Riverside Capital acquires top performing Virgin health and fitness club

Property investment and asset management company, Riverside Capital, together with its private equity partners, Connection Capital, today announce the acquisition of a purpose-built Virgin Active health and fitness club located in the heart of Derby.

The opportunity to acquire the property was introduced by Riverside Capital to Connection Capital – investor network, which comprises more than 750 private investors and family offices.

The property is leased to Virgin Active and is the third best financial performer out of Virgin Active – 101 fitness and health clubs in the UK.

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

Riverside Capital introduced the deal on the back of the following factors:

  • the opportunity to acquire at a discounted price;
  • the opportunity to acquire a short-term performance deal leased to a strong covenant in a rapidly growing sector;
  • the occupational lease has a sound income stream with a minimum fixed performance at rent review;
  • As a top three Virgin Active performer there may be an opportunity to extend the current lease, increasing the length of the secured income on the asset;
  • a target annual distribution of 5%.

Last month the Riverside Capital / Connection Capital joint venture announced the sale of O2 Academy in Birmingham which delivered its clients an overall return of 60% in just over 2 years (24% IRR). The exit was achieved well ahead of the target investment term of 5 years.

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