Ladies and gentlemen, thank you for standing by, and welcome to the Sun Communities call regarding the pending acquisition of Park Holidays UK. At this time, management would like me to inform you that certain statements made during this conference call, which are not historical facts, may be deemed forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995. Although the company believes that expectations reflected in any forward-looking statements are based on reasonable assumptions, the company can provide no assurances that its expectations will be achieved. The factors and risks that could cause actual results to differ materially from expectations are detailed in this evening's press release form and from time- to- time in the company's periodic filings with SEC. The company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.
And with that, I'd like to turn the call over to Gary A. Shiffman, Sun Communities Chairman and CEO. Gary?
Thank you, operator, and good afternoon, everyone. I'm very pleased to be announcing that Sun Communities has entered into a definitive agreement to acquire Park Holidays UK. Today's announcement marks another milestone in the ongoing growth and evolution of the Sun portfolio as we enter the U.K. market, a favorable destination in which to expand the Sun Communities platform. Park Holidays business model is nearly identical to Sun's manufactured housing and RV platform, and this transaction allows us to apply our deep expertise to a new market and thereby further accelerate our growth. This GBP 950 million transaction, or $1.3 billion, further demonstrates our ability to accretively expand the company through strategic acquisition while leveraging our core expertise in MH and RV.
Park Holidays is an extremely complementary and high-quality business, which gives us immediate scale in the U.K. as well as a platform for future growth in a fragmented market. I'd like to first provide a little context with regards to the U.K. holiday park industry, and then I'll give some details on the Park Holidays portfolio. Sun has been exploring and analyzing the U.K. market for a number of years now as we saw a compelling opportunity, and we have been intrigued by the similarities to the U.S. market, along with the long-term macroeconomic stability. Throughout its history, the industry has demonstrated resilience and strong and consistent growth through multiple economic cycles. In particular, in recent years, the U.K. holiday parks market has seen an approximate 8% compound annual growth rate.
The current tailwinds are favorable as the industry is benefiting from a rising interest in domestic holidays, as there has been a fundamental shift in vacationing, driven in part by Brexit and COVID. In the U.K., consumers are increasingly looking to buy easily accessible and affordable second homes in order to take more frequent trips closer to home and to take advantage of work-from-home flexibility. According to industry sources, the U.K. holiday park industry is an approximately GBP 5 billion market and is expected to grow approximately 6% annually from 2021 to 2025. Additionally, the sector benefits from a number of barriers to entry, given limited land availability and zoning restrictions. The U.K. market is highly fragmented and crying for consolidation, as platforms with 10 or more parks account for only 7% of the total market.
Over time, we intend to use this platform to continue to scale in the U.K. market just as we have done in the U.S. With that as the backdrop, after years of trying to find the right opportunity, we are excited to be entering the U.K. market with one of the leading owners and managers in the country. Park Holidays is the second-largest owner and operator of holiday parks in the U.K., with 40 owned and operated communities and an additional two managed communities. The majority of them are located in irreplaceable seaside locations in the South of England within a short drive of London and other affluent southern U.K. cities, making them highly desirable holiday destinations for a second home. The market is seeing a broadening appeal of buying these vacation homes, which has increased demand for the well-located, high-quality, and high-amenitized sites that Park Holidays owns.
Park Holidays has many parallels with Sun, such as its high-quality portfolio, its focus on growth, and a management approach that is consistent with ours. Led by industry veteran CEO Jeff Sills, Park Holidays has a 15-year history and a team of experienced industry executives with long tenures at the company. Park Holidays has created a strong brand given the quality of its communities and its stellar customer service. Their institutional quality platform of more than 15,000 sites is extremely well-located throughout the South of England. They are primarily along the coast, which benefits from significant demand concentration and supply constraints. Additionally, there are a number of barriers to entry, including limited land availability and zoning restrictions in these locations, further supporting ongoing favorable supply-demand dynamics.
Park Holidays business model provides for consistent cash flows with upside growth opportunities through rental rate increases, occupancy gains, home sales, conversion of the holiday guests into purchasers, and the development of expansion sites. Based on trailing 12-month income, 29% of gross profit came from site rental income, which have built-in escalators and provide a visible and predictable income stream. Over the past five years, they have achieved an average rental rate increase of 5.2%. 37% of gross profit came from vacation home sales, which is another source of strong cash flow and recurring revenue, both from new customers filling vacant sites and to existing customers through ongoing home upgrades and replacements. 34% of gross profit is from vacation holiday rentals and represents a steady stream of conversion opportunities, as 43% of all home buyers have previously been guests in these rentals.
Furthermore, the portfolio currently has approximately 2,400 zoned and entitled potential expansion sites, which will equate to a 16% increase in sites once delivered. The operations will continue to be led by Jeff and his highly experienced team, who have a clear and proven value creation playbook with the highest customer feedback and superior sales and marketing capabilities. Over its history, Park Holidays has executed on a very successful strategy of acquiring parks, efficiently integrating them into their platform, and creating significant value in a short period of time. Over 90% of all U.K. holiday parks are independently owned, and the Park Holidays team has significant industry knowledge, strong relationships with key players, providing an ideal platform to continue its growth through expansion of existing properties and potential acquisitions over time.
The acquisition, which is expected to be accretive in 2022 Core FFO, will represent approximately 7% of Sun's properties. For the 12 months ended September 30, 2021, Park Holidays generated GBP 74 million in EBITDA. In connection with the acquisition, the company entered into a commitment letter to lend the company up to GBP 950 million under a new senior unsecured bridge loan to fund the cash portion of the acquisition. The transaction is subject to customary closing conditions and required regulatory approval and is expected to close in the first quarter of 2022. Finally, as we have shown with our prior acquisitions, we expect the integration will go smoothly and allow us to maximize the embedded growth opportunity and provide a platform for additional potential growth over time. We're very excited about the pending transaction.
Thank you for joining us today and for your continued support, and I turn it back over to you, operator.
Thank you. There will be no questions on today's call. This ends the call. You may now disconnect.