Competitive Socialising - Emerging Concepts in Leisure - The Leisure Property Forum - Savills
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UK Retail & Leisure – Winter 2019
REPORT
Savills Research
Competitive Socialising
& Emerging Concepts in Leisure
In association with
The Leisure Property Forum
Competitive Socialising & Emerging Leisure Concepts
Competitive Socialising
has had a lot of press coverage in
the last 18 months, but what is it
and what brands does it cover?
Savills has collaborated with the
Leisure Property Forum (LPF)
on this very issue because we
agreed that a comprehensive
review was needed of the latest
emerging leisure trends.
There are a number of formats
and we accepted early in this
process that a definition of
Competitive Socialising that had
full consensus from the market
would be hard to reach. In
undertaking this review Savills &
LPF have assessed four
submarkets and identified over
50 mini golf, 90 bar&game, 50
VR, and 145 'Against-the-clock'
experiences (escape room) in
locations across the country. Flight Club, London
The reality is that these numbers
will be quickly outdated.
In this fast paced sector we are Benefits of Competitive Socialising
seeing an increase in venues in
prominent leisure schemes and
An offer that is good for landlord, tenants and consumers?
shopping centres. The highly
1 4 7
fragmented nature of this sector
means that operators need only
Significantly Good Provides a safe
a handful of sites to become a increases dwell experiences boost to the
genuine contender as a national
brand. time and extends increase loyalty evening economy
The growth across all of the
competitive socialising market is customer reach
5 8
a good counter narrative to other
parts of the market and while
Social media Supports and
2
some concepts have been
around for decades it is clear
Brings people and marketing is supported
that the growth we are
together presence as by other F&B and
witnessing now is closely tied to
advances in technology and socially and creates visitors share their leisure operators
consumer preferences.
footfall experiences located close by
Tom Whittington
Director
Retail & Leisure Research
3 Atmosphere
and buzz
improves the overall
6 Increased F&B
sales enhance
income and rent
9 Helps diversify
offer and
income within
Savills
0161 244 7779 offer in the venue affordability locations
twhittington@savills.com
savills.com/research 1
Competitive Socialising & Emerging Leisure Concepts
The highly fragmented nature of this sector means that
operators need only a handful of sites to become a genuine
contender as a national brand.
REPORT
CONTENTS
Benefits
& Market
Context
page 1 & 2
Bounce, London
Urban Mini
Golf
Market Context
Consumer change and technological development are driving growth
page 3 & 4
The UK proposition Drivers for change Diversification vs specialisation
There has been much discussion So what is driving these brands This market is likely to quickly
around competitive socialising, forward and why now? Consumers become congested. We’re starting
but what is it? Does it include are quickly evolving their wants to see growth in specialist
family leisure, or is just related to a and needs and while this is operators who look to provide a
Bar & wet-led offer. Arguably it includes contributing to challenges in world class concepts that will keep
Game any venue or occasion that brings the retail sector, it is seeing a them ahead of the competition.
page 5 & 6 people together to play a game. diversion of spend to leisure, now However, reserving an element
In order to provide some focus accounting for 14.3% of consumer of flexibility around formats
to this report, we have avoided spend. Millennials are reported to is important too. Brands and
including long established brands be spending less on products and schemes that have the opportunity
and instead focus on concepts more on on-demand experiences to diversify their offer, either
Virtual that have only emerged relatively and the memories they create. through F&B, or a range of
Reality recently. In fact, this trend is likely to different games/experiences are
& Gaming actually be typical across most likely to enhance their chance of
The market is diverse and demographic groups and there is success.
page 7 & 8 fragmented, with a large number little doubt from the increase in
of independents and operators leisure brands that participation is These trends have not gone
pushing to become a brand. We up across the country. unnoticed by existing leisure
have identified 170 operators, 340 operators. Namco Funscape
Against- locations, and just 3 brands with This increase in demand is being already have a foothold in various
the-clock more than 10 sites. While London met by a stream of entrepreneurs shopping centres and leisure
tends to lead the UK with new who have the energy and schemes across the country and
Experiences leisure trends, the current suite creativeness to build a brand, are able to reconfigure their large
page 9 & 10 of emerging brands are truly UK and advances in social media and units to trial new formats and keep
wide. It’s an exciting area and technology that are driving new the offer fresh. In several schemes
truly entrepreneurial. concepts forward in a way that they are now offering an escape
wasn’t previously possible. room and VR concepts.
Landlord’s Up to 12 months ago expansion
had been slow, with operators Competitive socialising is on one In more wet-led locations, brands
Perspective being reluctant to take on hand counter-culture to people’s like Lane 7 and Roxy Ballroom
page 11 & 12 too much debt through over lives going online as it brings are bringing together different
expansion, but this doesn’t mean people together socially into the competitive socialising and bar
that brands lack an appetite for real world, but on the other hand game formats under one roof in
growth. 2018 saw the market it provides exactly the kinds of order to be able to provide a full
turn a corner, with several experiences that people love to evenings’ entertainment and thus
brands looking to expand more share on social media. extending dwell times.
