Brookfield Buying U.K. Center Parcs Resorts From Blackstone

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Whinfell Forest Center Parcs
Whinfell Forest Center Parcs on the edge of the Lake District. Source: Center Parcs Limited via Bloomberg

Brookfield Asset Management Inc. agreed to buy resort operator Center Parcs from Blackstone Group LP for a price that people familiar with the matter said last week is about 2.4 billion pounds ($3.7 billion).

The acquisition would be made through Brookfield’s publicly traded subsidiary, Brookfield Property Partners LP, and a fund managed by the parent, and is due to be completed by the end of July, according to a statement on Tuesday. The purchase price wasn’t disclosed. Center Parcs U.K. Group runs five resorts in the U.K. that include hotels and countryside activities from sailing to swimming.

The offer from Canada’s largest alternative asset manager exceeded bids from others, including groups led by Canada Pension Plan Investment Board and CVC Capital Partners, the people with knowledge of the matter said. They asked not to be identified discussing private information.

Center Parcs U.K., separate from Center Parcs Europe, had average occupancy levels of about 97 percent at its resorts over the last five years, according to the statement. The company reported revenue of 314.6 million pounds in the year to April 2014, its annual review showed.

Dutch Origins

The five resorts, each located in about 400 acres (162 hectares) of woodland, are this year expected to attract 2 million guests, according to the release. The Center Parcs concept originated in Holland in 1967 and Sherwood Forest opened in England in 1987. In April, Center Parcs announced plans for a 375-acre village at Newcastle Wood in Ireland that’s expected to open in 2019.

Brookfield has been buying assets to add to its real estate holdings and generate cash flow. Last year it acquired Capital Automotive, a Virginia-based auto-dealership property-finance company.

Reports of takeover bids for Center Parcs have circulated since last year and Blackstone rejected an offer from BC Partners in December, according to people with knowledge of the matter. The resort company in March said it was considering “strategic and financing options which may include private or public equity or debt capital markets.”

Other reported bidders for the company, in partnership with CPPIB or CVC, were GIC Pte., Starwood Capital Group, and KSL Capital.

Brookfield, which oversees $207 billion in assets, already has resort properties in its portfolio including the Atlantis Paradise Island Resort in the Bahamas and the Hard Rock Hotel and Casino in Las Vegas.

Rothschild, Bank of America Merrill Lynch and Morgan Stanley advised Blackstone.

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