1MARKET INTELLIGENCE FROM COLLIERS INTERNATIONAL LEISURE

M A R K E T I N T E L L I G E N C E F R O M C O L L I E R S I N T E R N AT I O N A L L E I S U R E

The ability of food & drink and leisure amenities to boost footfall, dwell time and consumer spend is driving a revolution at both existing and new UK shopping centres.

Research from CACI has shown that shoppers who use the catering facilities in a centre will spend, on average, about 50% more than those who do not. The recent opening of a new IMAX cinema at British Land’s Broughton Shopping Park in Chester has seen footfall increase by 15% overall.

The new emphasis on increased

eating and drinking amenities in shopping centres has been vividly illustrated by new schemes such as Trinity Square Leeds and Friars Walk in Newport, but existing centres are now also looking at how to enhance their offer by re-engineering their leisure component.

intu, the leading owner and manager of prime regional shopping centres in the UK, has appointed Colliers International, as sole catering and leisure agent to market an enhanced casual dining offer at intu Chapelfield shopping centre in Norwich.

Colliers International Leisure Director, Ross Kirton, comments: “intu Chapelfield is a great example of an existing centre which has good potential to further leverage its standing in the

region by enhancing its food & drink and leisure offer.

“Preliminary discussions have begun with a number of established and innovative food and beverage occupiers and we are confident a unique dining experience can be delivered. This is an exciting opportunity for Colliers to extend its relationship with intu and deliver attractions that will excite the intu Chapelfield customers”.

intu Chapelfield attracts more than 12m customer visits each year to its wide choice of existing shops, such as House of Fraser, H&M, Zara, Apple, River Island, Superdry and Hugo Boss. To provide compelling experiences so that customers visit more often and stay for longer, the food and leisure offer will be enhanced, including some new

casual dining concepts, several of which are likely to be the first within the East Anglian region.

Colliers will review the feasibility of remodelling the food court to provide new restaurants and more leisure such as a boutique cinema to attract more evening visitors which will complement the retail offer and existing catering on Chapelfield Plain.

More than half the UK population visit intu branded shopping centres each year with some 300m customer visits. Rebecca Ryman, regional director of intu, said: “Norwich is listed 16th in the CACI Retail Rankings of Retail Footprint and Retail Expenditure. In addition to local residents, many of the shoppers in the city are students or tourists, especially day trippers. This

Leisure revolution continues at UK shopping centres

gives great potential to strengthen the choice of restaurants for all visitors to intu Chapelfield, increasing dwell times and benefiting our retailers and restaurateurs so their businesses can flourish.”

However, if it is clear what synergies that better food & drink and leisure amenities can deliver to shopping centres, it is essential to get the mix right.

Kirton observes: “It can be tempting for centres – particularly if they are struggling slightly – to see this kind of enhancement as a cure-all, but the truth is that these improvements are best deployed in centres which - like in Norwich - already have a clear identity and are looking to build on that.

“If a centre is approaching the initiative from a position of relative trading weakness then it is necessary to look at the entire offer rather than just explore where some additional food & drink or leisure amenities might be brought in.”

Issue 1 • Autumn / Winter 2015

New River Retail grows pub portfolio

Bowling’s back!

Page 8 Page 6

intu Chapelfield: an enhanced food & drink and leisure offer is planned

Toby Smith: what next for Novus Leisure?Page 4

Restaurant chains on the marchPage 3

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Watch me bounce

Colliers join Giggs and Neville team Jackson’s Row Development Company – the property company owned by Ryan Giggs and Gary Neville – has appointed Colliers International as sole leasing agents for the office and leisure elements of its £200m St Michael’s development in Manchester city centre.

Ross Kirton of Colliers comments: “The scheme will create a five-star hotel, shops, leisure, residential and offices, and we will be targeting aspirational dining concepts who are perhaps looking for their first site outside of London. There will also be a sky line bar with fabulous views across the city”.