Hot Issues & aggressively. Immotion VR
Top Cities opened 10 sites, 8 brands opened There is no doubt that this is an In the future will we see ‘mega
mini golf courses and 20 escape exciting growth area, but is this brands’ that can flex the offer and
page 13 & 14 rooms opened in shopping centres a temporary phenomenon, will evolve with trends? Grosvenor
and leisure schemes. Speaking it become saturated and what Casino’s have recently agreed
to operators it is clear that this place does this new offer have in a tie in with Immotion VR and
trajectory will continue for at least institutional landlord spaces (i.e. Hollywood Bowl are introducing
the next few years. off the high street)? mini golf to some of their venues.
2
Competitive Socialising & Emerging Concepts in Leisure
Logo
Urban Mini Golf
There are 53 venues across the country, with many more in the pipeline.
Who are the key operators and where are they locating?
Concept Similarly, Paradise Island Adventure Golf Swingers, has received backing from private
Mini Golf has traditionally been a stalwart of have 7 shopping centre and leisure scheme investment firm Cain International. The deal
the holiday seaside destination, where locations. In total there are 11 operators with will provide substantial capital for expansion
families brave the British weather and knock multiple locations that focus on the family with a number of openings targeted for
balls around concrete courses with increasing entertainment market, predominantly from Swingers in North America and the launch of
frustration, before reconciling the inevitable high footfall locations and with a close a second Competitive Socialising concept in
family disputes by heading for a 99 flake. affinity with retail. the UK.
This stereotype is being turned on its head as Several brands are pushing in a different Benefits for landlords
a revolution is seeing the concept head direction, aiming to capitalise on the Typical requirements are 15,000-25,000 sqft
indoors and increase its appeal through the lucrative bar market by attracting Millennials across the operators. This may have meant
use of innovative design, imaginatively and Urban Professionals on a night out. limited opportunities available in the past
themed layouts, neon lighting, technology Junkyard Golf launched their first night club because many landlords simply wouldnt have
and often banging tunes. The only ice- style site in a temporary unit in Manchester had this amount of available space at the
creams on show may well be those seen in 2015 and now have 4 venues, with a 5th appropriate rent. However, landlords are
floating in a cocktail. opening in Liverpool One in March 2019. seeing the advantages of bringing mini golf
Their high profile move to Westgate Oxford into their schemes to increase the variety of
For this report we have coined this growing in 2017 has helped to improve their covenant offer whether for family entertainment in the
subsector Urban Mini Golf to distinguish from and perception to landlords, which is paving case of Paradise Island and Mr Mulligans, or
the traditional outdoor crazy golf that has the way for more opportunities. At present drawing a young adult crowd and enhancing
been around for decades. The sector is split Junkyard Golf believe there is potential for 40 the evening economy in the case of Junkyard
between family entertainment and bar/night locations across the country. Golf and Puttshack.
club venues. In both cases operators are
bringing a fresh approach to the concept and In London, Swingers and Puttshack have There are also several examples of landlords
locating in high footfall shopping and leisure developed premium concepts. Their fit out bringing in golf to large units that have
destinations in the major towns and cities costs are high and require significant landlord become vacant from CVA or administration.
across the country. Game play is excellent, contributions, but they are creating world Swingers have taken a floor in the BHS unit
with wide appeal due to previous experience class venues with excellent playability and on Oxford Street and Mr Mulligans are taking
not being critical. environments that ooze sophistication. space in the House of Fraser unit in High
Swingers are located in the City and have Cross Shopping Centre, Leicester. A few
Operators recently opened in the West End. years ago a D2 operator taking such
In the family sector, Mr Mulligans are the prominent space either on the high street or
largest operator with 12 locations nationally, Puttshack arrived with acclaim to Westfield in a shopping centre would have been
having first opened sites adjacent to golf London in 2018 with has sites in London Bank unthinkable. In today’s rapidly changing
courses in a bid to increase take up of the and Lakeside Shopping Centre in the pipeline, consumer market it provides landlords with
sport by young people. In 2014, they opened a with a plan for 25 sites within five years. The an opportunity to diversify and freshen the
venue in Stevenage Leisure Park. The brand brand are developing their own technology offer.
now have 7 shopping and leisure scheme and building their courses in-house to
locations, with 6 more pipelined for 2019/ manage the supply chain and reduce their Landlords have brought these into schemes to
2020 and plans to reach 25 sites in five years. costs to market. provide diversity and supplement a wider
offer. However, for standalone operators the
question over which customers are the target
BRAND INSIGHTS market and what is the main source of
Customer and income profile for Mr Mulligans, Puttshack and Junkyard Golf income, is an important consideration.
Customers Income profile
100% 100% For the family market the mini golf game
80% 80% itself represents the biggest source of income
60% 60% for operators, but F&B is becoming
increasingly important as it provides greater
40% 40%
revenues that in turn can support paying
20% 20% higher rents and access markets that would
0% 0% otherwise be unviable. For Junkyard Golf
Mr Mulligans Puttshack Junkyard Mr Mulligans Puttshack Junkyard and Puttshack F&B income accounts for
Golf Golf
45-50% of income.
Family Student Millennial Urban Professionals Game Food Bar
Source Savills Research
savills.com/research 3
Competitive Socialising & Emerging Concepts in Leisure
Locations identified
nationally. Brands are
53 5 key
operators with 3+ locations.
