A quest to turn caravnning into a chic but cheap alternative to buy-to-let holiday homes
Caravan parks are hardly the embodiment of five-star holiday luxury. The appeal of the sites has always been the immediacy of outstanding natural beauty in surroundings that are more comfortable than a tent but less costly than a B&B.
The Darwin Leisure Property fund, launched in November 2007, wants to change all that by turning caravanning in the British countryside into a chic but still relatively cheap alternative to buy-to-let holiday homes. The managers want to transform the Carry on Camping image of caravan parks to attract more of a Kate-Moss-at-Glastonbury type of crowd.
“Caravan parks occupy some of the most beautiful sites in the country. If you put a house in some of these locations they would fetch millions,” says one investor in the fund.
The logic behind the idea is sound. The caravan industry is growing at 4per cent a year, according to Mintel. The planning regime for greenfield sites is highly restrictive, meaning high barriers to entry for competitors and constrained supply. Meanwhile, demand is set to rise. The recession is expected to boost the caravan industry as people swap foreign holidays for UK “staycations”. Darwin says that the “low cost and flexibility” of a caravan holiday makes it more attractive in times of economic uncertainty.
About 85 per cent of caravan sites are owned by husband-and-wife teams who lack the capital to invest in their business, according to Darwin. Park owners make their money from stable long-term cashflow: annual pitch fees from owners and tariff income from caravans for hire, as well as retail sales.
The fund will use investors’ money to upgrade “unsightly” caravans with attractive lodges and make the running of the sites more efficient, resulting in higher-quality parks and improved profitability and investment returns. Parks that benefit from investors’ cash will be eco-friendly and carefully landscaped.