Singapore-listed development company Rowsley, has purchased a stake in the 500,000 sq ft project for £40m.

Construction will begin next year.

Ross.Kirton@Colliers.com +44 (0)207 487 1615

Casual Dining on the moveCasual Dining Group (CDG) has bought the Las Iguanas and La Tasca groups in combined deals worth over £100m. The purchases have created an estate of almost 290 branded restaurants throughout the UK.

CDG plans 30 new sites over the next 10 months, whilst most are expected to fall under its flagship Bella Italia brand, seven are expected to become Las Iguanas sites.

The 41-strong Las Iguanas restaurant business has been acquired from mid-market private equity firm Bowmark Capital. Las Iguanas (pictured above) is known for its authentic South American dishes and range of premium cocktails. Colliers provided strategic property advice to CDG for both acquisitions.

Cinema openings on the upMore than 50 new cinemas are forecast to open in the UK over the next two years providing more than 180 screens a year – a substantial increase on the level of 2014 openings.

Whilst these openings remain dominated by the Vue, Odeon and Cineworld there are also new operators such a Curzon, Everyman and The Light who cater for a more focused demographic and are now complementing the mass market approach of the multiplexes.

Colliers’ Paul Hands comments: “We advise Curzon whose offer of diverse film selection and more luxurious seating with a licensed café/bar is proving attractive.

“Whilst affluent market towns and London villages remain their preferred locations, these operators are selectively considering shopping centre environments.”

Paul.Hands@Colliers.com +44 (0)121 265 7517

Restaurant chains place their orders

Darwin & Wallace evolve in Richmond

Despite being a relatively new concept to the UK, indoor trampolining and free jumping is being successfully rolled out at a growing number of locations.

There are now several new occupiers seeking representation such as Gravity who opened at Xscape in Yorkshire and also the Australian operator, Sky Zone. In certain locations, it is a concept that has proved a good fit for surplus space on leisure parks or in shopping centres.

Requirements range from 15,000-30,000 sq ft plus, as you might expect, a good ceiling height of around six metres.

A string of established and new restaurant chains are progressing ambitious expansion plans across the UK.

Following a successful re-vamp, Bella Italia has plans to open 70 new outlets in the next three years across retail parks and leisure parks as well as High Street locations.

Gourmet Burger Kitchen is to open 10 new sites by February of next year while the Côte chain is on course to open 15 new restaurants this year and should do a dozen more in 2016.

KFC has a fresh new look and is targeting 50 drive-thru restaurants in Greater London alone.

Bill’s is actively seeking representation in affluent northern towns and cities. Its

all-day offer is now extending into shopping centres: a new restaurant will open at Manchester’s Trafford Centre shortly with other representation in shopping centres expected.

There’s also evidence of successful London concepts spreading into the regions. Hawksmoor and Iberica have both chosen Manchester for their first ventures outside of the capital.

Also moving into new territories is Living Ventures which is considering to a variety of locations throughout the Midlands and South East for the roll-out of its Alchemist, Gusto and New World Trading Co formats.

Colliers International has sold The Lot in Richmond, London to Darwin & Wallace.

The all-day dining venue which will reflect the ‘lively and playful’ area, but also the calm of the nearby Thames and is set to open in November.

D&W Managing Director, Mel Marriott, said: “At Darwin & Wallace we always aim to avoid the obvious in all that we do with

our properties, and this one is no exception as it is architecturally challenging.

"Our strategy is to open unique sites in London’s local villages and take a tailored approach to each new space, drawing inspiration from each area’s individuality.”

Darwin & Wallace launched in August 2012 and also operate No.32 The Old Town, Clapham and No. 11 Pimlico Road.

5MARKET INTELLIGENCE FROM COLLIERS INTERNATIONAL LEISUREMARKET INTELLIGENCE FROM COLLIERS INTERNATIONAL LEISURE4

At midnight on Sunday, August 30th, the iconic London bar and restaurant, Tiger Tiger, closed its doors for a 10-day, £1m transformation.

