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 £4bn and £5bn for Center Parcs, according to people familiar with the matter, after examining 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 faces falling property values and higher interest rates. But a sale could potentially net a windfall for Brookfield, which acquired the resort group from Blackstone for about £2.4bn in 2015.
Brookfield has appointed investment bankers who have been sounding out potential buyers in the past week, the people said.
Brookfield and Center Parcs declined to comment.
Center Parcs operates six holiday villages 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 the value of the real estate alone.
The business is considered relatively resilient to the UK economic downturn as more travellers choose domestic destinations instead of overseas holidays in leaner times.
The prospective sale also underscores the resilience of tourism and hotel businesses, which have been favoured by investors in recent months following a robust recovery from the Covid-19 pandemic.
The volumes of hotel deals struck in Europe increased to €4.3bn in the first quarter, according to real estate advisers Cushman & Wakefield. It was one of the only property sectors to see more deal volume than in the same months for 2022, as dealmaking across the real estate sector slumped.
Brookfield has invested in Center Parcs since the acquisition, spending £100mn on tech upgrades alone. The company hosts more than 2mn guests a year with 98 per cent occupancy, according to Brookfield.