by Mark Potiriadis
City investors have looked upon leisure developments, particularly in relation to retailing, with a high degree of suspicion. In the absence of a solid track record and comparables for rent reviews, given the limited size of the market and scarcity of reliable operations available, it is not surprising that institutions have kept their distance.
But leisure is no longer necessarily an unprofitable or marginal activity: everything depends on location, mix and charging policy. Low-charging, low-popularity leisure, the evidence now shows us, will not make a profit.
A new leisure market, however, is being created now, inevitably affecting the fortunes of town centres, edge-of-town and out-of-town developments. In probably another four or five years it will be in the same position as the retail warehouse market is today.
There are formulae on yields, rent reviews, even changes of use (with careful design today’s ice rink could become a retail store in 25 years’ time). Flexibility and specialisation can make up for some of the inherent problems in leisure developments. This is a departure which seems entirely lost on the majority of town planners and which has serious implications for our town centres. If the planners do not emerge from their inertia and plan, many High Streets will continue to reap the sour fruits of the prohibitionist, monopolistic policies which refuse to recognise the right of the individual to choose his quality of life.
Two southern towns, Portsmouth and Watford, typify the contrast. Portsmouth advertised for development ideas for its out-of-town Hillsea Lido site. Initially the council was captivated by the attractions put before it, from leisure ice and ten-pin bowling to restaurants, bars and cinemas. Eventually, however, it withdrew the opportunity — to “protect” its town centre despite the fact that there was no policy document of any kind planning the development of leisure in the town.
Watford, on the other hand, is going ahead with an edge-of-town scheme (not, it must be said, without local opposition and a paring-down of the original ideas) which will create a complex with leisure ice, multi-screen cinema, ten-pin bowling, restaurants and bars. Watford is not so worried about the so-called doughnut effect which threatens to turn towns inside out, with a vacuum in the centre and all the activity at the circumference. Watford has plans for a major Capital & Counties retail development and a new £9m leisure pool in the centre of town. This is an example of how a strong town centre is not overly concerned by out-of-town competition and sees the new facilities as an amenity — not a threat.
Retail parks now pose a greater threat to weak town centres than the stand-alone out-of-town warehouse ever did. Research has shown that families and groups, rather than individuals, like to visit out-of-town retail centres — which makes them highly compatible with leisure.
A good current example of its power in retail parks is Peel Holdings’ development at Skimped Hill, Bracknell. When the council originally considered the idea the leisure element was going to be about 40,000 sq ft in the 180,000-sq ft retail park. The process of selection in a developer competition itself became a learning curve for everyone and, by the time Peel was successful, the leisure space had risen to 80,000 sq ft. That is now up to 100,000 sq ft to complement the commercial retail facilities and gives a ratio of over 35% between leisure and the total area. The diversity of leisure was the attraction for the council: for Peel it was the rents for leisure giving them a good return on investment with a good covenant from a major company like Bass. To complete the circle, income from selling the land in Skimped Hill contributed to the cost of a new local authority leisure pool some miles away.
Retail needs leisure as an enhancement of the service it provides to shoppers, with the aim of increasing the draw of each centre, and competing more effectively against other retail centres. Leisure needs the extra funds that retail can make available, as well as the exposure it will get to the large number of people using retail facilities.
Retail needs leisure more than leisure needs retail because it is facing two specific problems. The amount of retail space available in town centres could be exceeding demand: and buildings are tending to have a more limited life, as design consciousness by the public brings the need for more frequent refurbishments to keep up with the pressure for a rise in standards.
Some results of these trends are increased competition between retail centres, a more active management to create events and focus on social activities, higher design standards for the retail environment and the inclusion of leisure as a draw to shoppers.
As in retail, so too in leisure there is a target customer to consider when shaping the mix of developments. It is no use, for instance, aiming at the children who enjoy the funfair leisure “boxes” rather than the main retail customer — the adults. How far the target customer will be the same for the retail and leisure developments depends on whether the leisure is an enhancement or a destination.
Leisure in retail
When the leisure area is some 10% of the shopping area, leisure is an enhancement and the target customer will be the same as for retail. If the leisure area is much more — say 25% to 50% of the total — then leisure is a destination in its own right.
In such a case a different rule applies, because roughly one in three leisure customers is attracted from retail. That leaves two in three leisure customers who see leisure as a destination. Their socioeconomic and age characteristics are dictated by the mix of the leisure activities provided.
When leisure is a destination it is perfectly possible for the one location to attract different types of socioeconomic spectator groups, depending on the event. This is common with stadiums, of course (pop groups or soccer teams) but it also happens elsewhere — Cowes, for example, with the two contrasting audiences for sailing and power-boat racing.