19 in Schemes refer to locations
Locations Brands Schemes in a shopping centre or
leisure scheme
LOOK OUT FOR
Puttshack Junkyard Golf Mr Mulligans Paradise Island Swingers
The impressive site in Vibrant bar-orientated Has 12 venues across the Family offer located in 7 2 sites in central London.
Westfield London has locations moving into country. The offer has distinguished shopping A premium experience
a casino theme and prime city centre schemes evolved from outdoor to centre and leisure parks for Millennials and Urban
utilises the same tracking following launch of indoor where F&B are a across the country, with the Professionals, with bar
technology used by Westgate Oxford in 2017. 4 more significant part of the latest opening in Rushden and street food. Plans to
Flightclub and Bounce. venues and growing with offer. The latest has just Lakes in 2019. expand offer into UK and
Now developing licence to Liverpool One open from opened in Broadway Plaza, to North America.
roll out the concept & tech March 2019. with the 13th opening in
globally. Basildon in March.
Junkyard Golf, Leeds Swingers, London
Puttshack, London Mr Mulligans, Cheltenham
In today’s rapidly changing consumer market Urban Mini Golf provides
landlords with an opportunity to diversify and freshen the offer.
4
Competitive Socialising & Emerging Concepts in Leisure
Logo
Bar & Game
Several of these brands are what really caught the attention of the media with the rise
of competitive socialising. Which brands are proving the most innovative?
Concept Table Tennis participation is, according to There has even been a pop-up croquet bar
These concepts are all about bringing Sports England, up a third in the last decade. called Mallet and Hoops and a curling bar at
together groups of friends to play a game over Many bars around the country are now Roof East, a roof top venue, both in London
a drink. When put like that it doesn’t sound choosing table tennis tables over pool and and both with the aim of offering something
new, but the popularity of socialising that several pop-ups have evolved out of renewed novel and intriguing to consumers that have
doesn’t just revolve around standing in a bar interest in the sport. Bounce have brought an abundance of alternative venues to choose
but instead is based around an activity, is on the concept up a notch, with their bar/club from.
the increase. Lots of different concepts are format, again using technology to track ball
emerging and sites tend to be in major city movement to add a digital component and Evolution of offer
centres where there is a ready supply of young range of different formats to the game. Several brands have taken this a step further
people and office workers. by incorporating a number of different games
Whistlepunks have axe-throwing sites in under one roof. Roxy Ballroom has 6
The F&B component (particularly the bar) is London, Birmingham and Manchester, with locations, Lane7 has 4 sites trading, but 2 new
really important for most brands in this two more planned for 2019. The game price is sites in the pipeline for 2019. Roxy has table
subsector as it can account for over 85% of above average for the sector because the tennis, shuffleboard, beer pong and pool, with
income. In turn this naturally skews the nature of the sport means that instructors are the recent addition of mini golf. Similarly,
demographics to a higher proportion of required to ensure safety and provide a Lane7 is a bowling operator that has extended
Millennials and Urban Professionals, with personal experience. In their existing sites its offer to bring together a range of karaoke,
students often being absent due to the cost of peak hours are at capacity and 98% of custom table tennis, beer pong, pool, arcades and
participation and only older families typically is pre-booked. Venues at present don’t mini golf. The key benefit for these operators
engaging due to the bar/club environments. include licences, which is unusual compared is that multi-activities can provide a full
to other formats in this sub-sector given that evening’s entertainment, with the potential
Operators bars can be highly lucrative. However, this is of capturing more bar spend without the need
If ever there was a pastime that epitomises a very much on the agenda for future sites for a churn in footfall. Both brands have
bar game that has been enjoyed for including the latest in Bristol. grown their businesses in the North of
generations it is darts. Flight Club have England and are spreading further north and
revolutionised the offer while tapping into Shuffleboard is a cross between table top south with their expansion plans.
nostalgia. The game itself remains curling and shove-ha’penny, is very playable
uncomplicated, but the modern spin is made and becomes extremely competitive. The New formats will continue to appear in the
through clever use of technology, excellent main brand behind this offer is Liverpool coming years' as entrepreneurial operators
customer service and a great environment. based SHUFL, who supply over 700 tables come up with new and novel ideas. Several
Fit-out costs are above average by some across Europe. In the UK, shuffleboard is very popular pop-up bingo operators have
margin, but their venues appeal to clientele available in 34 venues across the country, but inspired the founders of Flight Club,
who wouldn’t want to be seen in a gritty pub, if you haven’t seen their signage above the Puttshack and Bounce to plan a new venture,
but are delighted to play in a trendy bar. Given door it’s because they franchise the product HiJingo Bingo; “bingo for the Millennial
the investment involved, Flight Club are out to bars and pubs who then rent the tables generation”. The concept will "infuse
willing to sign longer leases than many of the to customers. Greene King, Brewdog, technology with the traditional number play
operators we have talked, which will appeal to Stonegate Pub Company and Bierkeller are to unlock a ground-breaking twist on bingo
Landlords. among the chains who have adopted SHUFL. and shaking up Britain’s socialising scene”.
On the back of this vibrant scene, many bar
venues across the country are introducing
BRAND INSIGHTS more gaming options within their venues, but
Customer and income profile for Flight Club, Whistlepunks and Bounce will this result in a difference in quality of
Customers Income profile experience between the specialists and the
100% 100% adopters? Consumers are savvy and
80% 80% increasingly hard to please, returning to
those brands that provide the best
60% 60% experience, or seeking the new and latest
40% 40% offer.
