AUTUMN 2017 A unique insigh ino he foo, beverage an leisure lanscape in four key norhern ciies: Mancheser, Lees, Liverpool an Sheffiel 1
FASTEST GROWING LEISURE CATEGORIES (y-o-y % change) NORTH WEST YORKSHIRE & HUMER 30% 56% ARS, PUS & CLUS MANCHESTER +65% more leisure vs. G average 21% 48% RESTAURANTS 15% WELCOME TO NORTHERN SOUL 18% LEEDS +44% CAFES & QSR more leisure vs. G average Over he las ecae, he Foo & everage (F&) marke has been hriving, growing wice as fas as he reail secor an aracing one an a half imes more iscreionary spen. The norh of he UK is no excepion, wih househols in he Norh Eas, Norh Wes an Yorkshire an he Humber spening he larges proporion of income on recreaion - ahea of all oher regions. The secor s growh has been unerpinne by changing consumer habis, increasing numbers of people eaing ou an consumers shifing owars experienial reail an leisure shopping rips. A greaer exen of shopping cenre exensions an refurbishmens are being eicae o F& an leisure faciliies as lanlors respon o he eman by maximising well imes an generaing increase spen associae wih F& use. This is alongsie he growh in populariy for compeiive social aciviies such as inoor crazy golf an ars, which can fill unwane or awkwar space. Occupiers are responing by iversifying heir offer, improving he qualiy an inroucing new echnology wih quick paymen mehos an inegrae elivery services. Whils he growh in he leisure secor is a naional ren, ifferen locaions are performing a ifferen raes, wih he opporuniy for operaors relian on he size of he marke, regional ases an emographic characerisics. As he infographic above shows, leisure caegories in Yorkshire an he Humber are growing a a faser rae han he Norh Wes, where here is alreay a bigger supply an he region is experiencing more measure growh. Wha works in one locaion will no necessarily be successful in anoher, as emonsrae by several Lonon-cenric operaors which have sruggle o successfully ransfer conceps beyon he capial. The mos prosperous an susainable locaions are hose which coninue o keep he offer fresh, bring new enrans o he region an carefully curae he offer o mee he emans of he local consumer. This repor consiers he F& an leisure marke wihin four major norhern ciies; he isrupers ha are challenging he inusry an we also share our views on he fuure of he secor. LIVERPOOL +71% more leisure vs.g average SHEFFIELD +45% more leisure vs.g average Sources: LDC, Deloie, ONS, Colliers Inernaional 2 3
ns Aelphi Sree ea la S re e ck fr iar CORN EXCHANGE ss r 50 psf ee NORTHERN QUARTER 15 psf G el R oa rea Way Olfi Trini y in a ce DEANSGATE ss S re e Peer R o e Liverp ool QUANTITY Deansgae 43 Unis ae nsg Fairfiel S ree Dea Whiworh S ree Wes a on a Caslefiel on a Lon The Gay Village Lon Wil bur ns re Mancheer Cenral DEANSGATE LOCKS ORIGINAL China Town a n R oa RAND s ree es y Dal aill Picc Pr Reg e While a number of popular conceps impore from he souh have sruggle, regional brans coninue o rae well coa RENTS CORRECT AS OF MID 2017 Deansgae Locks er hes C a Despie he significan growh in he number of new resaurans, ake-up remains srong from local operaors which have a eep unersaning of he ciy s eman. While a number of popular conceps impore from he souh have sruggle, regional brans such as Living Venures (Ausralasia, Guso, The Alchemis) an Alber s Schloss coninue o rae well. Renal levels wihin our sample piches are largely sable, wih he excepion of Deansgae Locks, where rens are now - an increase of 40% over he las wo years. The Corn Exchange remains he highes rene pich, where rens peake a 50 psf, alhough in our view, i is unlikely ha he final leings will be conclue a his level. New openings scheule for he remainer of 2017 inclue The Ivy a