Central London Gym Market Review 2017 - Colliers International
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Central London
Gym Market Review
2017
Colliers International | Central London Gym Market Review 2017 1
UNPRECEDENTED The gym market is booming, driven by rapid growth at the low cost end of the market, popularity of
studio concepts with flexible memberships and new operators with ambitious expansion plans.
GROWTH This competition for sites, particularly in Central London, is not only driving rental growth, but also
necessitating broader property searches considering less conforming units. Furthermore, a rise in the
––Central London gym market popularity of athleisure wear and clean eating have led many gyms and studios to dedicate space to
is diversifying secondary spends such as juice bars (e.g. Psycle, Mortimer Street and 1 Rebel) or retail collaborations.
––Operators taking a variety of space
Definitions
––Further space being dedicated to
secondary spends MONTHLY EXAMPLE
FACILITIES
MEMBERSHIP OPERATORS
Gym & studio (limited Pure Gym,
BUDGET
THE LONDON The Central London gym market remains
dominated by mid-market operators in terms
The budget gym market in London remains
incredibly nascent, with 46% of the clubs in this
MARKET
of both the number of clubs and the amount segment only opening in 2016. Similarly, 26% of
of floorspace. Whilst luxury concepts account the studio concepts in the capital are new and
for only 10% of the gyms in the capital, they looking back before 2014 there were very few
–– Growth in budget and represent 22% of the total floorspace as a result such operations. The first Barry’s Bootcamp
of the larger units that are needed to house the opened in February 2013 and Boom Cycle led
studio segments
swimming pools, studios and specialist facilities the way for the spin studios, first opening in
–– Rents highest for studios and including climbing walls, hypoxic chambers and Shoreditch in 2013.
bespoke laundry & ironing services that set these
luxury gyms This change in market composition has
clubs apart.
implications for the types of properties that can
–– Office basements could be utilised to
Conversely, studio concepts now make up 21% of now be considered for fitness concepts. Smaller
provide new gym space clubs, but with an average size of 4,556 sq ft, due units of 3,000 to 5,000 sq ft near transport hubs
to their compact formats, only contribute 6% of are ideal for studio concepts, but competition with
London’s total gym space. Significant expansion by other uses results in higher rents. In fact, analysis
Pure Gym, through the acquisition of LA Fitness, of our rental database found that studio concepts
Anti-gravity yoga at The Virgin Active Collection
moved ten London gyms across from Mid-Market are paying twice the average rents of mid-market
to Budget, which when added to The Gym gym operators at £27.80 psf vs £13.40 psf.
Group’s acquisition of four Fitness First units and
aggressive organic new openings from Anytime The £2.48 psf gap between the rents paid by mid-
Fitness, means one in every five clubs are now market and budget operators is likely a result of In spite of requiring the largest space, luxury gyms capital is below the ground, compared to only 20%
run by low cost operators. the recent deals at the low cost end of the market are also paying higher rents - on average £21.56 of the Third Space estate and 29% of Soho Gyms.
and implies rental growth should feed through to psf. This is driven by the scarcity of suitable space
mid-market clubs through rent reviews over the in Central London for these sorts of operations, With rental growth in the gyms market and
next couple of years. as well as the comparatively expensive locations anticipated supply constraints, more landlords
of these clubs in areas such as Kensington and could consider using the basements of their office
Marylebone. However, with membership fees in buildings for fitness concepts as a means of
Number of Floorspace delivering much needed future floorspace, deriving
10% 6% excess of £135/month as a result of their superior
Gyms by Breakdown by long term income (owing to the 15-20 year leases
facilities, these clubs are also better placed to
Category 20% Category available) and providing a further offer
22% afford these higher rents and outbid others on
17%
competitive units. for workers.
