In recent months, many of our clients have received an increasing number of direct approaches from operators either in person, by phone or by post and e-mail expressing an interest in acquiring their parks. Indeed, we are aware that in some instances operators are employing call centres to make an initial approach though that may not be particularly obvious.
Why is this happening? The simple explanation is that we are experiencing buoyant demand for parks with only a very limited supply of parks coming to the market. We are also seeing a much greater degree of market segmentation and agglomeration occurring which can lead to the value of the whole being greater than the sum of the parts.
The dynamics of the market are constantly shifting, often as a result of new sources of funding becoming available with innovative financing and legal structures being put in place. The underlying strength and the variety of income streams available from parks has become increasingly recognised and whilst park businesses are truly distinguished from one another by their management, location, scale and facilities, they also represent an asset class which at their core, provide a return on investment. Whilst parks are not traded as financial instruments, the way in which parks are financed is becoming increasingly diverse and has a considerable impact on marketability and value. Maintaining a close watch on this aspect of the market together with up-to date knowledge of market conditions generally and of the range of buyers who have the strongest appetite for parks are all key components in understanding the value of parks.
Naturally, in a competitive environment where supply is constrained, imperfect information provides opportunities that can sometimes be exploited. Equally, the desire to do a ‘quiet deal’ is often at the forefront of the minds of park operators who are considering disposing of their park; the benefit in terms of ensuring that staff and customer loyalty is not compromised is usually a powerful motive.
Frequently, the best way to ensure that the best possible price is realised is to expose a park to the market fully though on occasion there can be ‘special purchasers’ such as immediately adjacent similar businesses who will always outbid the market. However, there can also be instances where more discreet marketing can extract an element of premium value that is not available in the market generally as a result of perceived exclusivity and discretion. Likewise, a desire by vendors to maintain complete confidentiality may prompt a requirement to deal with any sale in confidence.
At Sanderson Weatherall, we provide confidential and discrete advice on sales without charge or obligation ‘in the round’ however, factors such as those identified frequently dictate that we undertake park sales on a confidential basis.
The key to extracting maximum value whilst also successfully concluding a ‘quiet deal’ is to have a comprehensive and up to date knowledge of the market and to ensure that competing interest is engendered. This is still possible within the confines of a confidential marketing exercise and in our experience, despite suggestions otherwise, there is seldom only ‘one game in town’.
To discuss the possibility of a confidential sale of your park and how this would be undertaken or to register your requirements, please get in touch.