Golf courses have become increasingly popular as investment assets in recent years, with strong demand from both overseas and domestic investors far outweighing supply for numerous reasons.
Appetite for larger golf course assets, particularly those offering multiple income streams through additional leisure facilities, has proven particularly strong. With more than £399 million spent every year at golf courses which can also offer accommodation, according to Savills Aspects of Leisure, many hotels with golf courses fit this bill perfectly. Owners open to considering a sale could therefore be well-placed to capitalise on the pent-up demand.
Golf course hotels that host professional championship events are attractive as investments for obvious reasons, namely the increase in trade that comes from the associated publicity and profile. Yet interestingly, investor demand for non-championship golf course hotels appears to be equally robust, with examples including Formby Hall in Merseyside, Hawkestone Park in Shropshire and Woodbury Park in Devon all changing hands recently. There are several key drivers behind this, not least the fact that owners of golf course hotels are often private families or individuals, and the premium required for championship assets simply prices them out of the market.
Additionally, golf course hotels not only provide an opportunity to invest into a business, but also a substantial land asset that could prove to be a sound long-term investment. Several UK golf courses have also created a further income stream by adapting club house space for retail purposes, with large brands such as American Golf now operating from previously unused space.
The scarcity of high-end stock on the market combined with the weakening of the pound since the EU referendum has further boosted demand from overseas investors for ‘middle market’ golf course hotels. In fact, the devaluation of the pound could also bring greater revenue to UK golf resorts as domestic golfers feeling the pinch financially may well choose to take their golfing holidays at home instead of abroad.
Finally, with political uncertainty seeing some investors wanting to move down the risk curve, the multiple income streams provided by golf course hotels are currently particularly attractive.
For golf course hotel owners, this combination of factors means teeing off the sale of their asset could well prove very fruitful.