British Land Sale of Five Virgin Active Clubs for £33 million
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 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 7.3% 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.
Sally Jones, British Land 020 7467 2942
Pip Wood, British Land 020 7467 2942
Gordon Simpson, Finsbury Group 020 7251 3801
Jackie Whitaker, British Land 020 7467 3449
Emma Hammond, FTI Consulting 020 7269 9347
Notes to Editors
About British Land
British Land is one of Europe's largest Real Estate Investment Trusts (REITs) with total assets, owned or managed, of £15.7 billion (British Land share £10.3 billion), as valued at 31 December 2011. Through our property and finance expertise we attract experienced partners to create properties and environments which are home to over 1,000 different organisations and visited by over 250 million people each year. Our property portfolio is focused on prime retail locations and Central London offices which attract high quality occupiers committed to long leases. Our occupancy rate of 98% and average lease length to first break of 12 years are among the highest of the major UK REITs.
Retail assets account for 61% of our portfolio, over 80% of which are located at prime out-of-town sites. Comprising around 27 million sq ft of retail space across 91 retail warehouse properties, 99 superstores, 11 shopping centres and 10 department stores, the retail portfolio is generally modern, flexible and adaptable to a wide range of formats. Active asset management delivers attractive space to both retailers and consumers.
London offices, located in the City and West End, comprise 33% of the portfolio (rising to an estimated 38% on completion of current developments) with 7 million sq ft of office space including Broadgate, the premier City office campus (50% share) and Regent's Place in the West End. We have committed £1.1 billion to create Central London's largest committed office development programme which will deliver 2.2 million sq ft of high quality space by 2014, including a 700,000 sq ft building at 5 Broadgate, the 610,000 sq ft Leadenhall Building in London's insurance district and a 500,000 sq ft mixed office and residential scheme at Regent's Place in the West End.
Our size and substance demands a responsible approach to business and we focus on five areas which matter most to us and our key stakeholders: managing buildings efficiently; developing sustainable buildings; enhancing biodiversity; exceeding customers' expectations and focusing on local communities. We believe leadership on issues such as sustainability helps drive our performance and is core to our corporate aim of building the best REIT in Europe.
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