Gyms and fitness studios have dominated planning activity in the leisure sector, with operators accounting for more than half of all applications.
New research from EG has found that over 50% of all planning activity for new D2 use classes over the past five years came from gym operators and fitness-based group exercise providers.
Just under a third (31%) of all applications are for fitness facilities equipped for yoga, pilates, boxing, martial arts and other types of fitness studios, while 22% consist of standalone gyms.
When combined, leisure and entertainment facilities for adults, children and families amount to just over a quarter (26%) of applications.
Among these, some of the most popular facilities include soft-play centres for children, trampoline parks and escape rooms, with the latter emerging as one of the fastest-growing groups during the five-year period.
On the whole, the leisure market slowed during 2018, after four years of continuous growth. However, figures for the opening half of this year suggest that the appetite for new and innovative concepts is driving the sector forward at a steady pace.
Geographically, the South East and London account for more than a quarter of this activity, with 28% of the total number of planning applications lodged.
The drivers for the sector’s growth are twofold. On the customer side, the spending habits of millennial consumers craving experiences over material goods have allowed a greater variety of occupiers to flourish without signs of market cannibalisation.
Furthermore, millennials are often more concerned with physical and mental wellbeing than older consumers, and are seeking places to relax and socialise, as well as exercise.
Occupiers are also increasingly able to harness the power of growing consumer spend, as the space available for these facilities becomes more accessible.
The signs point to a significant recalibration in physical commercial real estate. Traditional, linear property models are fracturing to create more mixed-use and flexible types of destinations.
The most obvious example is the ongoing churn in the retail sector, as casualties on the high street continue to create an oversupply of retail stock.
Many of these high street units are ideally sized for leisure operator requirements. Meanwhile, vacant retail park units, which contain larger floorplates and higher ceiling heights, have proved to be perfect for operators of climbing walls and trampoline parks.
Away from empty shops, data from EG shows that 38% of all applications since 2014 have been lodged in existing industrial premises, the largest percentage of traditional property types.
A variety of indoor shooting games, go-karting and trampoline parks typically lend themselves to these larger-size units. Additionally, office space is being converted to D2 space; soft-play areas and escape rooms have become more prevalent in these buildings, typically in town centres.
All in all, the great leisure boom does not seem to be ending. Gyms, for one, are being reimagined in different ways to keep consumers interested. Millennials are creatures of experience, and willing to part with their cash to try new things.
Combined with the recalibration in the property sector, specifically physical retail, this could present the perfect solution to the vacancy crisis.
The issue for occupiers, and indeed landlords, is preservation – and hoping that new ideas do not go out of fashion too quickly.
To send feedback, e-mail james.child@egi.co.uk or tweet @JamesChildEG or @estatesgazette