Premium Fitness Chain Third Space Poised for Major £700m Sale
The owner of Third Space, the upscale London health and fitness club operator, is preparing for a significant sale that could value the business at around £700 million. Sky News has learned that KSL Capital Partners, the American private equity firm, has initiated discussions with prospective advisers regarding an auction process expected to commence either later this year or in early 2027.
Investment Banks in Frame for Advisory Roles
City sources indicate that several prominent investment banks, including Goldman Sachs, are being considered to oversee the sale process. This move follows KSL's acquisition of a majority stake in Third Space from Encore Capital in 2021, positioning the private equity firm to capitalise on the brand's strong market performance.
Third Space operates fifteen premium clubs across London, with notable locations in the City and Soho districts. The chain has established itself at the luxury end of the fitness market, offering exclusive amenities including HYROX training facilities, hot yoga studios, and dozens of specialised fitness classes for its membership base.
Strong Financial Performance and Expansion Plans
The potential sale comes amid robust financial performance for the luxury gym operator. Last October, Third Space secured £75 million in debt financing from Oaknorth, alongside existing lender Searchlight Capital, to support its expansion strategy across the capital.
Colin Waggett, Chief Executive of Third Space, highlighted the company's strong market position last autumn, stating: "We are seeing exceptionally strong demand for Third Space memberships, with most of our clubs operating with waiting lists. Our business sits at the heart of Londoners' desire for health and fitness, authentic experiences and luxury service, and Third Space is uniquely positioned to meet these demands."
This sustained demand for premium fitness experiences has contributed to the substantial valuation being discussed for the business sale. The luxury health club sector has demonstrated resilience and growth despite broader economic challenges, with consumers continuing to prioritise high-end wellness services.
Private Equity Investment and Market Positioning
KSL Capital Partners' potential exit through a £700 million sale represents a significant development in the private equity investment landscape within the UK fitness sector. The firm's 2021 acquisition positioned Third Space for substantial growth, with the current sale process expected to attract considerable interest from both domestic and international investors.
Representatives from both KSL Capital Partners and Goldman Sachs have declined to comment on the ongoing discussions regarding the potential sale. The auction process, when formally launched, is anticipated to generate competitive bidding for one of London's most prominent luxury fitness operators.
The timing of the proposed sale aligns with continued strength in the premium fitness market, where operators offering differentiated experiences and luxury amenities have maintained strong membership retention and growth despite broader economic pressures affecting consumer discretionary spending.
