British Land buys 17 Virgin Active clubs for £179 million

Published 08th Jul 2011

Property investor British Land (BLND.L) bought a portfolio of 17 freehold and leasehold Virgin Active VIRGI.UL premium racquet clubs from French bank Societe Generale (SOGN.PA) for 179 million pounds.

It said the clubs -- about half of them within London's M25 ringroad -- would be let to Virgin Active on new, 25-year leases, pending its acquisition of Esporta.

British Land said on Friday the price equated to a net initial yield of 7.3 percent, noting the portfolio would generate an initial annual net rental income of 13 million pounds.

Virgin Active, which is majority owned by Sir Richard Branson, is offering 77.5 million pounds to acquire a chain of Esporta gyms, which it will add to its own UK portfolio.

"While we remain focussed on our core retail and central London office markets, this acquisition demonstrates British Land's ability to work with banks to unlock opportunities to create incremental value," said British Land Chief Executive Chris Grigg in a statement.

Source: ' Reuters '

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