Center Parcs’ UK and Irish business is being put up for sale with a price tag of up to £5bn – double the amount it was bought for in 2015 – as its private equity owners seek to cash in on the trend for domestic breaks kickstarted by the Covid pandemic.
The potential sale comes after the group – whose five resorts in the UK and one in Ireland are known for their tropical-themed indoor pools, spas and activities for kids and their sometimes eye-watering fees – bounced back to a profit after being forced to close outlets under pandemic restrictions.
Sales more than quadrupled to £503m in the year to 21 April 2022, helping lift profits to £66m, from a loss of a £157m the prior year as visitors sought out holidays close to home amid ongoing global travel disruption. The group had hoped to build a new site in Worth Forest, West Sussex, but pulled out earlier this year after an outcry from wildlife campaigners.
A potential sale comes as private equity haspiled into the UK’s domestic holiday market amid hopes for growth prompted by the fall in the value of the pound, the cost of living crisis, environmental concerns and more interest in outdoor pursuits after a shift among Britons towards breaks in the UK prompted by pandemic travel restrictions.
Bourne Leisure, which includes caravan park operator Haven Holidays, was bought by the private equity group Blackstone for about £3bn in January 2021. That same year CVC Capital Partners bought the holiday park operator Away Resorts for £250m and then bought up Aria Resorts and Coppergreen Leisure to combine with it.
Advisers to Brookfield Property Partners have been sounding out potential buyers for Center Parcs over the past week, according to the Financial Times which first reported the sale move, with possible suitors expected to include other private equity firms.
Center Parcs has been operating in the UK since 1987 when it opened in Sherwood Forest in Nottinghamshire, followed by a site in Elveden Forest in Suffolk in 1989.
However, the group’s roots go back to 1967 when a Dutch businessman, Piet Derksen, opened a holiday village at De Lommerbergen, called Sporthuis Centrum – with accommodation in the form of tents.
The business gradually shifted from canvas to lodges and was renamed Center Parcs before the UK arm was split off from the European division in 2001. Center Parcs continues to operate in Germany, the Netherlands, France and Belgium under separate ownership.
If Brookfield achieves the hoped-for price it would book a substantial profit after it acquired Center Parcs’s UK-centred arm from Blackstone for about £2.4bn in 2015.
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However, property-based transactions have since been hit by fears about rising interest rates and the general economic outlook.
Center Parcs got into hot water last autumn when it announced it would close its UK sites for 24 hours to mark the Queen’s funeral and any guests in the middle of stays would have to vacate the resorts overnight.
It quickly backtracked, issuing a statement saying it had “reviewed our position regarding the very small number of guests who are not due to depart … we will be allowing them to stay on our villages rather than having to leave and return”.