The sites of Blackstone-owned holiday resort chain Butlin’s have been snapped up for £300m, in a ground rent deal signalling the continued momentum behind British holiday parks.
Chief market analyst at IG Group, Chris Beauchamp, told City A.M. the investment was “a sensible move given the expectation that Brits will be spending less time on planes flying abroad – not just because easyJet and BA keep cancelling flights – and more time at home.
“Butlins has been remarkably long-lived, and having reinvented itself for the 21st century, now looks well placed to benefit from a trend of holidaymakers looking to replicate much of the package holiday experience without the cost, and inconvenience, of flying.”
Michael Hewson at CMC Markets said yesterday that the well-documented travel chaos currently “could be good news for holiday resorts here in the UK.”
Universities Superannuation Scheme (USS), the UK’s largest private pension scheme by way of assets, has acquired the real estate sites of Butlin’s via its in-house private markets team at USS Investment Management.
Butlin’s three sites, in Skegness, Minehead and Bognor Regis, will now fall within USS’ portfolio, which hosts around £3bn worth of private real estate and credit assets.
“We are very pleased to conclude this acquisition,” head of private markets at USS Investment Management, Mike Powell, said.
“Butlin’s is a much-loved British institution and this acquisition represents a significant investment in its future whilst providing the long term cashflows that USS needs to pay the pensions promised to our members.”
It comes amid a potential deal for Butlin’s as a whole, which has been in the works for several months.
Analysts expect the private equity owned Butlin’s to fetch some £700m amid a domestic holiday boom in the UK post-pandemic.
However, bidders reportedly balked at the hefty price tag, which was pinned to the chain as Blackstone looks to reshape its Bourne leisure parks arm, which also operates Haven and Warner Leisure Hotels.