Even by the quick-in/quick-out, high-value standards of the leisure re-fitting business this was an exceptional project.

Every hour a venue remains dark constitutes a double whammy of losing revenue while fixed costs like rent and rates pile up.

Toby Smith describes it as “having Lionel Messi on the bench rather than in the game”. Given that the St James’s venue constitutes around 10% of the Novus turnover, it’s easy to see why speed was of the essence. So work continued 24 hours around the clock until the job was done with spectacular results

Smith reports: “We’ve completely refitted the restaurant - Tiger Tiger is a very significant food business – and have made it more contemporary. We’ve spent more than £200,000 on giving it an amazing sound and light system. There’s a complete new back bar with new stations for speedier service and what was the old White Room has been transformed into LUXE.”

A comprehensive programme of capital expenditure is one of the features of Novus Leisure’s strategy since Smith took over last year: “Depending on which venues we choose to transform, we’re looking to spend about £3m a year for the next three years”.

Novus has a portfolio of “46 unique bars, restaurants and late-night experiences” which together with Tiger Tiger also encompasses venues such as Balls Brothers, Strawberry Moons and The Loop which have become part of the fabric of London’s night-life. The Tiger Tiger concept extends outside London to Croydon, Cardiff, Leeds, Manchester, Newcastle, Glasgow and Portsmouth but it is the Capital which remains the engine room of the business.

“We are very much in what we call the premium mainstream: venues for big nights out –whether they are

planned or spontaneous – and the celebration market. We have big square footage, big venues and we’re in the big volume business.”

Crucially, 30 Novus venues hold 3am bar licences. In London, while there has been huge growth in other areas of the Capital’s food and drink scene there are still relatively few places you can walk into after midnight to eat, drink and dance. The eventual introduction of the 24-hour tube service will further cement Novus’s position as London’s leading late night operator.

Focusing on the key trading times of the Novus portfolio was very much uppermost in Smith’s mind when he arrived last year from Stonegate.

“What I tried to do was to come in and re-affirm what the business is – which is unashamedly a late night bar and food business that operates predominately in central London. We started to concentrate on getting key nights back in growth. That meant getting Thursday, Friday, Saturday back in growth and then – within that – getting that key trading period of post-10pm back into growth mode.

“Whilst other parts of day are important it’s not where we take the

majority of our money. It’s not where the business had suffered and it wasn’t where the business was going to recover.”

In May, Hayfin Capital Management took control of Novus which has brought stability and certainty to the future strategy.“We’ve moved into what I would call normal running,” Smith reports.

“We have the sites, we have a stable operating platform, we’ve got four strong operating templates and we’ve been putting new offers in place, with new food and drink menus introduced and have started our capex programme which will be transformational.”

Whilst it’s still early days, Smith doesn’t rule out further acquisitions.

“We’ve got great sites and we are very aware of the competition for new sites particularly in London and how tough it is but equally we can add sites to our portfolio almost at zero additional running costs because we have the London infrastructure – we’re not in setup mode.

“We have a very positive platform with our new owners to be able to go and acquire sites. If the right opportunity presents itself – either single sites or small groups – then we would jump at it.”

With the all-important Christmas

trading period just around the corner, Smith reports that Novus already has 58,000 covers booked for the festive season.

“We’re 40% up on the corresponding period last year, but we’ve got a long way to go – we’re targeting over 170,000 Christmas covers this year.

“It’s always difficult to know precisely how Christmas trading will go until you’re in the thick of it. Will the champagne be flowing or will it be Prosecco? But at the moment the early booking profile is very positive.”

Smith is clearly relishing his new role: “At Novus, I know every general manager, every assistant general manager, every sales manager. It’s a big business but it’s quite an intimate business because of the venue locations.

“I can get to the majority of the sites within 20 minutes of leaving our office.”

