Landlords, Get Ready for Competition

Posted by Colliers on 2nd April 2021 -

As we emerge from being in lockdown for almost two thirds of this last year, it’s abundantly clear that people are keen to return to socialising face-to-face and restoring the ‘feel good’ factor of shared experiences with friends. So for quick thinking landlords now is a time to consider introducing competitive socialising venues into the fold.

 

Venues hosting indoor mini golf, bowling, darts, and even axe throwing such as Roxy Ball Room, Mr Mulligans, Lane 7, Swingers, Boom Battle Bar, and Flight Club, bring a point of difference to leisure locations, helping diversify the offering away from the casual dining sector which has burnt the fingers of so many landlords over the last three years. They generally take large units of 15,000 plus sq ft whether at ground floor, basement, or upper floor level, perfect for those struggling with larger retail units left empty by the closure of large department stores. 

These venues increase dwell time with groups often starting or ending their visit with a drink and a meal, and attract all age and demographic groups (families, students, millennials and young professionals) with the average group playing two games per visit, and often visiting a couple of times a year - so the market is deep and diverse. 

Operators are targeting specific sub-groups, with the likes of Whistle Punks and Ghetto Golf aimed at mainly at young adults and millennials, and more family-focussed operators such as Hollywood Bowl launching their Puttstars concept, targeting traditional out-of-town big box leisure schemes.

Nowadays young people, especially millennials are spending less on products and consuming less alcohol, but are still looking to socialise and share experiences with friends. Against this backdrop, competitive socialising venues help create a real buzz and atmosphere in ‘Instagrammable’ environments, which improves a scheme’s social media profile.

To capitalise on this, the competitive socialising sub-sector is likely to expand throughout major and regional/university cities, taking advantage of large floor plates becoming available, and seizing on the relaxation of planning laws. Market forces mean that landlords are having to quickly get to grips with the fact the huge capital commitment to each site needs to be shared often in excess of £500,000, especially at a time when more orthodox covenant strength is very limited in the market - balancing this investment against the potential upside offered by turnover top-ups. 

Landlords are having to examine the funding and business plans of operators, and they recognise that contributing towards a high quality but adaptable fit out is directly linked to the consumer experience and therefore long-term success of the operator, and their overall scheme. 

Now is the opportune time to seize on this fast growing sector as it is apparent that the market may quickly reach saturation point due to its easily replicable nature. Operators are already diversifying from the core and ever popular activities of bowling (which has already proven itself to be a long term success), darts, ping pong, crazy golf, to meet the changing demands of millennials, and having to introduce technology such as VR to help remain original and enhance the consumer experience.