The proportion of basement space may also have
AVERAGE RENTS BY CLUB TYPE
a role to play in rental values. Again, breaking
down by gym type reveals some great diversity
STUDIO BUDGET
21% in the proportion of space beneath the ground
£27.80 psf £15.88 psf
that each type of operator will accept. Only 35%
of studio space is underground, whereas 54% of
49% mid-market gym space is at basement level. MID MARKET LUXURY
55% £13.40 psf £21.56 psf
At an operator level, there is even greater
diversity. 82% of the Fitness First space in the Source: Colliers International
Budget Mid Market Luxury Studio
4 Central London Gym Market Review 2017 | Colliers International Colliers International | Central London Gym Market Review 2017 5
NUMBER OF GYMS
KING’S CROSS
AVERAGE MONTHLY COST
7 GYMS Ratio of workers: gyms
> 30,000
£39/MONTH ALDGATE
Potential for new gyms
FARRINGDON
6 GYMS
BLOOMSBURY Ratio of workers: gyms
8 GYMS £65/MONTH
22,000 – 30,000
SHOREDITCH
3 GYMS £61/MONTH
5 GYMS
£44/MONTH CITY CORE £66/MONTH Ratio of workers: gyms
HOLBORN
< 22,000
5 GYMS
30 GYMS
£50/MONTH
COVENT
£73/MONTH
GARDEN DOCKLANDS
9 GYMS
£61/MONTH
SOUTHBANK
9 GYMS 4 GYMS
£58/MONTH £93/MONTH
LOOKING
5 GYMS There are already a number of new gyms in the million for future openings has injected a new
£53/MONTH pipeline for 2017 and the majority of these are dynamism to the gyms market. This increasingly
VICTORIA/
FORWARD
WESTMINSTER
planned for areas in which we have identified competitive environment is necessitating
significant latent demand. In Shoreditch, openings greater differentiation and investment in studios
from PureGym (expected early 2017) and Equinox and facilities, particularly as more flexible
––Skill learning concepts e.g (opening as part of The Stage in 2019) will not memberships, pay-to-train and options such as
SCOPE FOR Membership fees continue to account for the
majority of gym revenues meaning that attracting
The analysis looked at how each of the London
office sub-markets compared to this benchmark boxing and barre are likely to be only reduce current pressure on gyms in the area,
but also diversify the offer by providing the first
Class Pass, mean loyalty is no longer guaranteed
through lengthy fixed contracts.
major trends
NEW OPENINGS
sufficient members is critical to gym success. based on current provision. The office
budget and luxury concepts.
Whilst outside of Central London this means development pipeline is used as a proxy to project An improved ability to move between providers or
having a significant residential population within a the number of workers to 2018, which then gives ––Insufficient provision and future Similarly, the opening of BXR in Marylebone, use multiple studios means customer expectations
––c. 25,000 worker catchment short distance of your gym, in the capital the key is a resultant view on the number of additional gyms market growth make clear case backed by IBF Heavyweight World Champion have risen and clubs must provide a tailored
should support membership levels locating in areas with a high density of workers. each area could support over the next two years, for investment Anthony Joshua (cover image: Scott Heavey), experience, expertise on hand and state-of-the-
based on both the existing gap and new workers. will combine pay-to-train and luxury membership art facilities in an appealing environment. Existing
––Research suggests scope for at
As a result, using a ratio of workers per gym ––Vibrant occupier market should concepts in a 12,000 sq ft glass fronted unit, also players such as Virgin Active have responded
can provide a powerful metric for assessing the Overall, we found Central London could support a drive rental growth
least 31 new London gyms current gym provision in an area and identifying net increase of 31 gyms to reach the benchmark
featuring an in-house clinic and Joe & The Juice by upgrading ten clubs to its Virgin Active
for members. Again, this will both meet latent Collection format and are actively seeking further
any potential gaps for further clubs. Based on workers per gym, with 12 of the 20 sub-markets
––The top 3 locations with additional demand in the area and broaden the fitness offer representation for this concept.
12.2% of the adult population (18-70) being showing an under-supply. In fact, this metric is
gym potential are (no. gyms): members of a gym (Sources: Mintel, Experian) likely to under-estimate potential, given many of
for Marylebone, where the only studio is currently
Xtend Barre. With further openings from 1Rebel With current provision insufficient to meet demand
- Farringdon (10) and 3000 members per club, our figures estimate these sub-markets will also have a significant
and Kobox also planned for 2017, we anticipate in many parts of Central London, forecast growth
- Shoreditch (6) a catchment of around 24,600 workers would be residential element to demand (e.g. Chelsea,
boxing concepts to be a major trend over the of £0.5bn by 2021 (Mintel) and the health and
- Victoria/Westminster (5) needed to support a traditional gym. We estimate a Kensington). It is also possible that the proportion fitness agenda continuing to gather pace, there
coming year.
studio concept, given the lower cost base, could be of adults with gym memberships is higher in is clear justification for investment in gyms and
supported by a catchment of around half this size. Central London than for the UK as a whole, owing The constant stream of new concepts and facilities. This vibrant occupier market makes a
to the generally younger demographic. ambitious expansion plans from the likes of compelling case for healthy rental growth ahead in
Gymbox, who have just raised a further £39 the Central London gym market.
6 Central London Gym Market Review 2017 | Colliers International Colliers International | Central London Gym Market Review 2017 7
The Colliers International specialist Leisure Agency and Lease Advisory
teams provide market leading services across the diverse London Health
& Fitness sector.
For more details on our services, please contact us below:
CONTACT US Lease Advisory
Dan Taylor
Head of Retail & Leisure Lease Advisory
+44 20 7344 6871
dan.taylor@colliers.com
Agency & Development
Ross Kirton
Head of UK Leisure Agency
+44 20 7487 1615
ross.kirton@colliers.com
Research and Forecasting
Jess Ford
Senior Research Analyst Retail & Leisure
+44 20 7344 6814
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