There are approximately 600 trading marina businesses in operation today in the UK. Historically they have been operated by private individuals with the number of individual marinas sold hovering at around half a dozen each year. However, in 2018 private equity interest in the industry grew seeking opportunities to utilise capital to improve investor returns. That year approximately 20 marinas were sold with a similar number transacting in 2021.
Private equity activity in the leisure industry has largely proven profitable for the organisations involved, notably in the holiday and residential home park, and garden centre sectors. This is likely to prove the same for the marina sector as it invests and improves operations and facilities.
One of the biggest transactions in the sector in the run up to 2018 was in 2015 with Wellcome Trust’s acquisition of Premier Marinas, which included a portfolio of eight marinas. This had a dramatic effect on the market, as it showed the multiples some operators are happy to pay for sustainable/projected profits, are substantially higher than the market was used to. This meant that for freehold large marinas multiples increased from 10 to 12 times to 14, 16 and even 18 and over.
Subsequent notable transactions include Lloyds Development Capital buying the British Waterways (now Aquavista) 18 marina portfolio in late 2018 and Castle Marinas’ 11 site portfolio at the end of 2021, and Premier Marinas acquiring Universal Marina on the Hamble in 2021. These transactions have reinforced lower yields in the sub 6 to 7 per cent range in the sector which look here to stay.
But, as in other leisure markets, not every property suits the private equity portfolio and pocket. While Universal was a good add-on for Premier Marinas at a strong profits multiple, with its 240 berths and multi-use buildings in a resilient location, smaller marinas or properties with over-reliance on non-marina income may not appeal. Over 75 per cent of UK marinas have under 250 berths and operate on a sub £1 million turnover, according to the British Marine Federation, so the target market for the private equity buyer is quite small. We also find that lifestyle and individual operators pay stronger prices for the more modest sized marinas.
This also illustrates the new market dynamics with a variety of different types of buyer. For example, in the last year Savills has sold the 491-berth Gillingham Marina on the Medway, the 77-berth Cove Marina in Norwich, the 150-berth Goole Boathouse marina in the East Riding, the 45-berth Top Farm marina on the Shropshire Union and Eastlands Boatyard and moorings in Hampshire. The buyers of these assets ranged from existing marina operators and experienced leisure entrepreneurs to lifestyle purchasers with a special interest in the water-based leisure.
In all, some 100,000 berths are available across the UK for the national 3.5 million cruising population. With marina occupancies at an average of approaching 90 per cent, sound investment by well-funded buyers is likely to offer a good return going forwards.
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