Competitive socialising set to face property hurdles

From technology-driven crazy golf and darts, to ping pong and bingo, experiential venues have been popping up all over town in a bid to meet consumers’ ever demanding need for ‘something new’.

The market is currently a mix of operators with five or less venues, but expanding – think Flight Club Darts and Junkyard Golf – single-site operators, such as Dabbers Social Bingo and Serve, and those with their first site still on the cards, such as Hijingo Bingo. International operators are also keen to get in on the action, with US operator Punch Bowl Social looking for its first UK site, as reported by MCA last month.

“Within the London market, and arguably major regional cities, competitive socialising has become an extremely popular activity for consumers all year round and this has been reflected in the property landscape with more demand for large sui generis space all over London,” says Daniel Rogers, surveyor – sales and acquisitions (central London &M25) at Restaurant Property.

“But the success of these experiential concepts – with operators like Swingers, Flight Club, London Shuffle Club and Junkyard Golf leading the way – has led to increased competition for sites, with rent values rising to more than £50 per square foot for larger venues in central London,” he explains. “For those operators targeting already licenced sui generis sites, rents are going to increase from your traditional basement D2 space.”

Despite the increase in popularity of these venues, the majority of operators have expanded at slower rate than other hospitality and leisure concepts. According to Restaurant Property it’s not the increase in rents that is stifling growth, the reason is to lack of suitable sites, in terms of size and location, coupled with planning difficulties encountered with the few sites there are.

“Given operators’ requirements tend to consist of a large unbroken space – preferably all on one floor – it makes their property requirements unique given London’s retail configuration,” says Tom Richards, surveyor – central London, pubs bars and restaurants.

“It is uncommon, especially in central London for a site to already have the appropriate planning uses in place. While spaces large enough for competitive socialising also require permissions that can pose additional difficulties due to the different uses needed and extended opening hours,” he says.

This has meant the agency is seeing sites in London which would be perfect for these concepts that don’t complete, simply because of planning and licencing issues.

“These factors have also meant we have generally seen these types of operators focus on one site at a time, rather than achieving the more rapid growth seen by other operators in the leisure and hospitality market,” says Rogers.

That’s not to say these types of operators aren’t aiming for c20 or 30 sites for example – and there are many investors wanting a piece of the action, he adds.

Prime central London venues are understandably a preference due to the high footfall of tourist and office consumers. That being said, the choice of location can vary from operator to operator but city centre locations are always of high priority, with more and more concepts looking at the likes of Birmingham, Manchester, Leeds and Brighton.

Within the capital, due to the lack of large single floorplate space in London, the West End is very much a target area for these concepts, adds Richards.

The number of new entrants to the market certainly shows no signs of slowing down at the moment, but with a lack of suitable sites, is this a sustainable long-term trend? The agency believes it is.

“Consumers throughout the UK are always keen to try new concepts, and are increasingly demanding more from their nights out, which is why experimental venues are so popular, while the element of competitiveness keeps them coming back,” says Rogers. “These elements make them attractive businesses from both an operator and landlord perspective and we anticipate seeing more competitors entering to the market soon.”