The Blackstone Group was thought to be close to agreeing the sale of seven Center Parcs resorts located in the Netherlands, Germany and Belgium.
The deal came a few months after the private equity group agreed new long-term leases on the properties and announced a EUR200m investment in them.
Luxembourg-based property investment company Aroundtown was reported to have agreed to pay around EUR1bn for the seven resorts. Aroundtown’s investment portfolio included 30% hotel assets, with office making up the majority, at 53%.
The company successfully placed EUR500m in subordinated notes at the beginning of July, which it said would be used to fund its growth strategy and to re-finance and repay existing debt. The purchase would see Aroundtown diversify away from its strategy, which has seen it focus on income-generating properties with value-add potential in central locations in top tier cities primarily in Germany and the Netherlands.
Blackstone announced the renovations to the resorts shortly after HNA exited from its jv with Pierre & Vacances, which operated the sites.
Blackstone acquired the resorts in 2006 for around EUR630m, but kept Center Parcs Europe as a separate entity from Center Parcs UK which the private equity group acquired in a separate transaction in the same year and then sold to Brookfield Property Partners in 2015.
The sites were owned by French leisure group Pierre & Vacances, which also owned a further nine Center Parcs properties in Europe and continued to operate the properties.
Under the terms of the new agreement, Blackstone invested EUR200m in the renovation of the facilities and accommodations in the seven largest holiday parks: De Kempervennen, De Huttenheugte, Het Heijderbos and Het Meerdal in the Netherlands, Erperheide and De Vossemeren in Belgium and Bispinger Heide in Germany.
Around 85% of the investment was be in the 4,800 cottages, with the remainder in the Aqua Mundo subtropical swimming paradise, the central facilities, the infrastructure and new forms of experience.
Pascal Ferracci, CEO, Center Parcs Europe, said: “People need a carefree stay and are looking for surprising moments and unique experiences to share together. That is why we signed an agreement with Blackstone, which allows us to invest EUR200m in the renovation of our seven largest parks in the Netherlands, Belgium and Germany. With this investment we want to reinforce the unique character of each park to meet the changing needs of our guests.
“With this extensive innovation programme we want to set a new standard in experience, stay and togetherness. We want to keep surprising our guests, while they spend time with their family and are really together.”
Blackstone was also involved in Lego’s deal to buy Merlin Entertainments with an enterprise value of GBP5.9bn, partnering with the Danish group.
Sir John Sunderland, chairman, Merlin, said: “Following an unsolicited approach by a Consortium of investors, and after rejecting a number of their proposals, the Merlin independent directors believe this offer represents an opportunity for Merlin shareholders to realise value for their investment in cash at an attractive valuation.”
The company had 20 hotels and was thought to have been considering moving private to pursue its long-term development away from the scrutiny of the public markets. The group said that the “trend towards shorter, more frequent breaks has supported the growth of Merlin’s themed on-site accommodation within its theme parks. Merlin has over 4,300 rooms across a variety of accommodation formats and price points, including four star hotels, lodges and glamping”.
Søren Thorup Sørensen, CEO, Kirkbi, the family holding company behind Lego, said:
“As the long-term owner of the Lego brand and as a strategic shareholder in Merlin since
2005, we have great pride and passion for this amazing company, its management team and
its employees. With a shared understanding of the business and its culture, we believe that this
group of investors has the unique collective resources necessary to equip Merlin, for their next phase of growth. We are committed to ensuring Legoland and the other activities in Merlin reach their full potential, which we believe is best pursued under private ownership.”
HA Perspective [by Katherine Doggrell]: As we reported elsewhere this week, there’s nothing like a captive market to warm the cockles and both Center Parcs and everything Lego have pretty much cornered the family pound, leaving precious little to fritter away in casino resorts.
But where the likes of Caesar’s Entertainment face regulatory issues and limited areas of growth, try chucking up a Center Parcs in six months and try again. Resorts such as Center Parcs and Legoland may throw off cash, but those waterparks and giants Lego spiders don’t build themselves, requiring long term vision, cash and patience.
As Fosun International noted at its IPO earlier this year, there’s money in this ‘ere family travel (it may have phrased it differently). And like much else in that area, it requires deep pockets.