• Euro Disney looking to property sales

Euro Disney has extended its partnership with the French state by 13 years to 2030, giving the operator time to complete the three parks promised in its 1987 agreement.

The deal will allow the group to revive an eco-tourism development – Les Villages Nature de Val d'Europe – first mooted in 2003, a joint venture with the Pierre & Vacances Group which could see it move into holiday property sales.

The development, which was first mooted in 2003 is expected to garner much of its Eu1.8bn funding from "individual and/or institutional investors". It sees a phased development of up to approximately 500 hectares within a 20-year time frame, incorporating 7,000 beds.

Although Euro Disney has yet to confirm the details of the funding, it is thought that Pierre & Vacances will use its experience in the holiday property market to sell the property. It currently offers investment opportunities under a freehold or, in France, leaseback model, which includes the option to use the property for a certain number of weeks a year and letting it for the remainder of the time.

The planned development bears a striking resemblance to Pierre & Vacances' Center Parcs product (which is also part of its investment offering), with low construction density, combined with adherence to World Wildlife Fund's One Planet Living principles, leisure and recreation facilities and no cars.

The original plans drawn up for the development saw the current Davy Crockett Ranch on the Euro Disney site – which incorporates self-catering as well as restaurant facilities – becoming part of the wider development, kick-starting the eco-village.

Although Euro Disney and Pierre & Vacances formed their joint venture in 2003, it wasn't until 2007 that a letter of intent was signed between the French state, Euro Disney and Pierre & Vacances, giving the project the state's backing.

It has been reported that the group pushed to get last week's agreement signed before the end of the year to allow for the village to be marketed ahead of changes to the tax breaks relating to rented accommodation, which the French government is thought likely to bring in before the end of the year.

Euro Disney is eager to strengthen its financial position. The group saw attendance in the first half of the year fall 8% to 6.5 million, leaving it with a net loss of Eu114m. The group has had ongoing issues with the Eu2bn in debt used to fund the park's construction. 

Euro Disney's 2009 accounts warned that, should it failed to comply with its covenants in the current fiscal year, it would have to "appropriately reduce operating costs, curtail a portion of planned capital expenditures and/or seek assistance from The Walt Disney Company or other parties as permitted under the debt agreements".

The group has restructured its debt twice and in 1994 did so with Prince Alwaleed bin Talal's Kingdom Holding Company, which holds a 10% stake.

The group reported 15.4 million visits for 2009, with occupancy at its hotels at 87.3%. The high occupancy figure (it was 90.9% in 2008) indicates that, in addition to issues around the inclement northern Europe weather and current downturn, the park needs to increase its hotel capacity, an issue which could be aided by the eco-village.

Euro Disney's parent company, The Walt Disney Company – which owns a 40% stake – has, through the Disney Vacation Club, built a business through selling property deeds in its resorts, which Euro Disney has not participated in (although members of the club can use points to stay at the resort's hotels).

Instead, in 2001 Euro Disney formed an alliance with the Marriott Vacation Club International, creating a Marriott Vacation Club Resort over-looking the park's golf course.

Should the joint venture with Pierre & Vacances indeed give Euro Disney the chance to sell properties on its site – acquired at a discount in 1971 courtesy of a French government eager to attract The Mouse – the group may at last have a chance to resolve its debt issues and get on with solidifying its position as Europe's self-proclaimed number one tourist destination.

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