In excess of 25.75 years unexpired lease term, without breaks
Highly Secure Income - Let to Nuffield Health
Nuffield Health is the UK’s largest health charity
cpi-linked rent reviews
Tenant has committed to a new lease during covid-19
Modern purpose-built health & fitness club
£4,950,000, subject to contract
5.0% Net Initial Yield
Cwmbran is the first and only designated new town in South Wales, located approximately 225 km (140 miles) west of London, 48 km (30 miles) north-west of Bristol, 29 km (18 miles) north-east of Cardiff and 9 km (6 miles) north of Newport.
The town benefits from good road communications being situated 8 km (5 miles) north of Junctions 25a and 26 of the M4 Motorway. The town is connected to the national railway network with a fastest journey time of 2 hours 13 minutes to London Paddington, 40 minutes to Bristol and 10 minutes to Newport. Cardiff International Airport is located approximately 48 km (30 miles) to the south-west.
Since its designation as a new town, Cwmbran has grown and developed and is now a thriving location with nearly 50,000 inhabitants. Industry and employment has prospered in the town with Cwmbran having a solid manufacturing base, with particular strengths in engineering, together with automotive and electronic component manufacture. Llantarnam Park, to the south of the town centre is one of the region’s most prestigious industrial locations, home to a number of prominent companies such as Hempel, and Spear Europe (Source: ).
The property is accessed via Blaen Bran Close and is located immediately off Avondale Road. Cwmbran town centre is less than 1.6 km (1 mile) to the south and Cwmbran Rail Station is 0.8 km (0.5 miles) to the south. The A4042 which links directly with the M4 Motorway is approximately 1.6 km (1 mile) to the east.
The property is situated in a mixed use area comprising residential and commercial use. Surrounding occupiers include Ford, ats Euromaster and Cwmbran Rugby Club. The property benefits from being in an established residential neighbourhood, resulting in a strong catchment population for the health club.
The Grange University Hospital
In addition, the property is 3.2 km (2 miles) north-west of The Grange University Hospital, a newly constructed £360 million state-of-the-art facility. Officially opening in November 2020, ahead of its original opening date of March 2021, the hospital has been built on a 60-acre site and will provide emergency and urgent care, while bringing together services provided by the Royal Gwent Hospital in Newport and Nevill Hall Hospital in Abergavenny. The Grange will have 2,612 rooms and more than 40 specialist services supported by 3,000 staff. In addition to this significant inward investment being a major boost to Cwmbran and the local economy, the subject property could directly benefit from the hospital’s opening should medical professionals from The Grange refer patients to Nuffield Health for recovery and rehabilitation services.
The subject property comprises a high quality purpose built detached health and fitness club constructed in 2000, arranged over ground, first and second floors. The property is of steel portal frame construction with brick facing and profile clad finishes under a curved profile roof.
The property benefits from a full range of facilities including:
• Large open plan gym area
• Fitness studio
• 25 metre heated indoor swimming pool
• Hydrotherapy spa, steam room and sauna
• Spa treatment rooms
• Plunge pool
• Changing rooms
• Members bar and restaurant
Tenant’s works were carried out to the club in June 2012 including an upgrade of the shower rooms.
The property has been measured by bkr Floor Plans and provides the following Gross Internal Areas;
Ground Floor 1,490.95 sq m 16,049 sq ft
First Floor 998.02 sq m 10.743 sq ft
Second Floor (Plant) 144.00 sq m 1,550 sq ft
Total 2,632.97 sq m 28,342 sq ft
The property benefits from 151 surface car parking spaces.
A set of floor plans is available to download and the measured survey report can be re-addressed to a purchaser.
We estimate the site area to be approximately 0.71 hectares (1.76 acres).
An Environmental Desk Study was carried out by wsp in May 2015. The report concluded that the site presents a low/medium risk for continued use for commercial purposes. A copy of this report is available to download.
The property is let to Nuffield Health on a Full Repairing and Insuring lease for a term expiring on 19th December 2046. Therefore, in excess of 25.75 years unexpired lease term with no breaks.
The current passing rent is £263,912 per annum (£100.23 per sq m / £9.31 per sq ft). The lease benefits from cpi-linked rent reviews on 25th June 2025 and five yearly thereafter, subject to a minimum increase of 1% and a maximum increase of 3% compounded annually.
The property was let until 19th December 2036. In September 2020 the tenant entered into a new lease extending its term for a further 10 years from 20th December 2036, expiring on 19th December 2046.
The fact that the tenant has extended their lease during covid-19 demonstrates their desire to remain in the property.
As part of entering into the new lease, the tenant benefits from a rent-free period consisting of four months and then half-rent commencing 29 September 2020 until and including 28th May 2023. The vendor will “top-up” the income by an appropriate adjustment on the completion sum in order that a purchaser does not suffer an income shortfall.
