Deal announcement – Virgin Active

News: Investment News | 1 March 2015

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We are pleased to announce the acquisition of a purpose built health and fitness club located in the heart of Derby leased to Virgin Active. The operation is the third best financial performer out of Virgin Active’s 101 fitness and health clubs in the UK.

  • Investment date: February 2015
  • Investment size: £4.1m
  • Property advisers: Riverside Capital

The property has been acquired at £7.18m following the breakdown of a previous offer. Connection Capital and Riverside Capital stepped in at short notice to underwrite the deal at a discounted price for its clients on condition of a speedy completion.

Connection Capital clients were attracted to the deal because:

  • it was an opportunity to acquire at a discounted price
  • it was an opportunity to acquire an asset leased to a strong covenant in a rapidly growing sector
  • it offers a target annual distribution of 5%
  • the occupational lease has a sound income stream with a minimum fixed performance at exit
  • there is an opportunity for Virgin Active to extend the current lease, increasing the secured income on the asset

This deal follows the successful £5.49m forward funding of a Premier Inn and Brewers Fayre in Lincs. which completed in Q4 of 2014. Connection Capital also recently announced the sale of the O2 Academy in Birmingham which delivered an overall return of c60% in just over 2 years (c24% IRR) well ahead of the target investment term of 5 years.

“This is yet another great example of how Connection Capital helps people invest in high quality commercial properties in rapidly growing sectors as part of their diversified portfolio. With more and more people taking ownership of their investment decisions, Connection Capital offers a fully transparent, easy to use alternative to the traditional fund model.”- Steve Wilson, Partner