Brad Heffern: Okay. Understood. Thank you.
Operator: Our next question comes from John Pawlowski with Green Street. Please state your question.
John Pawlowski: Thanks for the time. I have a follow-up question on the disposition program in the US Gary, you guys have been talking about the capital recycling since, I think, last September. So curious — it feels like it’s taking longer than expected. So what has changed in terms of the volume you’re looking to sell? And how has pricing changed as you brought these assets to market? How your pricing expectations changed versus the fall?
Gary Shiffman: John, thanks for the question. I think that when we’ve talked about capital recycling, it’s included both the properties as well as some of the other things that we’ve shared with you selling our position in Ingenia the balance sheet notes, unwinding the complexity in our very large JV and other things that we continue to look at of which dispositions is just one part of. Since we’ve discussed that, as you referenced, we’ve spent a good deal of time, assessing the portfolio, determining which assets might be candidates, running all the pre-work and the preparation to be able to market some of those properties, the fruit of which is just coming to bear for the first time this week. It has been an ongoing process and we hope to be able to continue to share more on those dispositions, as we can do so.
As we shared before, we don’t typically announce the dispositions or capital market impacts until they’re actually close. So I think that, as far as how we’re viewing things, they’re pretty similar to how we have in the past. Certainly, interest rates have impacted both pricing and how we look at the accretiveness of the transactions. And we feel comfortable, with what we’re looking at near-term. And as we negotiate through those, we look forward to being able to share them with you. But it’s just a little bit too early John, to know exactly how the market is going to price everything. But moving forward, we’re — I could say, we’re within 25 to 75 basis points of the areas that we expected to be in.
John Pawlowski: Thank you.
Operator: Our next question comes from Anthony Hau with Truist Securities. Please state your question.
Q – Anthony Hau: Hi, guys. Thanks for taking my question. Can you guys provide any color on the transaction market for Holiday Parks? What EBITDA multiple and cap rates for these assets trading at today compared to three years ago?
Gary Shiffman: Hi, Anthony it’s Gary. I guess I suggest overall, that just aren’t very many comps out there. Obviously, as it goes into our recognition of valuation of the Park Holidays platform, as we think about opportunities to acquire or dispose of assets, we’re very, very focused on keeping a pulse in the market there. And the fact of the matter is, that while we believe firmly, Park Holidays is gaining market share from other big operators out there who are struggling both through the macroeconomics and some internal issues that are being made aware at those companies. We grabbed that market share. We are working through creating operational value through home sales and through occupancy, and we’ll have to continue to study and share with you what we’re seeing with valuation in the market.
But as of right now, there’s just nothing to turn to. And I’ll also turn it over to the US as well. When we look at the limited amount of transactions going on in manufactured housing in particular in the US, there just isn’t a lot to reference out there as indicative cap rates or indicative pricing. So, we continue to watch it very thoughtfully.
Q – Anthony Hau: Thanks a lot. If I can just squeeze a quick one, and another one in. Fernando, I saw that same-properties revenue for UK is 200 bps lower than the average rental rate increase. Just curious like what’s the difference? Is it because the transient side is a little bit weaker? Or is it because of occupancy?
Fernando Castro-Caratini: Sure Anthony, their transient growth expected in the UK for this year is at about 250 basis points of growth year-over-year. So that certainly is a driver, of revenue being — revenue growth being less than the rental increase of north of 7%. And then, it would be timing of nonrenewals to when we are expecting the sales and bringing in new homeowners. So, there is right as you know, our rental increases go out in the fall. We already have over a 90% renewal for the portfolio, but it essentially is timing differences from an occupancy perspective.
Anthony Hau: Thank you.
Operator: Our next question comes from Anthony Powell with Barclays. Please state your question.
Anthony Powell: Hi, good morning. I had a question on the RV NOI growth guidance of 2.1% to 2.5%, but that seemed a bit light given the strong kind of annual growth rate. So, can you talk about your changing demand assumptions and also your assumptions for RV expense growth this year?
Fernando Castro-Caratini: So Anthony, thank you for the question. On the revenue side, prior we are expecting transient revenue growth for the portfolio to be at — to be down about 2% — 2.75% for the year and that is what we are currently underwriting. And we are — we do have higher expenses expected for the portfolio this year. And again, it’s returning to more normal conditions. Last year, we did put in a number of active cost containment strategies across payroll utilities and supply and repair. And budgeting, forecasting for those to be at more normal levels over the course of 2024 is driving expense increase year-over-year of just under 10% for the year. That’s — those are the two drivers where our NOI growth at the midpoint is expected at 2.8%. We are forecasting another very strong year of conversions for our portfolio that will continue to drive operational efficiencies over the course of the next couple of years.
Anthony Powell: Right. So, is that transient revenue demand assumptions all driven by site conversions? Or is that also assuming it’s weaker against the visitation weaker pricing?
Fernando Castro-Caratini: Anthony, I’m sorry. Can you ask the question as it cut in and out?
Anthony Powell: Yes, sorry. On the transient revenue decline assumption, is that driven all by site conversions? Or is that also driven by visitation or other assumptions that are driving that decline?
Fernando Castro-Caratini: That is primarily driven by the site conversions that occurred over the course of last year and continued conversions into this year. Given that we converted last year over 6% of our sites, we are underwriting strong rate growth on the transient side. That is — that gets you to the down year-over-year about 2.75% currently.
Operator: Thank you. There are no further questions at this time. I’ll hand the floor back to management for closing remarks.
Gary Shiffman: We thank everybody for participating in the conference call. And we really do look forward to sharing with you our first quarter results and the rest results as they are able to be shared throughout the year. Thank you, operator.
Operator: Thank you. And that concludes today’s call. All parties may disconnect. Have a good day.