20% 20%
0% 0%
Flight Club Whistlepunks Bounce Flight Club Whistlepunks Bounce
Family Student Millennial Urban Professionals Game Food Bar
Source Savills Research
savills.com/research 5
Competitive Socialising & Emerging Concepts in Leisure
Locations identified
nationally. Brands are
90 9 key
operators with 3+ locations.
2 in Schemes refer to locations
Locations Brands Schemes in a shopping centre or
leisure scheme
LOOK OUT FOR
Bounce Flight Club Whistlepunks Lane7 HiJingo Bingo
The Ping Pong operator Possibly the go-to venue Urban axe-throwing is Very sleek boutique The team who brought
Bounce have two sites in for Xmas parties last proving a real crowd bowling operator with Bounce & Puttshack are
London and another in December, with 4 dart- pleaser, with sites already up to 6 different game planning a new venture.
Chicago. Looking to secure themed sites already open in London, Birmingham concepts under one roof, The bingo concept will
10 more UK sites c.7,000- and plan for a further 15-20 and Manchester and two as well as a strong F&B be “something like Who
12,000 sqft in a variety of in 5 years in units 6,000- more in pipeline for 2019. offer. 4 sites already from Wants To Be A Millionaire,
location types where there 11,000 sqft in key high Requirements range Birmingham to Aberdeen, the X Factor and a rock
is a good supply of urban street markets. 2,500-6,500 sqft. with 7 more on the way. concert”.
professionals.
Bounce, London Roxy Ballroom, Nottingham
Flight Club, London Whistlepunks, Manchester
There is a huge increase in activity based social entertainment
experiences. It is all about having a fun social experience.
6
Competitive Socialising & Emerging Concepts in Leisure
Virtual Reality & Gaming
VR has been around for decades, but never really taken off. This is changing fast as the
tech is advancing at a rate of knots, with several brands now vying for space.
Concept requirements to install each piece of kit are One brand has recently opened its first UK
VR venues are growing rapidly across the the size of a bedroom. However, with Vive venue in intu Nottingham, having already
globe; there are reportedly over 3,000 venues Pro kit now available for under £1,000, it may gained a global presence in 13 countries.
in China alone. In the UK Savills has not be long before consumers have these in Zero Latency's offer has an important
identified over 50 locations and 40 operators their own home. differentiator from other UK operators in
in major regional cities and many others will that players can 'free roam' around a large
have fallen below our radar. National What sets some operators apart is those that playing arena and interact with 8 other
provision is estimated to have doubled since can provide an experience that cannot be had players in the VR world.
2017 and will continue this trajectory as at home as well as enabling a social
technology, concepts and brands develop. experience. Technology is the key Benefits for landlords
There are currently only 15 sites identified differentiator in this market, with the quality Like other emerging leisure sectors, the often
within institutional landlord schemes and of experience evolving quickly. perceived view is that VR-arcades do not
few brands are genuinely looking for typically need to be in prime locations and
expansion as they are still trying to work out Operators can take units that might be compromised for
the market. This makes it a tough call for VRX Gaming’s offer in Bristol includes the other uses, offering opportunities for
landlords who can see some potential in Virtuix Omni Treadmill. It is the latest VR landlords to fill underutilised space. Or do
adding them to their line-up, but don’t know technology, which lets you walk through a they? Several operators have indicated to us
who to go with. virtual world whilst walking in the real world. that less visible units are less effective than
When you step inside the treadmill you are those that can tap into passing trade, with up
New independent operators are appearing all secured on a harness and wear special shoes. to 95% of customers from ‘walk-ins’ rather
the time. Businesses typically offer multiple than advanced online booking.
games, and experiences for up to 6 players. VR Simulators in Glasgow bills itself as
While great fun, the number of quality games Europe’s first 5D racing centre with full Opportunities for taking underutilised space
is limited, particularly those offering motion chairs and the ability to race against is perhaps more about creative marketing
multiplayer experiences, and this may reduce 12 others. There are even fans so you feel the than visibility. Pop-ups may be good for
appeal for some. Low cost for participation is wind in your face. gauging interest in the short term, but have
resulting in higher take-up from students limited longevity and do not provide a serious
than other emerging leisure concepts, wide Manchester based Immotion VR have been income to landlords. One advantage is that
family and Millennial appeal, but lower take developing their own brand of simulators, unit sizes required are small, with operators
up from urban professionals and corporate driving machines, guns and cinema pods, anticipating around 2,000-4,000 sqft. Kit is
groups. which adds to the sensory experience with not fixed so actual fit out costs can be low and
full motion feedback from the equipment. there is the potential for landlords to move
To date most operators have utilised HTC This significantly enhances the immersion the offer around. With new VR/AR tech in
Vive headset technology and the range of into the experience. The consoles are the coming years VRX see the potential to
games available. This has given aesthetically designed to appeal to a wide create a VRX Arena which will require 6,000
entrepreneurial enthusiasts the opportunity range of consumers and to look good in a sqft to enhance group participation.
to buy kit at relatively affordable prices, so shopping centre mall.
