Brookfield has put UK holiday resort Center Parcs up for sale, in a deal that will test investors’ willingness to bet on an economy hit by high inflation and rising interest rates.
The Canadian private equity group is seeking between £4 and £5 billion for Center Parcs, according to sources familiar with the matter, after looking into an exit from the investment in recent months.
The decision to go ahead with the sale marks a bold move for Brookfield as the UK grapples with falling property values and rising interest rates. But a sale could potentially yield a windfall for Brookfield, which acquired the resort Blackstone group for around £2.4 billion in 2015.
Brookfield he named investment bankers who sounded out for potential buyers last week, the people said.
Brookfield e Center Parcs declined to comment.
Center Parcs operates six holiday parks in the UK and Ireland, offering attractions such as water parks and forest playgrounds. Center Parcs’ five UK sites were independently valued at £4.1bn in April, based on property value alone.
The business is seen as relatively resilient to the UK’s economic downturn as more travelers are choosing domestic destinations instead of overseas holidays in leaner times.
The potential sale also underscores the resilience of the tourism and hospitality businesses, which have been favored by investors in recent months following a robust recovery from the Covid-19 pandemic.
According to real estate consultants Cushman & Wakefield, in the first quarter the volume of hotel transactions carried out in Europe rose to 4.3 billion euros. It was one of the few real estate sectors to see higher volume than in the same months for 2022, as deals across the real estate sector slumped.
Brookfield has invested in Center Parcs since the takeover, spending £100m on technology upgrades alone. The company hosts more than 2 million guests annually with 98 percent occupancy, according to Brookfield.
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