The property was originally let to Esporta Health & Fitness for a term of 25 years from 24th June 2000, expiring 23rd June 2025. Following Virgin Active’s acquisition of Esporta, the lease was assigned to Virgin Active Limited in December 2011, with surety from Virgin Active Holdings Limited and Virgin Active Group Limited, and a reversionary lease entered into from 24th June 2025, expiring 19th December 2036.
In June 2016 Virgin Active agreed to sell 35 UK clubs to Nuffield Health. As a result, on 13th July 2016 the lease was assigned to Nuffield Health.
The current passing rent of £263,912 per annum reflects a rate of £100.23 per sq m (£9.31 per sq ft) overall. From our enquiries it would appear that this rent compares favourably to other health and fitness clubs across the United Kingdom:
Address Sq M Sq Ft Passing Rent
Nuffield Health, The Pentagon, Derby 4,294 46,221 £125.76 per sq m / £11.68 per sq ft
Nuffield Health, Taunton 2,095 22,560 £122.55 per sq m / £11.38 per sq ft
Nuffield Health, Perdiswell Park, Worcester 2,322 24,995 £115.31 per sq m / £10.71 per sq ft
Nuffield Health, Aylesbury 2,366 25,486 £109.89 per sq m / £10.20 per sq ft
Nuffield Health (Charity Number 205533) is the largest health charity in the United Kingdom and has reported the following figures for the year ending 31st December 2019:
Net Assets £38,500,000
2019 saw Nuffield Health deliver an adjusted ebitda of £99.5 million.
Whilst the leisure / gym sector has been impacted by covid-19, Nuffield is unique and sets itself apart from other operators by offering a wide-range of services in addition to its fitness and wellbeing clubs. The charity also has 31 hospitals, healthcare clinics and over 200 workplace wellbeing services. Revenue from hospital services was £621.8m, a £39.2m increase against 2018.
As the UK’s health industry continues to grow, Covid-19 has further highlighted the importance of preventative healthcare. During 2019, Nuffield Health saw an increasing demand for services in their hospitals, fitness and wellbeing clubs, and in the workplace. Around 50,000 nhs patients were referred to the charity’s hospitals for treatment.
The number of people taking responsibility for their own health and wellbeing has grown and this is expected to rise following Covid-19. Membership of Nuffield’s fitness and wellbeing clubs increased to 360,000 in 2019, an all-time high. The Group has 153 corporate fitness and wellbeing sites, and work with over 1,600 employers. Preventative health continues to be the focus through their ‘Meet the Experts’ events, health MOTs, research and their holistic approach to healthcare.
With the current strain on the nhs, it is anticipated that the role of independent healthcare providers such as Nuffield Health will become even more critical as we go forward.
During 2019 the charity reached more than 1.55 million people, an increase of 20,000 over 2018. The wellbeing business generated £367.7 million which was an increase of £8.6 million against 2018. Consumer fitness turnover increased £11.8 million to £270.7 million as the business continued to drive membership, which closed the year above 360,000 members.
Nuffield Health is a not-for-profit organisation, reinvesting all profit in their gyms, medical centres, hospitals and staff. Their charitable purpose is to advance, promote and maintain health and healthcare of all descriptions and to prevent, relieve and cure sickness and ill health of any kind, all for the public benefit.
For the last 60 years, Nuffield Health’s experts have been working together to make the nation fitter and healthier and have been doing this through day-to-day services in their family of 31 award-winning hospitals, 112 fitness and wellbeing clubs, healthcare clinics, and over 200 workplace wellbeing services, and through their flagship programmes to support communities by widening access.
What makes the charity unique is its breadth of expertise to provide connected care spanning from personal training and health MOTs to supporting people on their fitness journeys, helping patients recover with physiotherapy or emotional wellbeing counselling, or providing hospital treatments for illness and serious conditions like arthritis or cancer ().
The property has been elected for VAT. It is anticipated that the sale will be treated as a Transfer of a Going Concern (togc).
Our client is seeking offers in excess of £4,950,000 (Four Million, Nine Hundred and Fifty Thousand Pounds), subject to contract, reflecting a net initial yield of 5.0%, assuming purchasers’ costs of 7.37%.
Please note that a purchaser will be re-charged the costs of the searches which are provided in the data room.
Please note a purchaser will be charged a Transaction Fee of £20,000 + VAT.
An opportunity to acquire a freehold health and fitness club investment;
Long unexpired lease term in excess of 25.75 years with no breaks;
Secure income – let to Nuffield Health, the largest health charity in the UK;
The lease benefits from cpi-linked rent reviews;
Low base rent of £263,912 per annum (£9.31 per sq ft);
Modern purpose built health & fitness club on a 1.76 acre site with 151 car parking spaces;
A purchase at the asking price will provide an investor with an attractive net initial yield for a highly secure freehold investment;
For full details please visit our website or view PDF brochure below
* Sizes listed are approximations. Please contact the agent to verify actual sizes.