start-up costs can be low and space Complementing retail
Immotion VR are arguably the only VR brand Game are carving their own niche in group
that has emerged to date in the UK and their participation in the gaming sector with
BRAND INSIGHTS statistics demonstrate how successful VR Belong, which provides gaming arenas in 21
Customer profile for VRX Gaming, can be. The brand opened their first site in Game store locations. This fast growing
Immotion VR and Virtual Hideout. 100% Cabot Circus in March 2018 and in the first 6 concept is fairly specialised and unique,
income comes from the game itself. weeks saw 4,000 visitors each paying £30 per appealing to regular gaming enthusiasts of
Customers hour. Since then aggressive expansion plans which there is no shortage. There is already a
100% have seen openings in 10 venues in major global market in online gaming and people
80% shopping centres in 2018 and a further 60 can play in the comfort of their own home,
60%
locations targeted in the UK as well as but Belong have identified that many gamers
Europe, US and UAE. Recently a concession enjoy the benefit of social and tangible
40%
tie in has been agreed with Grosvenor engagement with like-minded players. Each
20% Casinos. Shopping centre venues are a Belong venue runs its own mini-leagues, but
0% mixture of units and mid-mall pop-ups, the players can also compete as a team against
VRX Gaming Immotion VR Virtual latter perhaps showing an experimental other venues. The brand is planning to
Hideout
stage while both landlord and operator test expand across the Game store portfolio.
Family Student Millennial Urban Professionals
the market.
Source Savills Research
savills.com/research 7
Competitive Socialising & Emerging Concepts in Leisure
Locations identified
nationally. Operators
50+ 40+
identified end 2018.
15* in Schemes refer to locations
Locations Operator Schemes in a shopping centre or
leisure scheme (*excludes
Belong).
LOOK OUT FOR
Immotion VR VRX Gaming Belong Zero Latency Sandbox
In just 12 months and One site so far in Tapping into a strong This global leader in 'free- Sandbox are in 6 countries
already with 10 shopping Bristol, but the operator and loyal network of roam', multiplayer VR has in North America and
centre sites in the bag, really makes the gamers, Belong have 21 24 global locations in 13 Asia with 3 more opening
the operator has quickly most of technological arenas located in existing countries. Up to 8 players in 2019. Significant
become the UK's number developments in the VR Game stores, building can play at the same time in investment and prominent
one brand. Big plans for sector, with excellent use of a community that can a warehouse space where international locations
further expansion with machinery that enhance the compete with each other or they are free to roam and likely to help build a global
operations already in overall immersiveness of against other stores. More interact. First UK site was presence, including UK.
Europe, US and UAE. the experience. sites planned. intu Nottingham in 2018.
Belong, Birmingham Zero Latency, Nottingham
VRX Gaming, Bristol VR Simulators, Glasgow
When Immotion VR opened its first site in Bristol in March 2018, its
first 6 weeks saw 4,000 visitors each paying £30 per hour.
8
Competitive Socialising & Emerging Concepts in Leisure
Against-the-clock Experiences
Put people in a room, give them a challenge and start the clock. If the essence of competitive
socialising is to bring people together to share an experience and create memories, this is it.
Concept Competition is increasing rapidly, with 24 quality is distributed across its global network.
Escape rooms dominate this sector. Teams of different escape rooms identified in London,
up to 6 people are locked in a room and using followed by 11 in Manchester and 10 in Locked In A Room have 4 venues and while there are
items they find through a series of clues and Edinburgh. several regional players with more sites, the brand
puzzles the aim is to escape before the clock develop far larger capacity venues compared to any
runs down. The scenarios are wide ranging, Some operators are concerned that the ease other brand. They adopted an approach to target large
from a detective’s office, nuclear bunker, of replicating an escape room, but with low corporate groups by having identical rooms that adds
zombie apocalypse, sinking pirate ship, or the quality experience, fit out and safety, will competition between different teams and subsequently
Wild West. The concept is simple, break out result in a flooded market. As we are already are able to take groups of up to 78 players. This tactic
within an hour to win. Either way most seeing in the congested trampoline market, has helped to increase occupancy levels during the
visitors leave with a smile on their face. local saturation will result in a flight to week and subsequently 75% of their market is the high
quality. For landlords considering these spending corporate or urban professional groups.