Spinningfiels; Alson ar & eef in he Corn Exchange an Kelebell Kichen as he final A3 uni in Parizia s Firs Sree evelopmen, which alreay inclues Gasworks rew ar; The Launree; The Liquor Sore an The Inian Tiffin om. Recen openings inclue: Fress, a Europan-syle brasserie in he Norhern Quarer; Ranall & Aubin, an Anglo-French brasserie on rige Sree; c & Rye, a coffee an cockail bar in Spring Garens an Impossible, a bar feauring cryogenically frozen cockails in he former ar 38 on Peer Sree. Mancheser s broa range of eaing esinaions looks se o coninue wih new locaions incluing he remoelling of he Arnale Cenre s foo cour o provie moern all ay casual ining; S Michael s mixe use evelopmen a Jackson s w an NOMA a he former co-op builings by Vicoria Saion. Similarly, suburban locaions such as Sockpor are also aracing eman - Where he Ligh Ges In is a Vicorian warehouse conversion, which is being ransforme ino a busling F& hub. 42% LEISURE SUPPLY 58% Reail 29% INDEPENDENT VS. MULTIPLE 71% Muliple Inepenen 29% 27% CATEGORY MIX R A ND INDEPENDENT RANDS Norhern Quarer 92% Inepenens DRINKING SIT-DOWN DINING Deansgae Locks 80% ars, Pubs & Clubs Corn Exchange 86% Resaurans 44% Cafes & QSR Resaurans ars, Pubs & Clubs Sources: LDC, Colliers Inernaional 4 Sr ee SPINNINGFIELDS Quay MANCHESTER An 5
Regen Sree Hospial Civic Quarer New THE LIGHT 30 psf e e Wes Sr GREEK STREET 33 psf e re s S er Pe S Financial Disric York a Shopping Disric VICTORIA GATE TRINITY LEEDS CALL LANE 24 psf Ars Quarer RENTS CORRECT AS OF MID 2017 a These new leisure hubs have resule in operaors opening a muliple locaions in Lees, such as The Alchmeis (Triniy Lees/ Greek Sree), e A One (Millennium Square/ oar Lane); Arc Inspiraion s Manahaa bar (Greek Sree/ Merrion Sree), along wih oher operaors which are acively seeking furher sies in he ciy. Core raing areas coninue o perform robusly an arac significan ineres when opporuniies become available, wih exising unis aracing srong premium consieraions such as he former Loch Fyne which was sol for over 500,000 afer a perio of compeiive biing. Perhaps mos ineresing is he re-emergence of he Greek Sree circui, which has seen a number of new occupiers ake represenaion afer a perio of sagnaion following he opening of Triniy Lees. oh schemes have inrouce a compelling caering offer o fee he appeie of consumers growing craving for experience an heare, from Lansec s Triniy Kichen he UK s firs auhenic inoor sree foo venue o D&D Lonon s wo resaurans in Vicoria Gae, roofop bar & grill Eas 59h an Japanese resauran Issho, which feaures a baa grill where iners can wach chefs prepare heir foo. e re Core raing areas coninue o perform robusly an arac significan ineres when opporuniies become available S ow Lees is one of he fases growing ciies in he UK an is F& marke Cr is flourishing a a similar rae. Recen reail evelopmens - incluing Lansec s Triniy Lees an Hammerson s Vicoria Gae - have creae new leisure esinaions, pulling he prime pich away from he norh an wes areas of he ciy cenre. s n in Po Ea LEEDS rewry Wharf 37% LEISURE SUPPLY 63% Reail 26% INDEPENDENT VS. MULTIPLE 74% More recen openings in he ciy cenre have been from regional operaors in he early sages of expansion, incluing Mancheser occupiers, Tau an Neighbourhoo, an Revere Pub Co s Los & Foun. Muliple Inepenen 29% 30% RAND ORIGINAL QUANTITY Triniy Lees 39 Unis R A ND INDEPENDENT RANDS Call Lane 90% Inepenens DRINKING SIT-DOWN DINING Call Lane 62% ars, Pubs & Clubs The Ligh 64% Resaurans Triniy Kichen is a concep ha is compleely unique o he Ciy of Lees an o he shopping cenre environmen. Cusomers ofen plan a reurn visi & recommen Triniy Kichen o friens on social meia, which creaes grea ineres as new cusomers are keen o sample he analizing ases & menus from all corners of he globe. Davi Maison General Manager, Triniy Lees 6 CATEGORY MIX 41% Cafes & QSR Resaurans ars, Pubs & Clubs Sources: LDC, Colliers Inernaional 7
