Established Birmingham live music venue the O2 Academy has been sold in a £2.15 million deal
Connection Capital and Riverside Capital completed the acquisition of the city centre establishment which hosts three separate venues under one roof.
The 32,500 square feet venue is capable of holding more than 3,800 people and is currently let to Hospitality Holdings, a wholly owned subsidiary of the Compass Group PLC, which provides a full parent company guarantee on the property.
The property is sub-let to Academy Music Group, an owner and operator of live music and club venues across the country. The lease and sub lease have more than 22 years remaining.
Connection Capital clients and Riverside Capital have invested £1.30 million with Santander providing a five-year loan facility.
Claire Madden, founding partner at Connection Capital said: “The O2 Academy is a well-known and prominent entertainment venue in a sector poised for growth.
“This is an excellent investment for our clients particularly as there is significant rental growth potential backed by the lease guarantee of a FTSE 100 company.”
Connection Capital is a private client investment business launched in 2010, which allows individuals to build a broad portfolio of direct private equity investments.
The business provides investors with a managed service whereby clients have the ability to invest on a deal by basis as part of an organised syndicate.
Since its launch more than 650 investors with a net worth of over £3 billion have become clients and it has £135 million of funds under management.
Ms Madden added: “What we do is bring together our client base - mainly high net wealth individuals - typically commercial property assets of this ilk.
“The syndicate in this one was about 30 strong. We do everything in modules of £25,000, so an individual could have invested and had a slice of the O2 Academy for £25,000.
“As an investment for our investors it is quite attractive as there is quite a long time to run on the lease
“What our clients also like to see is the underlying generator in the business being of good financial standing
“The combination of these things meant this property was very attractive.”
Ms Madden said deals such as the O2 Academy one tended to be too small for institutional investors and “too big and complicated” for an individual to buy but were “the “right size” for a niche operator like Connection Capital.