Three Butlin's resorts now have new landlords, following a £300million deal to purchase the popular holiday venues. The Minehead site in Somerset, Skegness and Bognor Regis sites have each had 'ground rent deals' or arrangements agreed, Somerset Live reports.
According to the reports, the Butlin's sites' new landlord is the Universities Superannuation Scheme, which is the UK's largest pension scheme. It already boasts management of £3billion in assets - and now it's acquired the real estate of these Butlin's sites too.
However, that doesn't mean that the entirety (or the wider holiday park business) of Butlin's has been snapped up. After being put up for sale by its current owners last year, it's still very much on the market - and is expected to fetch a figure as high as £700million amid a boom for holidays here in the UK following the Covid-19 pandemic.
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Speaking to City AM, head of private markets at USS Investment Management Mike Powell said: "We are very pleased to conclude this acquisition. 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."
What is 'ground rent'?
According to 'mypropertyguide', "if you own a long lease on a property in England and Wales you will normally have to pay rent to the freeholder or landlord of the property - this is known as Ground Rent. The lease will normally specify how much rent you have to pay and when it has to be paid.
"Generally the rent will be quite low and is often in the region of £50 per year. This is sometimes paid in one instalment or may be payable half-yearly or quarterly. Ground Rent can be fixed or escalating.
"If it is fixed it means that it remains unchanged throughout the term of the lease. Escalating Ground Rents will increase during the course of the lease. The lease will specify when the Ground Rent increases and by how much."
Butlin's as a wider business is still up for sale
The three Butlin's camps are currently owned by Bourne Leisure. Blackstone, an American private equity company, purchased Bourne Leisure in 2021 but is looking to offload the Butlin's part of the business.
Blackstone is reportedly looking to "reshape its Bourne leisure parks arm" as it assesses the future of the business. It is also reported that Bourne Leisure and Blackstone are said to have decided that Butlin's is "sub-scale and therefore non-core to its growth plans".
Sky News reports that Queensgate Investments, a property investor behind a portfolio of five-star London hotels, is said to be among the suitors for the holiday brand. It has reportedly joined a trio of rivals in the race to buy Butlin's from Bourne Leisure - Bain Capital, Epiris and Asda's parent company TDR Capital.
It has been reported the Butlin's chain will require "significant investment" to modernise its three camps heading forward. It is understood the signature "skyline" tents at all three resorts need to be replaced.
Somerset Live reports that the current tents "have holes in the roofs" and often leak when it rains. To replace them would be costly and would cause massive disruption to business, "which is why previous owners just left them".
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