mbroke P L im e S lace The n Sra Me Quarer CASTLE STREET 24 psf Lime Sree Gaeway CAVERN QUARTER 20 psf s Ren haw ee Sr LIVERPOOL ONE 62.50 psf Hopesree Quarer Leece n S Sra CONCERT SQUARE 22.50 psf erry Sree ree Alber Dock ALERT DOCK 25 psf China Town Kings Dock liverpool The vibrancy of he ciy coninues o arac boh innovaive new conceps an naional F& brans, which coninues o generae upwar renal pressure across he ciy s key F& piches R ORIGINAL QUANTITY Liverpool ONE 40 Unis R A ND INDEPENDENT RANDS Cavern Quarer 93% Inepenens The iversiy of he reail an F& offering has seaily improve in Liverpool in recen years an he energy of he ciy coninues o arac boh innovaive new conceps an naional F& brans. In our view, his broa range of eman will coninue o generae upwar renal pressure across he ciy s main F& piches. The area beween Paraise Sree an Seel Sree, borering Liverpool One, is also proving popular, wih Cosy Club; Circo; Cow She an Zoiac Lounge all having opene since December 2016. Deman from local an naional operaors remains srong for his locaion. ol Sree, renowne for is inepenen mix an vibrancy, has seen a raf of new F& oules ranging from coffee shops o inernaional sree foo incluing Re Dog Saloon; he vegearian Our Kichen; El Mexicana; Pancho s urrios; Vincen Asian Kichen an mos recenly announce, Taco ell. AND DRINKING Concer Square 86% ars, Pubs & Clubs SIT-DOWN DINING Liverpool ONE 60% Resaurans The populariy of Liverpool ONE an he reposiioning of Alber Dock are aracing significan operaor ineres, wih exising enans re-gearing leases a much higher rens. Renal values have ouble a Liverpool ONE since 2011 o 62.50, an rens have also seen srong increases of c.25% a Alber Dock over he las wo years (currenly 25 psf). Rens are sable in Concer Square ( 22.50 psf) an Cavern Quarer ( 20-25 psf), which is more focuse owars lae nigh rae. June saw he opening of he alic Triangle foo hall in he former Cains rewery, bringing foo, rink, live music an evens uner one roof. Inepenen sree foo venors inclue: Timmy Tikka; Slim s Pork Chop Express; Lile Furnace; Minigh Delivery; Hafla Hafle; IalFresh an Okopus. Alber Dock is a ruly unique locaion an i is our inenion o enhance he alreay high qualiy local an naional resauran an reail brans here wih new, fiercely inepenen an evolving brans. Simon Moscow Hea of Asse Managemen UK, Abereen Sanar Invesmens 8 RENTS CORRECT AS OF MID 2017 44% Over 17 new resaurans opene in Liverpool uring he firs half of he year, incluing Gino D Acampo an Izakaya on Casle Sree, joining he Neighbourhoo an Casle Sree Townhouse venues ha opene in lae 2016. Formerly an area of he ciy known for banking, Casle Sree an neighbouring srees have become a hriving foo an rink quarer. Sree 44% LEISURE SUPPLY 56% Reail 27% INDEPENDENT VS. MULTIPLE 73% Muliple Inepenen 25% 35% CATEGORY MIX 40% Cafes & QSR Resaurans ars, Pubs & Clubs Sources: LDC, Colliers Inernaional 9
el Ne h effi Sh ne La roa ern nk a WEST STREET 20 psf LEOPOLD SQUARE 30 psf a hi ST PAULS 28 psf op ss Glo a Ra W l ffo Su a se ke h ou a THE MOOR 30 psf Granville R oa Cl ar oa ry s R S M ary s G ae rocco ank ECCLESALL ROAD 27 psf sheffiel all les Ecc a 57% of he leisure sock in Sheffiel is mae up of cafes an casual ining locaions, he larges proporion ou of all he norhern ciies moniore. Resauran growh is currenly surpassing bars (+14% vs. +6%), wih he larges increases occurring in local an inepenen syle eaeries (83%), paricularly aroun Eccleshall a (rens 25-27 psf) an Wes Sree, he mos popular F& area (rens 15-20 psf). Recen openings on