These concepts may have first been derived concepts in their schemes this will serve to
by problem solving nerds, but make no make certain operators more appealing to Benefits for landlords
mistake, these experiences have mass appeal. them and their visitors. Landlords are realising that with relatively low set up
While females outweigh males in terms of costs and flexible space requirements, escape rooms
participation and have a better success rate, Operators provide a useful way to increase occupational efficiency
there is no age, gender or fitness bias. Four brands have emerged so far that by the of underutilised space, while providing an additional
Corporate and urban professional uptake is end of 2019 are expected to account for over appeal for the scheme as a whole. In turn, space
significant, accounting for more than 1/3 in 25% of the market. requirements are evolving; 4,000-7,000 sqft the typical
some cases. As corporate groups tend to look footprint for a brand seeking space in a shopping centre
for a higher quality offer, this prices out some Clue HQ and Escape Reality are the only or leisure scheme. Franchising is allowing operators to
people; students typically account for fewer brands with more than 10 UK sites; ClueHQ grow quickly into new markets and with it are building
than 10% of customers. with 18. Both began life in industrial units a strong brand and track record that inevitably
and railway arches, where space was cheap. increases appeal to landlords. 48
You know a concept has hit a trend when it is Escape Reality recently opened in Printworks
embraced by national mainstream leisure Manchester, which is a move to them taking Physical against-the-clock experience concepts tap into
operators. Locked In a Room have partnered space in higher footfall locations and tapping our nostalgia. There was a Crystal Maze Live concept
in Center Parcs and Merlin have introduced into the lucrative city centre market. There during the heyday of the TV series, but these fell out of
an escape room in Warwick Castle. These are a further four schemes in the pipeline as favour when the programme left our screens. The
take a concept usually geared towards adults well as franchises in US, UAE and India. revitalised offer available in London and Manchester
and provide something that can be enjoyed by allows you to experience the full game show experience
the whole family; families now average Escape Hunt have 8 UK sites, which are most for yourself, is booked up well in advance and the game
around 22% of participation in the sector. notable in that they are all located in play doesn’t disappoint . Similarly, there is a Krypton
prominent city centre schemes or high Factor concept rumoured for 2020.
With 145+ locations and more than 60 streets. The company has invested
operators it is a very fragmented market. significantly in improving the offer and its Evolution of offer
Savills forecast that at the end of 2020 there game design studio has partnered with a IP deals are starting to gain presence in the sector and
will be more than 200 locations nationwide. production company to ensure the same have the potential to significantly increase the audience
and appeal. Coming up in 2019, Escape Hunt are
launching a Dr Who experience to various sites and
Time Run will open a fully immersive Sherlock Holmes
BRAND INSIGHTS escape experience, both from tie-ins with the BBC.
Customer and income profile for Locked In A Room, Escape Hunt and Breakout Rooms
Customers Income profile
Food & beverage is not high on the agenda for most
100% 100%
operations. Operators are generally of the view that
80% 80% their offer forms part of a wider evening or afternoon’s
60% 60%
entertainment and therefore is supported by (and
supports) other F&B businesses in the area. However,
40% 40%
with the growing group bookings market, bars are
20% 20% starting to feature. These are not intended to
0% 0%
significantly increase dwell, but help to complete the
Locked In A Escape Hunt Breakout Locked In A Escape Hunt Breakout overall experience. If there is one thing in common
Room Rooms Room Rooms with all “against- the-clock” experiences, the first thing
Family Student Millennial Urban Professionals Game Food Bar
people want to do after the game is talk about it and
Source Savills Research
share it on social media.
savills.com/research 9Competitive Socialising & Emerging Concepts in Leisure
Locations identified
nationally. Operators
145+ 60+
identified end 2018.
20 in Schemes refer to locations
Locations Operator Schemes in a shopping centre or
leisure scheme
LOOK OUT FOR
Escape Reality Escape Hunt Locked In A Room The Crystal Maze IP Deals
With 10 sites nationally, Developed as a franchise Has opened in 5 leisure Following the success of Expect more from big
making the transition from model and has grown to schemes across the the TV show in the 1990s, leisure operators like Merlin
industrial units to city 40 sites in 25 countries country, including six venues across the and Center Parcs, as well
centre schemes following globally in 5 years. Looking Westquay, Southampton, country opened their doors as a multitude of IP deals
opening in The Printworks to double UK presence with several in the pipeline to the public, offering a that are linked to popular
in 2018. Part of a global in 2019. Arguably the and an eye on 30 sites. full live experience. Two trends and broaden appeal.
network that includes sites first brand to break the One of the largest escape decades later nostalgic Sherlock Holmes and Dr
in USA, UAE & India. institutional landlord space, room concepts due to large gamers can visit sites in Who in 2019.
with 6 locations in schemes floorplate and up to 13 London and Manchester. Next step Harry Potter,
such as The Light, Cabot rooms. Excellent at serving The latest in Piccadilly Disney or DreamWorks?
Circus and Corn Exchange. the corporate market. Circus in March 2019.
8%
Escape Reality, Glasgow Escape Hunt, Birmingham
The Crystal Maze, Manchester Locked In A Room, Bristol
Several escape room brands are exploring IP deals to bring the likes of
Sherlock Holmes and Dr Who themed rooms into their venues.
-
10Competitive Socialising & Emerging Concepts in Leisure
Landlord’s Perspective
The importance of D2 for many institutional landlords cannot be underestimated. Cinemas and
bowling still anchor 70% & 40% of leisure schemes across the country, respectively, but how
much space should be assigned to new formats emerging? We have spoken to five of the biggest
institutional retail & leisure landlords about their experiences of this growing sector.
1. Uptake 2. Format Considerations
Uptake by institutional shopping centre and leisure scheme landlords Both demand and opportunities are growing and space is increasingly
has been slow to date, with no company having more than 10 operators competitive. One landlord cited a unit that had three operators
across their portfolios. Instead most of the offer in emerging leisure fighting over a unit that had been vacant for two years, following which
sectors remain in secondary high street and industrial space. However, other concepts have approached them to come in on the back of an
landlords expect to see a significant growth in the next few years as they increasingly exciting scheme.
become more comfortable with the different formats, the benefits and
how they can better utilise space. Most landlords are not keen on an offer that has limited appeal.
