Sunday, March 21, 2010

Center Parcs Mulling $1 Billion Sale Leaseback of Holiday Park Portfolio

Financial Times - March 19, 2010

Blackstone, the private equity group, will test investors’ appetite for large real estate deals with plans for the sale of a majority £1.4bn stake in its Center Parcs property portfolio.

Blackstone has begun to sound out institutional interest in the sale of the UK leisure and holiday parks, which could lead to the sale of about three-quarters of the business for as much as £1.4bn.

The group, which also owns the operating business that runs the parks, would look to retain a substantial interest in the properties.

Blackstone is said to have spoken to institutional investors this week at Mipim, the annual property festival in Cannes, about its plans for the portfolio, which are still at an early stage.

The private equity real estate fund manager last week received approval from the holders of the bonds that backed the portfolio acquisition to extend the debt by a further two years until 2013, which has given it time to work on the proposals.

It will reinvest cash in the business rather than take dividends during the period. One idea would be for the group to create a new unlisted or listed fund vehicle to own the assets in which investors could buy a stake, according to Estates Gazette.

Blackstone is also understood to be considering similar sale-and-leaseback transactions on other parts of its property portfolio. There is considerable demand among institutional investors for real estate assets that offer long leases and secure income streams through rent from reliable tenants.

Even so, any sale would be the biggest since the last days of the previous property boom.

Blackstone acquired the operating and property businesses in consecutive deals in 2006 for a total of £1.1bn.

The group declined to comment on Friday night. Sphere: Related Content

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