What is the long-term future of leisure, and how are the ambitions of leisure businesses likely to develop? How should property owners respond and how can the wider physical environment help create a future-proof location? Read on to find out!
Leisure. By definition, the word means the time when one is not working. As technological advancements automate away the more mundane tasks in our day-to-day lives, we allegedly have more of it. How we spend our leisure time is evolving to include socialising, networking and entertainment. Operators and owners of leisure property are responding to meet this challenge; the sector is one of the most dynamic and diverse in the property market.
But what, actually, do we do in our free time, and where and when? Glance down a high street or around a leisure park and you will see a line-up of familiar facades, which suggests our recreational time is still underpinned by 'traditional' activities: bowling, the cinema or a meal in a restaurant.
Look harder and you will see evidence of significant evolution within the leisure sector, where watching a film is now a multi-sensory experience, foods from around the world are available at our fingertips and pay-as-you-go has replaced ‘please sign here’.
Look harder and you will see evidence of significant evolution within the leisure sector
This is being driven by everyone’s favourite megatrend: experience. Analysis by Deloitte suggests the leisure sector is attracting one-and-a-half times times more discretionary spending than retail, and is growing twice as fast. So as sales fall away on the high street, we appear to be investing more in 'real life’, and less in possessions. Participation has become the most modern of talking points and an important building block of social capital. We’re also not afraid to pay for it: Wagamama has estimated that Generation Ys (born in the 1980s and 1990s) spend £420 million a month on live experiences and events.
Concurrently our leisure time has evolved from a static, one-stop event to a journey involving multiple touch points; a meal and a visit to the cinema, or trip to the gym followed by a coffee with friends. This reflects the widening of our social Venn diagram as the groups of people we spend our free time with expands to include not only family and friends, but also colleagues and casual acquaintances.
As the definition of leisure expands, it is placing greater demands on operators
As the definition of leisure expands, it is placing greater demands on operators, whether that be for a refreshed restaurant menu; more adrenaline-filled and competitive gaming environments; or the latest technology to heighten our cinema experience.
Leisure businesses are rising to meet this challenge. Never before has the occupier base been as diversified and dynamic as it is today. Business plans are orientated towards the future, with an eye on what’s next and what’s after that. The revolution is being played out across all types of leisure property, from an out-of-town park to schemes in a city centre. Importantly, and refreshingly, it is not solely a London story: regional markets are just as vibrant.
So what does this mean for the owners of leisure property? To answer this question, the LGIM Real Assets team has written a report on ‘The future of leisure’, which reveals there is a fascinating future ahead for the leisure sector. Our three highest conviction themes are:
- Consumers will want highly sociable, community-orientated spaces that are connected and age inclusive. The consumer service model has changed: leisure activities are no longer the preserve of special occasions
- Leisure operators of the future will optimise location, occasion and channel to connect with their customers. Leisure businesses have embraced changing lifestyles and technological advances to emerge as one of the most dynamic and innovative groups in the market
- Creating a destination is paramount for future-proofing leisure property. Owners need to provide schemes and services that form a leisure hub, not just a location, for best-in-class leisure operators. Flexibility, visibility and accessibility of space are the fundamental characteristics of future-proofed property
We believe that the owners of leisure property need to be as responsive and forward-thinking as their occupiers. Our research provides an insight into the toolkit we will be using to ensure continued success in the sector. Read more about the future of leisure here.