Wes Sree inclue Fire Pi, Sheffiel s firs inepenen smokehouse-syle bar an resauran, an Kuckoo, a high en cockail an popular inie rock & roll bar. Furher new inepenen resaurans an bars opening in 2017 have inclue Twise urger Co. on Glossop a, is secon resauran in he ciy, an OHM, a cockails, craf an upmarke sree foo bar in Wes One, Fizwilliam Sree. QUANTITY Ecclesall a 72 Unis 37% LEISURE SUPPLY The F& proposiion in he ciy will be furher enhance by he New Reail Quarer, where he 145,000 sq f office, pre-le o HSC, will be complemene by a reail an leisure hub. A sanalone leisure area is being creae on Charer w, which will resemble Chavasse Park in Liverpool ONE. The ciy cenre offering has been boose subsanially by he arrival of SWIPs The Moor evelopmen, incorporaing a nine screen cinema operae by The Ligh, ogeher wih a wealh of casual ining brans, incluing Pizza Express, GK an Zizzi. Early inicaions sugges ha The Ligh is raing above expecaions. A significan evelopmen for Sheffiel will be riish Lan s 300m leisure hall exension o Meaowhall Shopping Cenre. The 330,000 sq f space will feaure resaurans, a new cinema, bowling an oher experienial leisure, such as inoor golf or climbing walls. 63% Reail 17% INDEPENDENT VS. MULTIPLE 83% Muliple Inepenen 23% 26% CATEGORY MIX AND ORIGINAL RENTS CORRECT AS OF MID 2017 Sheffiel is a rapily eveloping ciy an is F& supply has coninue o grow from srengh o srengh. Resauran growh is currenly surpassing bars, wih he larges increases occurring in local an inepenen syle eaeries R Queems a S Ma Sh rew sb ury m ha She af S ree s We R A ND INDEPENDENT RANDS Wes Sree 83% Inepenens DRINKING SIT-DOWN DINING Wes Sree 43% ars, Pubs & Clubs Leopol Square 50% Resaurans 51% Cafes & QSR Resaurans ars, Pubs & Clubs Sources: LDC, Colliers Inernaional 10 11
isrupors Sree Foo & Foo Halls Over he pas few years, he riish have fallen in love wih sree foo an he phenomenal success of conceps such as Sree Feas, Time Ou an Kerb emonsraes he poenial of his F& secor. Sree foo is proving o be a winning formula for all paries involve. The consumer experiences an inviing an unique offer from emerging conceps, sar-up chefs an popular sree foo raers; occupiers are given an alernaive o he fixe coss of opening a sanalone uni; an for lanlors, hese unis are large space fillers which can also be complemene wih enerainmen, such as live bans, o rive foofall. The concep was firs inrouce o he shopping cenre environmen by LanSec s Triniy Kichen in Lees, which roaes is line up every six weeks. oxpark is expece o move norh, wih a number of poenial locaions uner iscussion, an Liverpool recenly saw he arrival of he alic Triangle in he former Cains rewery. Where space is no available, here have been noable successes in regular sree foo markes such as Mancheser s Piccailly Sree Foo Marke an SCRANcoas marke in Ancoas General Sore. We expec he growh of his concep o coninue naionally, bu he offer nees o be consiere carefully as i is no suiable in all locaions. Take Whie se shopping cenre as an example - is new leisure exension is primarily reliable, family brans, wih only one new marke enran Californian Kichen- which is much beer suie o is cusomer emographic. Social change, increasingly ech-savvy consumers an he rise of ever-emaning Millennials have been insrumenal o he isrupion of he F& scene. In he las few years, he home elivery marke has aken Lonon by sorm, sree foo has become he new social eaing fa an experienial leisure hubs which combine an ineracive gaming aciviy wih eaing an rinking are now compeing for spen agains raiional resaurans, bars an pubs. Home Delivery Delivery service apps, such as UberEATS an Deliveroo, have mae resauran-sanar foo quickly accessible o he family inner