The Netherlands’ largest portfolio of holiday parks has been bought by a US private equity company in a deal signalling renewed investor confidence in the sector, at a time when domestic holidays and stay-cations are expected to surge strongly amid travel restrictions and safety concerns.
KKR, which has a taste for niche product including data centres and hostels, has just agreed to acquire Roompot Group from European private equity firm PAI Partners. Although financial terms were not disclosed, the business was said to be worth around €1 bn.
The deal – which encompasses more than 150 holiday parks in Denmark, the Netherlands, Germany, Belgium, France and Spain, from premium resorts to comfortable parks and campsites – is the second major transaction in the sector since last year, when German listed property firm Aroundtown Holdings is said to have paid €1 bn for a portfolio of Centerparcs in Central Europe. The seven assets operated by Pierre et Vacances were sold by US group Blackstone.
KKR had been looking for a platform to invest in the fragmented European holiday parks market for some time. ‘We see significant further growth potential based on a very strong development pipeline, continued expansion of Roompot's owned assets and new corporate partnerships,’ said Daan Knottenbelt, partner and head of the Benelux region at KKR.
Miguel Casas, head of Investment Properties, Continental Europe at CBRE believes that KKR’s deal ‘solidifies the attractiveness of this asset class’. ‘We are seeing a large flow of institutional money into holiday parks and other leisure operator real estate businesses,’ he commented.
Casas expects holiday parks to receive great interest throughout summer 2020, with appetite also likely to be fuelled by the expected increase in “stay-cations” over the next few months. ‘This is mainly due to a major part of the population across Europe remaining in lockdown mode for a few months, coupled with the fact that there will be less travelling outside of Europe from the target demand base of these hospitality assets,’ he noted.
The positive prospects for the sector contrast starkly with the rest of the hospitality industry, which is expected to experience a somewhat quiet summer with real recovery forecast to unfold only in autumn, according to the broker.
‘The UK holiday park sector is faring far better than other parts of the hospitality space,’ agrees Bobby McGhee, the newly appointed CEO of holiday park operator Aria Resorts, which owns 14 parks in the UK. Aria Resorts is owned by Angelo Gordon, a major US-based global alternative investment firm, which is rumoured to be building up a €1 bn portfolio of holiday parks in the UK.
‘The impact of Covid-19 was unprecedented and acute; however, the recovery is showing signs that it could be just as swift. We are consistently setting new records in terms of our weekly sales numbers and that trend is only set to continue. The spike in activity and demand that we’re seeing is taking place across the entire product range, both in terms of people wanting to book a UK holiday or looking to buy a second home,’ McGhee said.
Fundamentals that underpin the sector continue to go from strength to strength, McGhee says. Having reported double-digit growth numbers over the past few years, the asset class is experiencing a lot of interest from both alternative managers and traditional investors alike.
‘The customer is more informed and discerning than ever before,’ he adds. ‘There is clearly more demand for experience-led and luxury-orientated travel, and only those operators that can adapt and invest will come out as winners.’
Aria Resorts has invested heavily into their parks over the past three years. It has recently invested over £100 mln in Cornwall and is set to invest another £50 mln in the redevelopment programme at its flagship resort – Retallack Resort & Spa.
