Hello Rainmakers,
Residential parks are becoming an increasingly interesting corner of the UK’s real estate market, and Serenity Parks is making a fairly clear statement about where it sees the opportunity.
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Serenity Parks has followed its acquisition of three residential park-home communities in Dorset and Hampshire with a further four-site deal covering more than 1,500 homes.
Taken together, the transactions provide perhaps the clearest indication yet that Serenity is not simply building a portfolio of individual parks. It is attempting to create a scaled national operator in a fragmented market.
The latest deal takes in Kings Park Village on Canvey Island in Essex, The Elms in Torksey, Lincolnshire, Willowbrook in Lancing, West Sussex, and Sandy Oaks in Bestwood, Nottinghamshire.
There is an obvious geographical logic to the acquisitions. The parks are established communities in locations suited to later living, giving Serenity additional scale without having to rely solely on developing new sites.
That matters because the investment case for residential parks is fundamentally different from that of traditional residential development.
Rather than buying land, securing planning permission and waiting for homes to be built and sold, an operator acquiring established parks is buying existing communities and an operating business.
The attraction for a consolidator is the potential to combine that underlying income base with operational expertise, investment and further acquisitions.
Serenity founder Gary Burns describes the strategy in those terms.
“Serenity Parks’ company strategy is to grow our portfolio of high-quality residential parks across the UK, building the scale and platform to allow the business to continue raising the bar for what people can expect from the sector, while providing the best possible residential park-homes experience for our residents.”
The word that matters most in that statement is probably “scale”.
The four latest acquisitions give Serenity more residents, more locations and a broader operating footprint. More importantly, they potentially make the next acquisition easier to integrate into an increasingly standardised platform.
That is the classic logic behind a buy-and-build strategy.
The value creation does not necessarily come from simply owning more assets. It comes from creating a larger operating platform capable of generating efficiencies, professionalising management and potentially attracting a wider pool of capital.