSL Capital Partners [which acquired the parent company of the Pigs Hotels Group last year] and GIC [the Singaporean sovereign wealth fund]. CVC Capital Partners [which already owns Away Resorts after a £250 million acquisition two years ago], Blackstone and specialist real estate investment firm Aermont had already left the bidding process earlier in the year.
Brookfield bought Center Parcs eight years ago from Blackstone for £2.4 billion.
The breakdown of the sale process, known as ‘Project Redwood’, reflects the current uncertainty in the market with potential buyers being put off by the high price quoted by Brookfield and being hesitant to commit to larger, riskier transactions. Sources close to the matter reportedly believe Brookfield could still either refinance Center Parcs, offload a minority stake in the business, or retain it for some more years before pursuing another sale when the landscape is more certain.
Despite the uncertainty in the market, the chain has continued to attract more than two million guests on average each year across its six holiday villages in the UK and Ireland and reported 97.1 per cent occupancy rates 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.
Meanwhile last month, TwentyTwo Real Estate, an independent investor-operator with an estimated €4.8 billion of assets under management in Europe, purchased Center Parcs Allgäu from Center Parcs Europe for an undisclosed sum. Center Parcs UK and Center Parcs Europe are now run by separate companies while sharing the same brand.