06 Aug 2021
KSL acquires majority stake in Third Space ahead of 'substantial expansion'
BY Tom Walker
KSL Capital Partners has acquired a majority interest in luxury health club operator Third Space from Encore Capital, who originally invested in the company in 2010.
The financial terms of the transaction were not disclosed, but Encore Capital will remain a significant investor in Third Space.
Launched in 2001, Third Space currently operates a portfolio of six clubs.
The move comes as the operator has secured a substantial pipeline of new sites and plans to expand its estate across London.
Confirmed new openings include a seventh site, set to open in late 2021, at the heart of Mayfair at Number One Curzon St.
In addition to new clubs, the company plans to continue to develop its brand outside of the traditional club environment, both digitally and "in new settings".
Colin Waggett, CEO of Third Space, said, “KSL’s reputation and experience as a global investor in leisure, combined with Encore’s deep understanding of the London market, makes for an exciting new chapter for Third Space, with significant opportunities.
"We're recovering swiftly from the pandemic, with members prioritising their fitness more than ever.
"Our clubs provide exactly the sort of environment in which people feel both safe and inspired.
"Our brand has never been in more demand from landlords looking to differentiate their developments, and we're excited at the prospect of taking Third Space to more parts of London.
"We have a committed investor in Encore and with the addition of KSL, we are uniquely placed to capitalise on these opportunities.”
Martin Edsinger, Principal at KSL, said: “Third Space’s mission and growth plan align perfectly with KSL's long history of investing in differentiated, experiential hospitality and wellness brands that are committed to people and community impact.
"We're privileged to partner with an exceptional management team with such a strong operational foundation, as well as Encore Capital’s unique London knowledge. We look forward to helping Third Space grow in new and existing markets."
KSL has been one of the most active investors in the global wellness and leisure sector, with a roster of premium brands passing through its portfolio, from Espa to several Aman resorts and from Whistler Blackcomb to the Salamander Resort and Spa.
KSL's deep knowledge of the global spa and wellness, resort and hotel markets means we're likely to see Third Space heading into this territory at some point.
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