Universal considerations include repeatability and originality and a
The reality is that no-one truly knows where this is going, so landlords leisure offer that maximises visitation across different day-parts. While
are cautiously trialling them because while it is a clear area of growth, F&B is key for supporting retail and for rental income, leisure uses in
some concepts are considered to having better longevity than others. turn are excellent for supporting F&B.
Landlords have to think about the longevity over 10-25 year leases,
which is a long time in any consumer market. Golf is particularly popular due to universal appeal. Several bar chains
and established leisure operators like Hollywood Bowl are introducing
There are some concerns too over ease of replication, and experiences golf and other competitive socialising concepts into their venues.
in the dining sector has taught them that consumers are very fickle
when it comes to the leisure sector. The potential for VR is huge, but some landlords think that it still needs
to evolve to have mass appeal. VR doesn’t need to require much floor
The market needs key operators to emerge that have gravitas and area and is very flexible, but while set-up costs can be low the best
track record, preferably needing low capital contributions. It is clear quality experiences have a high entry level due to the cost of hardware.
that in each subsector there are several brands starting to emerge.
These operators are finding that the opportunities presented to them Escape rooms are cheap and sustainable, but need to increase appeal
is increasing and a place in a large scheme can represent a significant to families for shopping centre locations. Several landlords have cited
boost of profile and future covenant for any brand that can secure the concern that offer can vary significantly in quality and experience.
tenure. However, as reliable brands emerge this is becoming less of an issue.
Popups have provided Immotion VR the opportunity to grow rapidly. For most shopping centres the family offer is particularly important.
With 10 units in a single year this is quickly establishing their presence However, in some locations other options are viable, like Westfield
in the sector, while can landlords trial the offer before finding London, Westgate Oxford and The Light Leeds where the demographic
permanent space. is more skewed to Millennials and students.
The growth across all of the competitive socialising market is a good Bar game and other concepts where the bar is a core part of the offer
counter narrative to the rest of the market, but several landlords are often requires external frontage and tends to be tied to an evening
keen to reinforce that this sector is only a very small part of what they activity rather than daytime family audience. Leisure schemes can
are doing and most of the leisure income still comes from cinema and manage this because they have a late night offer, but it is more of a
F&B. challenge for shopping centres where there isn’t round-the-clock access.
Lane 7, Middlesbrough
Lane7, Middlesbrough Immotion VR, Manchester
savills.com/research 11Competitive Socialising & Emerging Concepts in Leisure
% of sector located in
shopping centres and
33% 53% 36% 3% 30% 14% leisure schemes
Cinema Bowling MiniGolf Bar&Game VR AGTClock
Source Savills Research
Ghetto Golf,Ghetto Golf,
Custard Custard
Factory, Factory
Birmingham Locked In A Room, Millennium Square, Bristol
3. Optimising & Repositioning Opportunities 4. Lease considerations
With the department store sector in decline, there is a question over Rents in this space are typically equivalent to other D2 uses. Agreeing
what will be the scheme anchor of the future. The consensus amongst affordable rents is as important to landlords as to operators. Landlords
landlords is that variety and depth of offer are the new attractor. want sustainability and with rents at a level where they can still achieve
Individual F&B, leisure and retail brands can drive footfall but are not growth. Arguably this makes it an easier fit for leisure schemes (or
an anchor in their own right; it is the variety that creates destination. office developments) than shopping centres because rents are typically
lower than retail.
Large voids created from exiting stores can present opportunities for
leisure brands seeking space close to prime/footfall, but without the There is a considerable financial risk for landlords with contributions
rents associated. British Land and Hammerson have already taken back sometimes exceeding £1m (Some fit-out costs are £2-4m), but the
space from M&S and HoF and subdivided the large units into several contribution required by different sectors and different brands varies
smaller retail units with prime frontage and leisure space in rear or significantly. Premium Bar & Game concepts often see their cost to
upper floors. The outcome of this repositioning can produce rental entry over £2m, several mini golf operators are even higher, while even
income higher than the original occupier. Intu have stated similar the more premium escape room operators tend to manage costs below
intentions, but all landlords will inevitably have this on their agenda. £0.5m. VR venues can be delivered for even less. This clearly has a
bearing on the contributions required and the lease lengths agreed.
In the current market there is increased focus on diversifying space
across different income streams. Leisure makes up 2% of one landlord’s There are clear pros and cons regarding fit-out costs around quality
portfolio (excluding F&B) that we spoke to, so it is more about creating versus upgradability. A quality of offer is expensive and can’t easily
variety than income. This is where emerging leisure brands come in. be changed if consumer tastes move on, while a cheap build means
With the aim of differentiation, Landsec arguably took a bold step to flexibility around the offer, but may come at the cost of the customer
anchor part of its leisure offer in Westgate Oxford with Junkyard Golf, experience.
which is a great leap of faith in what was a fledgling operator.
What is universally agreed is that the offer is more sustainable where
The flexible requirements of several operators means there are the capital contributions and rent are sensible.
opportunities to fill underutilised or tertiary space in a scheme.