Conversely, leisure increases retail attendances by about 10%. It follows that to a certain extent, by altering the leisure mix, the leisure target customer can move closer to the retail customer, but it will nevertheless be difficult to make them identical.
In the same way that theme park operators have a star rating formula for individual rides, you can devise an “attraction-rating” guide to leisure for any particular location. This is based on combining the potential capacity of a facility with a measure of its attraction to the different age groups by socioeconomic preference. Such a measure, for instance, puts indoor bowls, health clubs and indoor cricket at the low end, and multi-screen cinemas, leisure pools, fast food and tourist attractions at the high end.
Retail warehousing is attractive to the family as a unit for shopping visits. The compatibility with that, as well as low land values, has created all the elements of a good partnership, and is currently a growing trend drawing leisure out of town.
The conflicts between retail and leisure are threefold. First, leisure facilities must be accessible but they must not interrupt the shopping traffic flow, otherwise they will be a distraction from the purpose of the visit. Second, peak hours conflict, so retailers may find car-parking spaces intended for their customers occupied by users of leisure facilities (which offer rents that are a fraction of the retail rents). Third, the length of stay can be affected: enhancement of a shopping visit is a very subtle equation. Essential comforts like food and drink extend shopping stay by adding a second cycle. Other leisure facilities can reduce it.
In design terms, when critical mass is above 20,000 sq ft for any group of leisure facilities, they should have dedicated car parking. When that critical mass reaches 60,000 sq ft then a physical distance, splitting the leisure from the retail, is required — they should be in opposite sides of the car park. The “leisure box” of, say, 40,000 sq ft can be next to the retail complex with access to the main mall — but it must always have its own parking.
Retail in leisure
While leisure needs to be in retail schemes, retail outlets are also needed in leisure schemes. Mostly this confines itself to the souvenir shop, but in theme parks it is developing in two different ways.
Thorpe Park, for example, has expanded its retail outlets tenfold, beginning with two and now having 20, but that is all roughly in line with its leisure expansion year-by-year since 1979. But these are mainly individually themed small shops, kiosks or handbarrows providing very much festival and street-market retailing. Items sold in leisure parks are not things of need but of the moment and of memory, part of the mood. In fact, too many “proper” shops might put visitors off. Thorpe Park, instead of having one store with a number of kiosks, say, has “stolen” small spaces here and there beside its amusements to create themed retail outlets.
In contrast, the most significant development yet planned for retail in leisure is at The Battersea, where 23% of the space will be for retailers — 230,000 sq ft. Everyone will pay to go in but part of the price will be redeemable against shop purchases. Bearing in mind that retail rents are often four or five times the level of leisure rents, this retail area may well have a similar or even larger capital value than the leisure, providing a good stabilising factor for the whole scheme.
Shopping, like leisure, now has many facets — for food, for furniture, for do-it-yourself, for the garden; comparative shopping, department store shopping, fashion shopping, gift shopping, leisure shopping, holiday shopping, speciality shopping, festival shopping…
Not all these types of shopping are equivalent in profitability. Fashion shopping has been a driving force for higher town-centre rents, but this element is only slowly finding its way out of town. Festival market retailing, on the other hand, has had a higher turnover per sq ft than comparison shopping.
Leisure zoning in towns
Then again, the commercial value of land on which a superstore is trading vast amounts of money, with purchases of £50 a time the norm, is very different from that with gift, craft or antique shops with their far smaller overall turnover and smaller area.
But even more important from the leisure viewpoint, it is no longer true that in-town shopping is limited to comparison goods, and the provision of retailing for tourists and the leisure shopper has become an important element in urban regeneration.
This has been classically illustrated in America with developments like Baltimore and Faneuil Hall in poor, run-down areas. This type of shopping and leisure breathes life back into worn-out town centres, and later on recovery is rewarded by stimulating a more profitable class of shopping, and the presence of office buildings. It is this lighter side of shopping — apart from the more direct connection of selling sports and leisure goods themselves — that is merging with leisure.
Towns, to be alive day and night, need both retail and leisure. Leisure cannot afford retail land values. So, without leisure zoning in the town centre, leisure will not happen in-town.
Many of our main town centres are congested, charmless areas where you cannot buy what you need and where it is difficult to park. This makes planning refusals on the grounds that the town centre will be affected by out-of-town facilities a preservation of an existing monopoly.
It is often not a matter of protecting a lively, enjoyable, useful centre from duplication — the facilities proposed for outside the town are not yet within it nor, in the majority of cases, is there any planning for them to be. Why, therefore, should the local authorities prohibit their existence? Attractive places are what people want. Very shortly, developers and councils will be asking how safe their investment is without leisure.
