Building a nationwide network of premium boutique holiday parks in unique locations
What we're doing
Limerston have identified the UK holiday parks market as a core area of focus within the consumer and leisure sector due to its robust fundamentals. The sector is stable with a well-established business model, and the asset-backed nature of holiday parks businesses, with inherent value in both the real estate locations and property, provides a significant level of downside protection. Market trends, even before the onset of COVID-19 were structurally supportive for growth in the sector.
The first business of the platform is a Scotland-based holiday park operator Largo Leisure, offering self-catering lodge and caravan holidays across four parks in Scotland. Largo has the attractive characteristics including small size parks in premium locations, proximity to large urban centres, good mix of units and significant capacity for growth.
We first met the founder and owner of Largo in January 2020 when he started considering a sale. We stayed in contact and developed a relationship that resulted in a bilateral deal to acquire Largo in an off-market transaction in March 2022.
With units across the Largo parks ranging from glamping pods to large-scale premium lodges and a mix of owned and rental properties, the business targets a younger premium demographic with a differentiated proposition compared to typical competitor offering.
Prior to our investment, growth of the business has been fully financed by internally generated cashflows with no external investment. In addition, we have identified significant opportunities for value creation through operational improvements.
We developed a clear value creation roadmap and a pipeline of off-market opportunities to enable us to deploy a significant amount of capital in building a platform of scale. We partnered with an experienced executive team from the sector to add capabilities required to deliver the ambitious growth plan, both organically and through acquisitions.
Our immediate focus post-acquisition is on optimisation of pricing and occupancy to improve profitability, upgrading existing lower yielding rental units into premium ones, development of additional pitches/units as well as additional on-site amenities.
Central to the investment thesis is a buy-and-build rollout of Largo’s differentiated offering across a number of additional parks in the vicinity and further afield. The existing four parks operate in a regional cluster that allows for shared management resource, shared services and cross-selling and effective capacity management. To make use of this, we will be driving the acquisitions of other small, independent local parks to be added to the existing cluster and upgraded to replicate the Largo offering. We have identified a long list of well suited, predominantly small, independently operated caravan and holiday parks which would fit quite well with the current offering.
There is an opportunity to replicate the park cluster concept in other attractive UK locations through the acquisition of small regional groups with a similar offering, and by utilising same strategy as with Largo of upgrading and expanding existing locations and growing the regional presence through acquisitions and upgrade of additional parks.