Despite improving consumer engagement and an increase in site openings in town and city centres, it’s the regions and out-of-town locations that have seen the biggest boost, according to Savills. And it’s enabling them to return to profit.
There has been significant activity from F&B brands over the past three years, with a particularly competitive environment that has established itself in the out-of-town market, according to the property agent’s new leisure report.
Across all types of locations, many of the biggest name brands have been accelerating their growth since 2019, with Costa Coffee topping Savill’s table, with 256 openings, followed by Starbucks with 198 and KFC with 105.
But there are several less established operators that have been snapping up sites, including bubble tea café Mooboo (66), Caprinos Pizza (49) and Dixy Chicken (28).
The popularity of out-of-town destinations has lead to a significant uplift in the rents that can be achieved in this format, Savills said.
So far this year, the out-of-town market has seen 794 new openings – 31% of which have been F&B operators, with six F&B operators appearing in the top 20 table of out-of-town openings to Q3 2022: Tim Hortons (24 units); Greggs (23 units); Costa Coffee (21 units); McDonald’s (12 units); Starbucks (12 units) and Burger King (nine units).
“By far and away the strongest performance was in those units under 2,500 sq ft in 2021, with net effective rental growth of 26.0%, taking the average to £33.83 per square foot (psf) (by comparison, the average for the rest of the out-of-town retail market was £18.59 psf, with a growth of 10.3%),” the report read.
“Looking at the data on our drive-to and drive-thru deals in isolation, average net effective rents are even higher at over £40 psf. This is simply down to the volume of occupiers competing for space at this format.
“The likes of Costa Coffee and Starbucks are still as acquisitive as they have been in recent years; however, we are also seeing a number of new entrants to this market, all vying for space in this area, including Greggs, Tim Hortons and Five Guys.”
