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Competitive socialising is getting cleverer, more profitable and changing shape. We explore the surge in demand for new floorspace which you cannot afford to ignore.
Words: David Thame
Have you heard of Hatchet Harry’s? The indoor axe-throwing business has six outlets in the UK and is about to open a seventh in Derby. Axe-throwing is, on the face of it, a niche activity. But the real novelty of this deal is not the axes but the location: Hatchet Harry is signing up for a former greetings card shop on Albion Street.
In its small way, this is a revolution, because competitive socialising – the catch-all expression for everything from crazy golf via axe throwing to ping pong – was born in an entirely different world. In 2018 when the first tentative concepts were launching in the UK, competitive socialising was almost exclusively to be found in large windowless basements. Today, a rapidly expanding post- pandemic market is looking at smaller spaces, in all kinds of locations – including prime retail – and is re-thinking concepts in ways that mean fit-outs have to be cleverer and more flexible. At the same time, landlords – who used to regard crazy golf bars as convenient floor-fillers and not much more – are starting to see real potential to improve the value of their real estate. This means smarter fit-outs to meet demand from corporate users. It all adds up to a might change in a sector that is barely four years old.
So, let’s get some context. First, exactly how much competitive socialising floorspace can we expect to see developed in the next 12-18 months? Estimates are hard to get right because operators’ formats differ so much, but according to Savills there are as many as 50 active requirements, with all but half a dozen for small or mid- size units of 8,000-15,000 sq ft. The balance are for larger units that can range from 30,000 sq ft to 50,000 sq ft.
It is probably safe to say the total current requirement is somewhere near either side of 1.5 million sq ft. But the important thing to know about this number is that the volume of suitable well-located commercial floorspace available for competitive socialising – large basements, former shops with big floorplates, all of it near established leisure pitches – is appreciably less than 1.5 million sq ft.
Meanwhile, competitive socialising concepts ha ve come out of the basement and onto the high street. Top of the list of examples comes Boom Battle Bar, a bar offering a bewildering range of games from axe throwing to beer pong, which has signed up for 16,000 sq ft on Oxford Street, the first to make it into such a top drawer location. Sascha Lewin, chief executive of London-based developer W.RE, explains why landlords are co-operating and how operators need new kinds of space.
“The default use for a windowless basement used to be storage space, or a plant room, and the next best option was a gym. Then along came competitive socialising, which often works without windows,” he says, hinting that landlords mainly saw competitive socialising as making the best of otherwise barely- lettable floorspace.
“But today it is different, landlords see competitive socialising as a real amenity for the building, if it is the right kind of competitive socialising. That’s why we signed up Pitch Golf London to our new Meard Street development. We felt they made the building a more exciting place to rent offices.”
Landlords see competitive socialising as a real amenity for the building, if it is the right kind of competitive socialising
Pitch have taken 8,000 sq ft and, like many of the new brand of competitive socialising, the feel is more upmarket (and less family-centred) and the emphasis is as much on the sport as on the socialising. The 20,000 sq ft units standard pre-pandemic are giving way to something more homely as some operators decide small is beautiful.
As Lewin explains, the latest concepts in competitive socialising usually need less floorspace. “New ideas like Formula 1’s driving concept, and it is interesting to see brands try and get into this area, probably won’t need so much floorspace,” he speculates, adding that the use of AI headsets means less floor area needed. The aim – to promote the brand, whether Formula 1 or Harry Potter – also demands less floorspace.
Whilst some concepts are opting for smaller spaces, others are planning to get bigger. Swingers, the crazy golf concept, is about to add 50% to its West End footprint as it adds another course and some outside socialising space. They plan a similar inflation in their growing list of United States locations.
Private equity firm Cain International is putting up the money for the expansion – private equity is behind most if not all competitive socialising operators – and say their growing focus on pleasing corporate occupiers means they need larger and smarter spaces. The rationale is that if it’s going to be a works outing or a client treat, it needs to be good.
“If you want a corporate event space – somewhere to hire out – and you want some outdoor space too, you wind up with something quite big,” says Cain’s global head of private equity Nick Franklin.
“Design has evolved too. In our New York outlet, opening in June, we will have three courses on one floor [their largest so far] and that has given us the opportunity to create some interesting transitions between those areas. We have a rose tunnel – a bit like a country lane with overgrown hedges – between two of them.”
The idea is that it will look amazing as the backdrop to users’ social media posts.
“The rose tunnel is very Instagrammable, and we’re increasing those kinds of opportunities to capture shared experience,” Franklin says.
Franklin is also very clear about how the socialising and the competition have to balance. “Food and a couple of drinks is the core of what they are doing, and the competition is having another point of energy whilst they are doing it. The more people who can do whatever it is, the more it works,” he says.
Other concepts work in reverse – the competitive golf or cricket is the main story, with the eating and drinking playing second fiddle. Franklin says we’ll see gravitation to more social, and less competitive, concepts as time goes on, simply because anything involving skill tends to exclude more people than it includes.
Other new concepts are replacing restaurants and bars
The concept is also paying top dollar: about £45 a sq ft, with a turnover top-up. Fit-out costs are equally toppy.
Other new concepts are replacing restaurants and bars. The new Sixes cricket-themed outlet at Great Portland Street fills a gap once occupied by a swish all-day dining offer. Rents and fit-out costs will be high here, too.
“This change from windowless basements to high end bars has been in progress since before the pandemic. The model has changed too, to appeal to more corporate users and young professionals. We’re also seeing these concepts move into shopping centres,” says Savills leisure analyst, Tom Whittington.
“First generation competitive socialising fitouts were low cost, but that grew during 2019 into a few million for the swishier locations, and the spending is still high. Some users want small smart spaces to attract professionals, others like Gravity was 30-80,000 sq ft spaces which fit multiple activities under one roof, ensuring dwell times increase and that nobody leaves until they’ve had a go on everything.”
There is also a new emphasis on design flexibility. Today’s crazy golf might morph into tomorrow’s beer pong or pool or augmented reality darts.
“The operators want flexible fitouts to allow them to stay relevant. So if, for instance, table tennis is suddenly no longer fashionable, then they can whip that bit of the setup out and try something else,” says Whittington.
Landlords have almost always contributed (heavily) to fit-out costs for competitive socialising. In the early days four or five years ago, when the panic about shops closing was at its height, they doled out the cash because it was worthwhile to create a potentially useful tenant in otherwise unlettable space. Now they spend a little less, but it is still worth spending if it means the right tenant mix.
It is hard to generalise how large the landlord contribution might be – from £20 to £40 a sq ft is not unusual, sometimes higher. It could mean seven-figure sums change hands. Generally the more people spend on cocktails the higher the fit-out contribution.
As landlord contributors and rent-free periods have fallen back, so operator profits have grown – and this has helped to keep the fit-out spend high. Smaller floorspace needs also militate to fancier fit-outs. The more bar-like a concept is, the smarter the look.
“Some concepts can get away with 4,000 sq ft, there are a few with 3,500 sq ft. They are making money. A traditional leisure operator might be happy with £15,000 a week turnover. But competitive socialising, by adding something extra, can hope for £100,000 a week. That is why landlords are embracing it,” says CBRE senior director Nigel Costain.
With around 1.5 million sq ft of growth likely this year, and some big fitout budgets to target, this is not a sector you can afford to ignore – even if you’ve never heard of Hatchet Harry.
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