The Darwin Leisure Development Fund is a new opportunity for institutional investors to invest in the lucrative UK Holiday park market. The Fund has been launched following the success of the Darwin Leisure Property Fund, which is now soft-closed, and is managed by the same team.
BENEFITS FOR INVESTORS
Stable, consistent returns of 10 – 14% per annum*
Capital growth, rather than income, is the driver of return and is achieved though:
- Exploitation of existing planning permissions.
- Development gains from new planning permissions.
- Modest level of gearing (max 20% at Fund level).
- Proven ’operational excellence’ model of management of parks post development.
* Target return
- The Darwin team has developed considerable expertise in identifying suitable acquisitions, managing complex redevelopment projects and operating a successful holiday park portfolio.
- This same team will be responsible for investment, acquisitions, developments and operational management of the new fund.
- This is an asset-backed investment and there will be no speculative land purchases - properties added to the portfolio will already be zoned for leisure use.
- The holiday park business model generates stable and predictable revenue streams, ensuring consistency of returns.
- UK holiday parks are an alternative asset class.
- The returns of the Darwin Leisure Property Fund have demonstrated that there is no correlation with returns from any mainstream asset classes, including real estate, providing an excellent diversification benefit for institutional investors.
- Holiday parks are an important component of the UK travel industry, accounting for around 17% of Britain’s entire holiday economy.
- There are currently around 4,000 UK holiday parks which generate annual revenues of around £3 billion.
- There is substantial untapped potential in the market which is still highly fragmented - the top 5 players, including Darwin, still only control less than 5% of the market by number.
- Holiday parks have proved relatively resilient to the economic turmoil of the past few years.
- Holiday parks account for approximately 25% of all UK holiday trips and 31% of all holiday bed nights.
- The industry employs about 130,000 people, including part time and seasonal staff.
THE INVESTMENT OPPORTUNITY
Parks that are acquired into the portfolio will have the potential for substantial increases in their capital value by transforming sites into luxury lodge resorts.
Development of caravans and lodges is less capital intensive than for residential sites and also has less onerous planning requirements.
Where appropriate, we will also invest in the addition of new central leisure facilities, or the upgrading of existing services, which can also increase the capital value of a park.
These upgrades will also lead to an increase in income as static caravan and lodge rental rates are substantially higher than for tents and touring caravans.
Holiday parks provide stable revenues for the Fund, which are typically generated through:
- Sales of static caravans and lodges to new owners and a flow of
upgrade sales to existing owners
- Annual site fees from owners of static caravans and lodges
- Holiday rentals of lodges, static caravans and touring and tenting
- On-site food, beverage and leisure operation revenues
Bath Mill Lodge Retreat, Somerset
Beach Cove Coastal Retreat, Devon
Woodside Coastal Retreat, Isle of Wight
Typical Lodge Interior
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Click on the above images to view a larger version
The images above are of holiday parks owned, operated and redeveloped by the Darwin Leisure Property Fund, which is a completely separate entity to the Darwin Leisure Development Fund. These are representative of the types of park the Darwin Leisure Development Fund will be acquiring and redeveloping.
Note: The manager of the Fund is Darwin Alternative Investment Management (Guernsey) Limited which is regulated by the Guernsey Financial Services Commission. Darwin Alternative Investment Management Limited is the investment adviser to the Fund and is authorised and regulated by the Financial Conduct Authority.
Darwin Alternative Investment Management Limited:
Registered in England & Wales No. 08100415.
Registered office – Empire House, 175 Piccadilly, London, W1J 9EN. www.darwinalternatives.com