Strutt and Parker has published its annual report on the market for golf courses in the UK. The market trends of 1999 continued throughout 2000. The larger golf operators increased their portfolios and demand for commercial courses remained strong. There was an insignificant increase in the number of actual sales but there was an increase in the number of higher value properties changing hands. Over the past few years there has been a steady increase in transaction size. This partly reflects a continuing increase in values but also reflects the willingness of owners of higher value properties to offer them for sale.
Charles Greville-Heygate, the report’s author, believes that this shows a growing confidence in the market by owners of this type of property matched by a continued demand from the larger operators and wealthy individuals. He says that it also reflects the upgrading of properties that has been taking place to meet the increasing expectations of golfers and the growth of country club facilities such as health and fitness and accommodation which increases the package size.
The top five major operators have continued to grow. The non-hotel operators – American Golf, Clubhaus, Crown Sports are “poised for an interesting year.” American Golf plans to increase the size of its UK portfolio by acquiring another 20 facilities in the next two years. Clubhaus has announced its intention to concentrate on the development and operation of clubs with country club facilities such as health and fitness. Of the 16 UK properties owned, 7 have country club facilities already and 5 have potential for development as country clubs. Since the year end American Golf has purchased 2 of the 4 remaining clubs and the future of the other 2 is under review.
Jeff Chapman, the Australian media entrepreneur, has taken a 60% stake in Golf Club Holdings, changed the name to Crown Sports and has already expanded into stand alone health and fitness clubs with the acquisition of the Dragon group. Further acquisitions are likely within and outside the golf market.
Charles Greville-Heygate expects the total number of sales in 2001 to be similar to the level in 2000 (20-25 properties) and anticipates a continuing increase in the value of good commercial golf courses of 5 –10% and a standstill or even a fall in the value of poorer courses.
There will be a continuing demand for commercial courses from existing operators and wealthy individuals. Overall he expects the quality of the courses and their facilities to improve and for further non-golf facilities such as health and fitness clubs to be developed.
The report says that perhaps the most interesting development that is likely to take place over the year 2001 will be the extent of the change in the portfolio of the top three golf operators, while some of the operators who have recently come into the market, such as the PGF Group – who purchased Horton Park Golf and Country Club in Surrey for a figure in excess of £3m through Strutt and Parker- are likely to build their portfolios.
Strutt and Parker www.struttandparker.com
Charles Greville-Heygate william.hillary@struttandparker.co.uk