UK resort operator Center Parcs has secured £28m of funding with its property landlord, Sun Capital, in order to expand and upgrade its facilities over the next three years.

The money will be used for a series of projects at the four existing UK Center Parcs villages, for which the group has already earmarked £25m. Work will include the building of new accommodation, the development of sports and leisure facilities and the conversion of standard villas into luxury suites.

Sun Capital will provide 70 per cent of funding against total project costs under the terms of the new agreement while the blended cost of investment for the company on each project is around 9.5 per cent.

Center Parcs expects to see returns in excess of 40 per cent on the value of its investment in these projects immediately upon the new facilities opening.

In November 2002, Center Parcs sold the land and buildings of its four UK resorts in a leaseback deal to Sun Capital, an investment vehicle of the ex-Pizza Express entrepreneur Hugh Osmond. Center Parcs then listed on AIM in December 2003.

CEO of Center Parcs, Martin Dalby, said: “We now have in place the funding for core business expansion over the next three years on investments that will both enrich our product and yield high returns.”