Media & News
- First acquisitions in The Netherlands for its €400m LHESIF I fund
- Long Harbour targets new investors for growing pipeline of European ground lease transactions
LONDON, 07 July 2021 – Long Harbour, the real estate and asset backed investment manager, has completed the structuring and acquisition of commercial ground leases for the central guest facilities of two holiday parks in The Netherlands on behalf of the firm’s flagship European vehicle, the Long Harbour European Secured Income Fund I (LHESIF I).
The two commercial freeholds are the first holiday parks in The Netherlands to be bifurcated into a freehold and leasehold utilising a ground lease structure. Long Harbour has now deployed €100m into the European ground lease market in just over a year, in Germany, Ireland and the Netherlands. The LHESIF I, which is open to new investors, has a strong pipeline of further deals across Europe.
Acquired from European holiday park operator Landal GreenParks, the two holiday parks offer over 1,000 holiday homes in total and high-quality central guest facilities. While Long Harbour will own the freeholds of the central guest facilities, Landal will retain the leasehold and continue to operate the assets through its experienced on-site and central management teams.
The Landal Het Vennenbos holiday park is located in De Brabantse Kempen, an area of natural beauty and close to the Belgian border. The 53-hectare park offers leading central facilities and 523 holiday cottages, which have benefited from significant investment and refurbishment over the last three years. The second asset, Landal De Lommerbergen, is a 35-hectare holiday park with 502 cottages situated close to the Dutch-German border.
Founded in The Netherlands in 1954, Landal GreenParks is one of Europe’s leading holiday park operators, with over 90 locations throughout Europe across eight countries.
Long Harbour to target further freehold acquisitions
The LHESIF I launched in November 2019 with a mandate to deploy capital into commercial and residential ground lease deals in strong European markets such as Germany, Ireland, The Netherlands and The Nordics.
The latest acquisitions are the fourth transaction for LHESIF I, bringing the total value of assets acquired to €100m. The fund is open to additional capital partners to further expand a strong pipeline of deals as interest in the ground lease model grows across Europe, with investors attracted to the super secure inflation-linked income the freeholds provide.
LHESIF I structures ground leases to acquire freeholds by either providing existing landlords with a method to realise equity and recapitalise their balance sheets, or by providing acquisition capital to other real estate investors seeking to benefit from the use of ground leases in real estate acquisitions, where reduced equity provision results in an improved weighted average cost of capital and therefore higher returns.
Andy Wheeler, Investment Manager for the Long Harbour European Secured Income Fund, said: “These latest acquisitions are Long Harbour’s first in The Netherlands and some of the largest assets we have acquired on behalf of LHESIF I to date. The bifurcation of the holiday parks into a new freehold and leasehold structure will provide stable, long-term ground-rent income for the fund.
“We are pleased to have partnered with Landal, who are a leader in the European holiday park sector and have excellent asset management capabilities, with the two parks already having benefited from recent significant investment. We are actively targeting further deals in the holiday park sector, where owner operators are increasingly looking to recapitalise their assets.”
Richard Silva, Fund Manager for the Long Harbour European Secured Income Fund, said: “It’s clear from the strong engagement that we have seen from owner-occupiers looking to explore a freehold and leasehold structure since launching the fund that the market in Europe has huge potential. For investors and particularly for pension funds, the super secure, inflation-linked long income that ground rents provide is highly attractive, and given the size and potential of this dynamic market we see significant further capital moving into the sector. LHESIF I is an open-ended vehicle, so there is no limit on capital, and we are actively seeking additional capital partners to bring forward the deals in our pipeline.”