Backed by KSL Capital Partners, OakNorth has provided a £75 million leveraged finance loan to premium UK fitness and wellness operator, Third Space.

OakNorth previously supported the company’s development of five new clubs under the original funding round in 2023. This new facility refinances a portion of the existing capital structure and provides a £25 million capex facility to support Third Space’s expansion into new locations, including Oxford Street, Queen’s Park and Chelsea among others.

This is OakNorth’s largest leveraged finance loan to date, displaying its confidence in the London collection of 13 health clubs which has more than 42,000 members and has seen revenues increase by more than 90 per cent since 2022.

Going forward, Third Space has plans to expand in key residential and business locations across London.

Colin Waggett, CEO of Third Space, says: “This transaction marks another important milestone for Third Space as we scale across London. OakNorth has been a consistently supportive and engaged partner – quick to understand our model, agile in execution, and committed to our long-term vision. With their support, we’re well-positioned to bring the Third Space experience to even more communities.”

Deepesh Thakrar, managing director of debt finance at OakNorth, says: “We backed Third Space in 2023 based on the strength of the management team, brand and strategy and they've since exceeded every benchmark with waiting lists at every one of their sites.

“Revenue, EBITDA, and member growth have all outpaced expectations, while maintaining premium service standards and disciplined capital deployment. With several new sites under construction, Third Space continues to differentiate through high-spec fit-outs, dynamic class programming and flexible membership structures designed for a discerning, urban clientele. We're excited to deepen our partnership and support the next phase of expansion with this facility.”

Martin Edsinger, partner at KSL Capital Partners, said: “Third Space is the best-in-class operator in the fitness and wellness space in London, with an outstanding management team that has built a truly unique premium brand.

“The market is clearly very buoyant as demonstrated by continued consumer spend on health and fitness, at both the value and premium ends of the market. With strong structural tailwinds supporting growth in health, wellness, and fitness, Third Space is exceptionally well positioned to continue its growth trajectory.”

As well as creating beautiful clubs, Third Space has a reputation for being early adopters and raising standards. Recent innovations include the dedicated Hyrox studio and Recovery Spa at its Canary Wharf site and the new Performance Lab at its Mayfair site.

OakNorth is a digital bank focused on serving and empowering businesses with £1m-£100m in turnover that are seeking to scale but are routinely underserved or overlooked by traditional banks. It has provided US$18 billion to these businesses across a wide range of sectors.