US real estate investor Sun Communities has entered the UK domestic travel market with the acquisition of Park Holidays for around £950 million.
Park Holidays’ operating team, led by CEO Jeff Sills, will continue to run the day-to-day operations under Sun’s ownership.
Park Holidays is the second-largest owner and operator of holiday parks in the UK, with 40 owned and operated sites and an additional two managed sites.
The majority of its holiday parks are in seaside locations in the south of England, within a short drive of London and other affluent southern cities.
Sun said Park Holidays ‘represents a natural extension of its existing businesses and portfolio, complements Sun’s strategy and areas of expertise, diversifies its geographic presence, and is expected to generate resilient cash flows.
“In addition, Park Holidays has a proven ability to source and execute both internal expansion and external growth opportunities’” it said in a statement.
Park Holidays primarily rents sites for owner-occupied holiday homes on annual contracts, as well as sells holiday homes to new customers. Sun Communities is a real estate investment trust which owns and operates community sites and RV parks across the US.
“We are incredibly excited to expand Sun’s footprint into the UK by acquiring Park Holidays, which allows us to leverage our land lease community expertise in a growing market,” said Gary A. Shiffman, Sun CEO and Chairman.
“This transaction provides Sun with immediate scale in the UK as well as a platform for future growth in a fragmented landscape.
“We have completed significant strategy and research work in the UK with advisors prior to this opportunity, and feel confident that its long-term macroeconomic stability and fundamentals make the UK a very favourable destination in which to expand the Sun Communities platform internationally.
“Park Holidays has many parallels with Sun, such as its strong portfolio, its focus on growth, and a management approach that is consistent with ours.
“Under the leadership of Jeff Sills and his highly experienced senior management team, who have led the company since 2006, Park Holidays has created a strong brand given the quality of its assets and stellar customer service.
“Its management team has a proven track record of acquiring and expanding properties, efficiently integrating them into the platform, and creating significant value in a short period of time.”
John B. McLaren, Sun Communities President and COO added: “Over time, we intend to use this platform to continue to scale in the UK market, just as we have successfully done in the US.”
Park Holidays CEO Jeff Sills said: “By joining Sun, we plan to continue to consolidate a fragmented industry and provide the Park Holidays experience to an expanding customer base.”
Sun said that, according to industry sources, the UK holiday parks market is expected to see a compounded annual growth of approximately 8% from 2019 to 2021 and approximately 6% from 2021 to 2025.
In the year up to the end of September, Park Holidays made pre-tax earnings of almost £74 million.
The sale, which is subject to approval by the regulatory authorities, is expected to complete in the first quarter of next year.