British Land buys Virgin Active clubs in £179m deal

Property investor British Land bought a portfolio of 17 freehold and leasehold Virgin Active premium racquet clubs from French bank Societe Generale for £179m.

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 per cent, noting the portfolio would generate an initial annual net rental income of £13m

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

"While we remain focused 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