able (or sofa). For many operaors, home elivery has become a vial revenue sream, wih some resaurans receiving 20-30 orers per hour. As a resul, many businesses are now looking a reesigning heir resauran operaions an kichen esigns o capialise on his, whils evolving he experience for ea-in iners. The rapi growh an populariy of he Fooech inusry has le o he creaion of Deliveroo Eiions; kichens which offer space o paricular cuisines or brans ha are missing from an area, esigne only o accommoae chefs, kichen saff an elivery riers. This is an example of a growing wave of elivery only resaurans, which enable operaors o serve heir cusomers wihou he expense of having o hos hem. As well as cheaper ren an more flexible leases, he moel offers oher avanages for operaors, such as enabling new brans o es ou heir concep, or being able o change menus quickly, accoring o eman. In aiion, his moel is a lucraive way for lanlors o use awkwar, small or unwane space, such as basemens, o hos his new bree of enan. We have alreay sare o see his ren rickle ino regional locaions whereby naional akeaway brans are saring o evelop for he firs ime an we anicipae ha ake-up will coninue o grow ousie of he capial. As a resul, we expec his ren o compee more wih supermarkes an inepenen akeaways as consumers change he way hey ea a home. Experienial The leisure scene is booming as consumers are coninuously looking for more creaive ways o fin ayime an evening enerainmen. Experienial leisure is he laes ho leisure pursui - compeiive aciviies in a social seing, which ofen incorporaes an F& offering. Mancheser is a he forefron of his growh. Former rain saion, Grea Norhern, is home o Junkyar Golf, an inoor crazy golf course wih secre bars, which has recenly opene a secon sie nex o Piccailly saion. Similar venures inclue Paraise Islan in Mancheser an Sheffiel, as well as Jungle Rumble an Gheo Golf in Liverpool ieal spos o rink cockails whils esing your puing skills. Ping pong bars are also becoming increasingly popular. Lees base Jones ar Group operaes The xy all om in Lees, Liverpool, Huersfiel, Mancheser an Noingham. This venue combines pizza an cockails wih pool, beer pong an crazy golf. Similarly, Kosmonau an Tweny Tweny Two, in Mancheser, are furher prime examples of his niche, wih Lonon-base, ounce, also ue o embark on regional expansion. eyon hese conceps, experienial leisure covers a huge variey of enerainmen-le esinaions. The Escape om ren, where paricipans solve a puzzle o unlock he room, looks se for mass expansion, wih Escape Hun having recenly lise on AIM as par of an aggressive roll ou. As he elivery moel evelops I hink we are going o see proporionally greaer kichen capaciy wihin resauran buils an esign work o help segregae foo pick up an ining. Graham Turner Chairman of arburrio, Vial Ingreien an ETM group 12 13
Wha nex for leisure? Despie he EU referenum resul generaing boh economic an poliical uncerainy, o ae, he UK economy has performe surprisingly well, bu meium o long-erm performance remains unclear. A resilien secor In spie of economic uncerainy an squeeze househol buges, here has been a posiive shif owars iscreionary spening on experiences an he F&/leisure marke has clearly benefie. The esimae oal spen in he leisure secor is 238 billion, accouning for 20% of all consumer spening in 2016, a a 6.4% increase year-on-year. are moving away from he age ol iea of eaing ou as a rea. In recen years, he casual ining ren has become more an more prevalen, especially in Lonon an major regional ciies. However, afer a number of buoyan years, he A3 secor has enere unchare waers, wih much alk of oversupply in a range of locaions. A number of esablishe occupiers have curaile heir requiremens an in exreme