He enjoys the hands-on nature of the job and is out “two or three nights a week visiting our bars and checking out the competition.”

Is there a fast car that whisks him from bar to bar?

He laughs: “No, it’s just me and my Oyster card: it’s quicker”.

It’s just under a year since Toby Smith took over the reins at Novus Leisure – the operator of some of the best bars in London and beyond. He talked to us about progress so far and his plans for the future.

Raising the barWhat I tried to do was to come in and re-affirm what the business is – which is unashamedly a late night bar and food business that operates predominately in central London

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Sushisamba into MayfairSushisamba is to open its second London restaurant at 11 Berkeley Street in Mayfair.

Owner Samba Brands is to launch a new unnamed concept at the site which will specialise in raw and barbeque cuisine. Samba Brands opened its first restaurant in the Capital, pictured right, on the 38th floor of 110 Bishopsgate in the Square Mile.

Berkeley Street has become a new hub of upmarket dining in Mayfair. Nobu and Novikov are both on the street. Colliers advised Arab Investments on the letting of the 5,000 sq ft unit at 11 Berkeley Street.

Jeremy Corbin and Chris King, the operators of The Wolseley restaurant in London’s Piccadilly, are opening their first neighbourhood restaurant in Islington. Corbin & King have acquired the former

Brown’s site fronting Islington Green in a deal brokered by Colliers International. The 200-cover brasserie will be known as Bellanger and is being designed by Brady Williams. It will open this autumn.

Corbin & King go local

The budget gym market has been a success story in recent years. There are now more than 220 health & fitness operators in the UK – which represents a remarkable growth rate of more than 20% during the last five years.

Pure Gym, which acquired LA Fitness this May, and rival The Gym Group have led this growth although

a number of competitors such as easyGym now have sizable estates.

The emergence of micro-gyms is suggesting that consumer habits in the gym market would appear to be mirroring supermarket shopping where people are blending discount and upmarket offers.

In the gym sector, many users have traded down

from mid-market clubs to a budget offer whilst also booking speciality classes in micro-gyms such as 1 Rebel, Heartcore and Barry's Bootcamp.

These studio-based clubs typically comprise 3,000-5,000 sq ft and focus on instructor-led high intensity classes which are often complemented with a wider retail provision of juice bars and training kit.

Health clubs boom Southbank instructions from St Martins

Gala Bingo is set to build a £5m club in Antelope Park in Southampton – its first new club for nine years. The company has also scrapped plans to close nine clubs and aims to invest £40m into its programme of club refurbishments. Both decisions have come as a result of a bingo tax reduction from 20% to 10% announced by the government in the 2014 budget.

Gala Bingo MD, Simon Wykes, commented, “The concept caters for all types of bingo players, both regular and new”.

NewRiver Retail grows its pub estateAdvised by Colliers International, NewRiver Retail has acquired a portfolio of 158 freehold pubs from Punch Taverns for £53.5m.

The portfolio is fully operational and, in contrast to many of the other portfolios sold in recent years, is in growth. NewRiver has appointed a specialist management company to run the estate on its behalf but will take an active role in looking for strategic investment opportunities, as well as unlocking capital growth by converting many of the current short term agreements onto longer, sustainable leases and delivery efficiencies across the estate.

Colliers worked with NewRiver throughout the acquisition, from

identifying the initial opportunity through to providing detailed due diligence on the assets and negotiating the deal with Punch and its advisers.

Colliers’ James Shorthouse who brokered the deal, comments: “NewRiver recognised the good value and attractive returns which the leased/tenanted pub sector offered to investors. As well as delivering good cash returns from day one, this portfolio includes opportunities for both revenue and capital growth”.

The acquisition follows NewRiver’s purchase of 202 pubs from Marston’s in 2013 and brings its total portfolio to more than 350 pubs.