However, several landlords have noted that this is an ideal scenario but Covenants may prove less important than retail for valuation because
in fact these opportunities are often thin on the ground, making it a landlords tend to value the whole asset and have different yield values
challenge to shoehorn in these new and exciting operators. on start-ups, but the lease length is important. Landlords remain
reluctant to sign leases less than 10-15yrs, but some operators want
Dining is excellent for place making, dwell times and creating a 5yrs. If the operators are nervous, how does this make the landlords
destination and increases retail spend by up to 45%. The leisure mix feel? Additionally, while landlords still want long leases, this can create
in turn is important for supporting the F&B offer, particularly outside nervousness over unproven concepts and longevity of the trend.
of ‘normal’ hours. But this doesn’t mean it is a universal solution. The
offer needs to be tuned to demand driven by the local demographic. Fundamentally, as these brands only tend to account for a small part
A clever mix can set schemes apart from competition, but there are of a landlord's income and can really help to enhance the vibrancy of
concerns that leisure could be over embraced and fall victim to the the overall offer, landlords will increasingly find ways to bring these
saturation experienced in other leisure sectors. concepts into their schemes.
Variety and depth of offer are the new attractor. A clever
mix can set schemes apart from competition.
12Competitive Socialising & Emerging Concepts in Leisure
Hot Issues
Challenges of developing a unique offer
1 Demographic change
People are drinking
less, buying less and
4 Which customers
are more valuable?
An offer with a bar
7 Flexibility
Does a paradox
exist where a high
want more experiences. attracts Millennials and quality environment is
This sector is all about Urban Professionals. A more appealing, but is
creating a different family offer has wide not flexible when trends
and lasting memory. appeal, but tends to move on. Yet a cheap
Customer journey key. be more of a day time and flexible fit-out
activity. Both targets can be adapted, but
2 Social interaction
Drives this sector,
with the most enjoyable
may restrict locations a
brand can go in to.
lacks the same level of
experience?
and satisfying
experiences often being
associated with group
5 Technology
Has a significant
role in enabling the
8 Differentiation
How do you stand
out from the crowd with
participation. offer, but social a unique offer? Crucial
media presence for both operators and
3 Food & Beverage
offer can
significantly enhance
important too and
how Instagramable the
offer is is an important
landlords who need to
avoid a situation where
in a few years every
income and plays consideration. scheme has a golf, VR
an important role in and escape room.
being able to locate
in more prestigious
locations. But both
6 Optimising space
Leisure uses provide
a fantastic opportunity 9 Diversification
How can brands
add complexities. for landlords in filling flex the offer to meet
Food requires kitchen, underutilised space, changing needs? Are
extraction and staff, or repositioning units there advantages to
while a bar may require that have come back having more than one
street access if the to market following concept under one
scheme it is in is not structural change in the roof and being able to
open late. retail market. entertain for an entire
evening?
Top 15 Cities
Provision is heavily weighted to the top UK cities
Market Operators Market Operators
1 London 91 9 Nottingham 12
2 Manchester 27 10 Cardiff 11
3 Leeds 18 11 Glasgow 9
4 Birmingham 17 12 Sheffield 8
5 Liverpool 15 13 Belfast 6
6 Edinburgh 14 14 Oxford 4
7 Newcastle 13 15 Milton Keynes 4
8 Bristol 12 16 Leicester 3
Source Savills Research
savills.com/research 13Competitive Socialising & Emerging Concepts in Leisure
Find out
more...
Don’t Forget Agency
David Bell
Leisure Agency
Bowling 0207 877 4516
dbell@savills.com
Bowling was around long before D2 space Carlene Hughes
was even thought up, has always been on Leisure Agency
the fringes and is making something of 0207 409 8177
a comeback with an increased quality of chughes@savills.com
experience, more F&B and supplemented
with a broader offer. Sian Tunney
Licensed Liesure
It still anchors 50% of leisure parks and 0207 877 4554
16% of in-town leisure schemes, so shouldn't stunney@savills.com
this market narrative also include bowling?
Investment
Arguably there is no better example of James Hurst
competitive socialising and with 160 existing Leisure Investment
bowling lanes in the UK it remains the most 0207 409 9927
mature leisure offer in the UK after cinemas. Jhurst@savills.com
However, the traditional out of town bowling
operation was grown out of the need for large Research
cheap sites, but requiring a drive-to audience. Tom Whittington
Retail & Leisure Research
There is a clear advantage for operators 0161 244 7779
with a smaller format to being able to take twhittington@savills.com
their offer into city centres where more
Millennials go out with no need for a car.
These boutique formats, spearheaded by
All Star Lanes and Lane7 are redefining the
bowling experience with a wet-led focus.
These disruptors are forcing the big players
to up their game, and several of these are
using the end of their leases to renegotiate
deals with their landlords and often getting Leisure Property
further capital contributions. This enables Forum
them to reinvigorate their offer with a refit
and diversify to include other formats of The Leisure Property Forum
competitive socialising, such as the addition is the leading property forum
focusing exclusively on the
of mini golf in some Hollywood Bowl venues.
wider leisure industry,
bringing together leisure
The upshot is that we will see a higher operators, landlords and
quality of experience across the country as a consultants across the leisure
consequence. sector. To find out more:
info@leisurepropertyforum.
co.uk
www.leisurepropertyforum.
co.uk
Source Savills Research
14Savills 33 Margaret Street London W1G 0JD +44 (0)20 7499 8644 www.savills.co.uk
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