British Land sale of five Virgin Active clubs for £33 million (UK)

British Land announces that it has sold five of the Virgin Active premium racquet clubs it bought in July 2011. The disposal price of £33 million (approx. €40.5 million) represents an average net initial yield of 6.5%.

The 17 asset Virgin Active portfolio was acquired in July 2011 from Societe Generale for £179 million, at an average net initial yield of 7.5% and a net equivalent yield of 8.4%. The properties are on 25 year leases with a fixed uplift at year five, followed by annual RPI uplifts of between 1-4% per annum for the remainder of the lease term.

The clubs in Gloucester, Neath, Manchester, Oxford and Poole have been sold to three institutional buyers. These five clubs are among the smallest in the portfolio and with the exception of Oxford, are located outside the South East. British Land now holds a core portfolio of 12 premium racquet clubs of which over 85% (by value) are located in the South East and over 50% within the M25.

Charles Maudsley, Head of Retail for British Land, said: "I am pleased with the level of institutional demand we have seen for these assets. This reflects the high quality of the assets and demonstrates our ability to work successfully with banks and other sellers to unlock opportunities and create incremental value for our shareholders."

Lewis & Partners acted for British Land.

Source: FTI Consulting

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