The latest Leisure DB report (State of the UK Fitness Industry, 2017) highlights the continued growth of the fitness sector with an 8.5% increase in health club memberships over the last 12 months. 

The coming year is also expected to see a raft of successful exits for investors in David Lloyd Leisure, Pure Gym and Gymbox, to name a few, both by IPO and sale to financial buyers. After tough years in 2008-2014 when it seemed difficult for private equity owners to generate value in a seemingly congested sector, we seem to be marking a return to success for the clear winners in the different segments of the market. 

Many would argue that it's the growth of the budget gym segment that has reinvigorated the market, increasing penetration rates from new members. However, over time, these members often naturally trade up to middle market and even luxury gyms when the desire to access spa facilities, or even tennis courts, is an added appeal to the core cardio and weight training equipment. This "journey" is likely to change the fitness landscape over the medium term.

Whatever the cause of the growth in the sector, memberships are growing, profits are rising and the losers have been absorbed by the winners.

There is still capacity in the total number of UK units: much of this will come in the budget sector, whilst further consolidation by the bigger players will underpin their future profit growth. So I expect a renewed focus on the whole sector this year as investors eye up strong returns from a happier, stronger, altogether fitter asset class.