Center Parcs owner Brookfield puts holiday chain up for sale

UK holiday village chain Center Parcs has been put up for sale by its owner, the Canadian private equity firm Brookfield.

The company is looking to raise between £4bn and £5bn from the sale according to the Financial Times.

Brookfield bought the business for about £2.4bn in 2015.

Center Parcs runs six holiday villages in the UK and Ireland which attract more than two million visitors every year.

They are particularly popular with families as they offer a range of activities on-site, with an indoor waterpark as the central attraction and wooden cabins set in cycle-friendly forests.

The first UK location opened in 1987, at Sherwood Forest in Nottinghamshire. There are now holiday villages at Elveden Forest, Longleat Forest, Whinfell Forest and Woburn Forest.

In 2019, it opened its first site in Ireland, with Center Parcs Longford Forest close to the town of Ballymahon in County Longford.

The Financial Times said that Brookfield had appointed investment bankers to sound out potential buyers, including other private equity firms.

Danni Hewson, head of financial analysis at AJ Bell, said there still appeared to be strong demand for Center Parcs holidays for now, with some wealthier holidaymakers trading down from holidays abroad.

"During the pandemic Brits rushed to snap up sought after places, but even with cash-strapped families ditching the extra 'staycation' in favour of one holiday, it's clear by the prices and availability that there's still more than enough business to go around - so far," she said.

But rising mortgage costs and the difficult economic climate did raise a question over future growth, she added.

Earlier this year, Center Parcs scrapped plans to develop a new holiday village in West Sussex.

In July 2021, the company had secured an option agreement to acquire Oldhouse Warren, a privately-owned woodland on the outskirts of Crawley.

However, Center Parcs said a "rigorous" environmental survey had revealed that the site was not suitable for development.

Environmentalists had argued that the site would destroy established woodland and damage the habitats of rare birds.

At the end of last year Center Parcs said occupancy rates were at 97.3%, and broadly in line with pre-Covid levels.

Revenue of £426.6m between April and December last year represented a 20% increase compared to the same period a year earlier, and 18% higher than before the pandemic.

Last year, Center Parcs was forced to backtrack over a decision to ask guests to leave its sites on the day of the Queen's funeral.

When it announced the move, it said the decision was made "as a mark of respect" and to allow employees to "be part of this historic moment".

But the move prompted angry complaints from holidaymakers as it would have meant some guests would have had to leave part-way through their break and return afterwards.

Center Parcs UK is a separate business from Center Parcs Europe, which has holiday villages in Belgium, the Netherlands, Germany and France. The European business is still owned by Blackstone Group which sold the UK part of the business to Brookfield in 2015.