circumsances, sough o off-loa new lease commimens before fiing-ou, as well as isposing of poorly performing leases. Consumers spen 1 in every 5 on leisure On average, consumers spen 1 in every 5 on leisure. This is preominanly on eaing ou, which represens 42% of all consumer spening on leisure pursuis. This is resonan of he fac ha cusomers 14 our key preicions Turnover leases o become more prevalen yy As occupiers seek o reuce exposure o fixe coss, we expec an increase in enans aking on unis on a urnover ren basis in orer o share he risk. yy Lanlors coul benefi in cerain locaions, paricularly hrough he abiliy o capure a proporion of he booming home elivery marke. roa sabilisaion of rens yy We anicipae he performance gap beween average an prime locaions o wien, an he bes prime piches o see furher renal growh. Home elivery services o expan naionally yy Home elivery services will compee wih supermarke offers an recipe box conceps raher han ea-in experiences. yy There will be an emergence of eliveryonly resaurans aking seconary space on flexible erms o grow he profile of a bran. Experience-le aciviies o ake cenre sage yy The experienial leisure secor will coninue o grow in major urban locaions. yy Sree Foo an Foo Halls will become inegral componens of a locaion s leisure mix. Casual ining secor o unergo furher srucural change yy The mos successful operaors will be hose wih an emphasis on service an experience. yy As well as improving he ining-in experience, here will be more consieraion for kichen an resauran esign an elivery service opions. yy Furher labour cos heawins likely as he impac of he Naional Living Wage an rexi ake effec. yy The cooling of he casual ining secor coul poenially impac he evelopmen pipeline, paricularly in seconary locaions. 15
NATIONAL COVERAGE, LEISURE SPECIALISM Through is Agency, Lease Avisory an Research & Forecasing eams, Colliers Inernaional provies a comprehensive service across he UK foo, beverage an leisure markes. I is one of he mos innovaive an iverse pars of he UK economy, an our service covers casual ining an fine ining resaurans, high sree bars an lae nigh venues hrough o grab-an-go sree foo oules an emerging experienial leisure conceps. The combine approach of our Agency an Lease Avisory eams, who have exhausive marke knowlege, has proven successful in securing he bes possible oucomes for our lanlor an occupier cliens. Meiculous marke research is a he hear of he Colliers service an we are able o prouce argee marke perspecives which relae o he specific nees of cliens. ss Kiron Hea of UK Agency Direc: +44 207 7487 1615 Mobile: +44 7917 899 175 ross.kiron@colliers.com Colin Sieber Direcor - Lease Avisory Direc: +44 161 831 3313 colin.sieber@colliers.com Ca Sevenson Senior Reail & Analys Direc: +44 20 7487 1732 Mobile: +44 7764 857 183 ca.sevenson@colliers.com This repor gives informaion base primarily on Colliers Inernaional aa, which may be helpful in anicipaing rens in he propery secor. However, no warrany is given as o he accuracy of, an no liabiliy for negligence is accepe in relaion o, he forecass, figures or conclusions conaine in his repor an hey mus no be relie on for invesmen or any oher purposes. This repor oes no consiue an mus no be reae as invesmen or valuaion avice or an offer o buy or sell propery. Sepember 2017 Colliers Inernaional is he license raing name of Colliers Inernaional Propery Avisers UK LLP (a limie liabiliy parnership regisere in Englan an Wales wih regisere number OC385143) an is subsiiary companies, he full lis of which can be foun on www.colliers.com/ukisclaimer. Our regisere office is a 50 George Sree, Lonon W1U 7GA. 17325 Colliers Inernaional UK 50 George Sree Lonon W1U 7GA colliers.com/uk/leisure