Virgin Active, Humberston

Property: Virgin Active, Humberston Avenue, Grimsby

Client: Private Investor

Instruction: Investment Purchase

Chase & Partners have successfully advised a private investor client on the acquisition of the Virgin Active Humberston Country Club in Grimsby from Standard Life Investments.

Humberston Country Club comprises a health and fitness club with associated facilities including a 9-hole golf course, bowling green and tennis courts, on a site which extends to approximately 36.7 acres. The property is let to Virgin Active Ltd on a full repairing and insuring lease, for a term of 35 years from 28 November 2003, subject to a tenant only option to break after 25 years. The rent passing is £175,000 per annum with future reviews to the higher of fixed increases or based on RPI.

The purchase price of £2,700,000 produces a net initial yield of 6.13% and an equivalent yield of 8.19% based on the minimum fixed increases.

Chase & Partners’ recommended this acquisition, given its manageable lot size, the strong brand and covenant of Virgin Active Ltd, with a long unexpired term (minimum 17 years) and the guaranteed rental uplifts producing an attractive yield profile. For the long term the 36.7 acre site has future development potential, which our planning team is currently investigating.