Brookfield Could Net £1.5B Profit On Center Parcs Sale

Center Parcs, the UK holiday villages giant, has confirmed it is undertaking a strategic review that could lead to a sale of the business and a £1.5B profit for owner Brookfield. 

In an announcement to bondholders alongside full-year results earlier this month, Center Parcs said it was undertaking a strategic review as the business recorded record profit.

Sky News reported earlier this year that Barclays and PwC had been lined up by Center Parcs to advise on its options, which could also include a refinancing, sale of a minority stake or an initial public offering. 

A price of £4B has been mooted for Center Parcs. Brookfield’s property arm bought Center Parcs from Blackstone for £2.4B in 2015, so a sale at that price would net Brookfield a huge profit on its investment. 

Brookfield had to step in to provide financial support to Center Parcs during the pandemic when income dropped to zero due to enforced closures. And the cost-of-living crisis being caused by food and energy price inflation has caused the sales of other major holiday operators in the UK to wobble. 

But Center Parcs’ financial results do not yet show any signs of decreasing consumer confidence. The company reported record revenue of £503M and record earnings before interest, tax, depreciation and amortisation of £246M for the year to 21 April. 

That is despite occupancy being only 80% due to pandemic closures and needing to operate at reduced capacity because it could not find enough staff to service all of the lodges at its five parks in the UK and one in Ireland. In 2019, its occupancy was 97%. The company said it expected to get back to that level in the rest of 2022 and 2023, having solved its staffing issues.