Activity in the leisure investment sector has been slow to say the least. Yes, hotels and pubs have recovered quickly as an asset class, mainly driven by long leases and/or underlying residual values, but the more typical cinema-anchored schemes have been completely overlooked, and almost certainly “over-sold”.
Consumer spending would suggest the signs of recovery are out there. Leisure spend in the UK is expected to reach £98 bn next year, just below the record £111 bn in 2019. Business failures have led to the old guard such as Frankie & Benny’s and Chiquitos being replaced with new names, making leisure schemes more relevant to a younger target consumer. Our Head of National Leasing, Victoria Broadhead would concur “we are seeing more regional operators taking space such as Bok Shop, Hubbox, Mowgli and Pizza Punks in more prime locations, but providing the customer with more choice. This in turn compliments the leisure operators who sit next to them”.
With cinemas remaining a vital anchor to many leisure schemes, there have been deep concerns about the post-pandemic success and longevity of the cinema sector. At the recent LPF Cinema Seminar, Tim Richards CEO VUE Cinemas, was extremely optimistic about the longevity of the sector, both in terms of the theatre-going public, but in the ability of the cinema to adapt to consumer needs. He sees the Cinema as not just movie entertainment, but a venue to host other live events, or launches of TV shows such Game of Thrones or E-Sports competitions. That said, No Time to Die, is already the 4th highest grossing movie of all time in the UK at £90m+ box office sales, and Bond may yet be credited with saving the UK Cinema industry. leisurepropertyforum.co.uk/event/the-cinema-sector-life-after-covid/
There isn’t much evidence yet to support a rush back into the leisure investment sector, but we believe it will come. There are currently 3 cinema-anchored schemes in the market today, namely Ilford, Swansea and Paignton. We confidently predict that at least 2 will sell before the year end and we expect them to be the first of many.