In October 2017 we sold a central London commercial property, which was tenanted by gym operator Pure Gym, doubling our clients money in four years.
The property in the ‘Nine Elms’ area of London’s South Bank, one of the capital’s most important regeneration projects of recent years, was purchased for £2.55 million in 2013. It was sold for £4.35 million to real estate investment trust AEW UK Long Lease REIT Plc.
This investment generated an 18% internal rate of return (IRR) for Connections Capital’s private investor clients – or 2x their original investment, significantly exceeding original returns forecasts. The 19,800 square foot property on Wandsworth Road, Vauxhall, was newly built on the former site of Southbank University. It occupies the ground floor and basement of a residential and commercial development, and is ideally situated next to a Tesco Metro supermarket. It was let to Pure Gym, one of the UK’s leading no-frills gym operators, giving it a strong and improving tenant covenant, on a 20-year lease with five yearly, RPI-linked rent reviews. The investment provided annual net income distributions of 5%.
As always, our clients were able to invest in tranches of £25,000.