James.Shorthouse@Colliers.com +44 (0)207 487 1670

A joint pitch by the Colliers Leisure and Retail Agency teams has won an instruction from St Martins Property to handle all Agency and Lease Advisory instructions on the retail and leisure elements at the More London and Hay’s Galleria estates on the southbank of the Thames.

More London is a major mixed-use estate covering more than 13 acres and its office occupiers include EY, PwC and Wragge Lawrence Graham.

Hay’s Galleria

Bingo!

MARKET INTELLIGENCE FROM COLLIERS INTERNATIONAL LEISURE8

Ten-pin Bowling is back in fashion. The public – and investors – are keen on a sector which provides a good time and long-dated income. Jonathan Essex looks at what’s happening in the lanes…

The bowling market is fragmented with the majority of sites held by independent operators although 50% of the lanes are run by the four leading operators.

The Original Bowling Company is the largest operator with 44 sites trading under the Hollywood Bowl and AMF Bowling brands. MFA Bowl has the second largest number of sites at 31 sites and Essenden is the third largest with 30 sites trading as Tenpin. The smallest chain is Bowlplex with 17 sites.

In April of this year, Electra Partners, the owner of The Original Bowling Company (TOBC), announced a bid to acquire Bowlplex. The Competition and Markets Authority raised concerns about six areas where both operators have sites but TOBC has agreed to sell six sites to appease the CMA’s concerns. There was then further corporate activity in June when it was announced that Harwood Capital would buy Essenden for £40.1m.

Investors take aim at bowling

Detailed specialist advice should be obtained before taking or refraining from any action as a result of the comments made in this publication, which are only intended as a brief introduction to the particular subject. © Colliers International November 2015

Editorial: Duncan Lamb Media | +44 (0)20 7533 3151

Design: Completely Group | +44 (0)1483 238920

Colliers LeisureColliers Leisure team is one of the most experienced in the UK, with unparalleled knowledge of the sector and extensive specialist experience, from health and fitness, pubs, bars and restaurants to marinas, sports facilities and leisure destinations. The team advises on acquisitions, leasing, disposals, investment, lease advisory, valuations, and M&A transactions, and has helped shape some of the UK’s most recognised leisure brands, the largest estates and the sector’s most exciting newcomers.+44 (0)20 7935 4499 | 50 George Street | London W1U 7GA | United Kingdom

Expansion from the established operators has seen TOBC opening four sites in recent years at Rochester, Milton Keynes, Maidstone and Cheltenham. There are more in the pipeline and due to open shortly. They tend to acquire sites of 20,000-25,000 sq ft at £9.00-£10.00 per sq ft on 20 year leases but with very large rent-free and capital contribution packages to pay for the high fit-out costs reducing the net effective rent significantly.

The increased popularity of bowling has seen new operators entering the market such as All Star Lanes and Bloomsbury Lanes. These concepts have been rolled out in urban locations, as opposed to the more traditional out-of-town leisure park sites. Their emphasis on providing good food and drink with 'bowling attached' has opened up a new customer base among city workers who are attracted as much by their good night out vibe as the bowling.

Investors are attracted to the sector both by the renewed popularity of the pastime and also the long income streams that flow from the leases which are typically taken by operators.

In March of this year, the Hollywood Bowl in Birmingham was sold for £5.1m representing a net initial yield of 6.45%. The site is let to Mitchells & Butlers plc on a 25-year lease from 2009 at an annual rent of £348,029 and is sublet to TOBC. Last month, Olim Property

purchased the freeholds of five TOBC centres on leases expiring in 2035 for £12.8m. These are older style sites trading as AMF Bowl.

Colliers has developed a lease advisory specialism in the sector. As

you would expect, this is an area of the leisure sector which requires a

particular understanding of how centres work in the context of their market.

During the past five years, we have advised operators on a number of successful

lease negotiations and are increasing our work in

the sector.

Jonathan.Essex@Colliers.com +44 (0)207 487 1905