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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