WORKOUT FULL BODY A REVIEW OF THE CENTRAL LONDON GYM MARKET 2018/2019 - Colliers International
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FULL BODY
WORKOUT
A REVIEW OF THE CENTRAL
LONDON GYM MARKET
2018/2019
FULL BODY WORKO UT F UL L BODY WORKOUT
A R E V I E W O F T HE C E NT RA L LON DON GY M M A RKET A R E V IE W O F TH E C E NT R A L LO ND O N G Y M M A R K E T
THE GYM MARKET
IN GREAT SHAPE
Welcome to the 2018/2019 edition of the travel further and pay more for fitness. As
Central London Gym Market Review, an in-depth such the gym should be considered a key
look at the gym sector, tracking the consumer amenity for office workers and in residential
trends that are impacting the market outlook. developments alike.
The group exercise phenomenon has The future for Central London’s gym market
led to a booming studio gym market and looks bright. With competitive bidding
reinvigorated a number of traditional gym witnessed on many new opportunities, it
offers, in an era where gyms are no longer is enjoying a healthy rental market and
bland spaces full of treadmills and free illustrates how gyms now occupy a stronger
weights. position than ever in the UK’s alternative
assets market.
In this age of Instagram and social media
gyms are now having to adapt to the We hope you enjoy this latest edition of the
consumer appetite for design-led, beautiful Colliers Central London Gym Market Review,
surroundings. Similarly, the gym is moving which has been written based on specific
away from being just a place to work out and rental property data sourced by Colliers
is now becoming a place to socialise, relax – International, supported by consumer intel
and even date. taken from a 3,000-person consumer survey.
With people favouring a healthier lifestyle
and given the clear mental health benefits Ross Kirton
of working out, consumers are willing to Head of UK Leisure Agency
Colliers International
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BREA KDOW N BY CATEGORY:
INCREASING Monthly Gym Example
BENCH
Membership Facilities Operators
STRENGTH
Budget >£50 Gym & Studio PureGym
(limited classes) easyGym
£
A MARKET SUMMARY
Mid-market £50-£100 Gym & Studio DW Fitness First
The UK’s health and fitness market is at an all-time high – (possibly pool) Nuffield Health
££
especially in London where fitness has become a way of life.
The private health and fitness club market in the UK
continues to grow and is estimated to be worth £3.2 billion in
market value, with 5.8 million members in 2018. The value of Luxury £100+ Gym, studio, pool, F&B offer Third Space
the sector is likely to grow to £3.5 billion by 2022. (possibly medical, specialist facilities) Virgin Active
£££ Collection
Fuelling the market nationally are the low-cost and budget
gym operators, with hungry expansion plans. However, in
Central London, the studio gyms sector is booming with a
range of concepts and class workouts, while the premium Studio Credits Specialist Barry’s Bootcamp
market’s expansion is on the up with a broad range of Studio KOBOX
facilities for the seasoned fitness fanatic. In Central London, ££££
where space continues to be in high demand, a host of new,
stylised concepts have emerged, which aim to create the
euphoria previous generations sought from bars and clubs.
With wellbeing and health being higher on people’s agenda,
many clubs have sought to increase the space provision
for secondary spend within their units. As a result, many
occupiers have sought partnerships with groups such as HIIT
Kitchen and Joe & the Juice, as well as offering their own
smoothies, juices and food boxes. While at the gym, +£17.98 +£19.47 +£16.44
people spend, on on protein on athleisure on healthy
average, an additional... food & drinks & sportswear meal plans
4 5
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CAPITAL
GAINS WEIGHT
In the Central London market, the landscape for health and fitness has changed
dramatically in recent years.
While it was once dominated by mid-market branded groups such as Fitness
86
First and LA Fitness, the mid-market’s stronghold has weakened with a
number of new concepts and operating formats emerging onto the market.
%
As a result of this diversification the mid-market sector now only represents
SPEND OVER 19% of the overall London gym market. Instead, the market is now
AN HOUR AT dominated by studio gyms making up 41% of clubs in the capital. However,
with average floorspaces of 4,216 sq ft, studio gyms only represent 8% of
THE GYM overall floorspace in the London gym market.
T H IRD SPACE 6 7
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By comparison the premium market counts With more operators seeking a better
for 18% of clubs but counts for over half ground floor provision as part of their
of all floor space, averaging nearly 34,250 demise, finding space for gym use a never
sq ft of floorspace due to the provision of ending challenge, operators and landlords
swimming pools, specialist equipment areas need to look outside of the box for identifying
such as altitude conditioned studios and space for health and fitness use.
food & beverage areas. The budget / low
cost sector has made steady inroads in the
capital with 31 clubs with average floor area
of 14,579 sq ft.
Studio
Studio
Premium
Premium
M/Mkt
M/Mkt
BRE AKD OW N BY CAT EG ORBudget
Y : Budget
ST UDI O
8% 8%
P REM I UM 21 21
% %
20 20% %
M /M KT
BU D GET
42%42%
N O OF GYMS FLOORSPACE
17%17%
19 19
% %
55%55%
18%18%
AVE RAGE REN T S BY CLUB T Y PE
£15.69 PSF
£12.99 PSF
£23.70 PSF
£32.20 PSF
BUDGET MID-MARKET PREMIUM STUDIO
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STUDIO GYMS
86 %
WOULD MAKE
ARRANGEMENTS WITH
FRIENDS / PARTNERS
The popularity of studio gym segment has erupted, the mono clubs have adjusted their model by
AROUND A GYM CLASS
thanks in part to its focused growth on core central adding additional studios and classes to grow
London locations typically near business hubs. market share. For example, Psycle, which
initially opened with a primarily indoor cycling
Unlike traditional gyms, these concepts are
offer, now provides a range of other class types
typically pay per class experiences - although
– offering strength, barre and yoga classes at its
some do offer block memberships. Due to their
Shoreditch venue. It is also expanding its original
compact formats, their average size is 4,216 sq
unit at Mortimer Street to take more space for
ft which represents 7 per cent of the total floor
an additional studio in order to broaden its offer.
space for health and fitness use in the capital.
As such, we anticipate floorspace requirements
Overseas operators are helping to lead the way will rise for this segment. The flexibility of the
on studio growth. For example, the Australian studio model has enabled consumers to mix and
brand F45 has taken the capital by storm, with match their exercise routines between different
venue locations already in the double digits in venues and test out various concepts. However,
a very short period of time. Similarly, Barry’s the capital’s love for HIIT-based exercise
Bootcamp, known for being the “original high continues to gain momentum, resulting in this
intensity workout”, remains highly popular and being the most acquisitive sub sector.
has expanded its footprint. Meanwhile, group
Market activity is also likely to remain strong,
exercise concepts such as 1Rebel, which offers
with new openings from 1Rebel, Sweat by BXR
live music, light shows, dancing and high energy
in Canary Wharf and the TRX-based concept
levels, draws parallels to a typical club scene,
Equilibrium opening in Kings Cross. Perhaps
ensuring the emphasis is as much on it being a
unsurprisingly, rents in the studio gym sector
social experience as it is a workout.
remain buoyant with average rents across the
With unprecedented growth and intensified sector now averaging £32.20 psf, with notable
consumer demand for best in class, many of hotspots.
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BUDGET &
MID-MARKET
Due to the erosion of the mid-market model, a trend the low-cost model has continued to evolve with
which is being mirrored in many retail and leisure new equipment and many now offering a raft of
sectors, there has been increasing competition from free classes.
all other parts of the market, most notably the low
-cost sector. Having successfully acquired and rebranded
a number of former mid-market clubs in the
Its expansion has been driven by both single capital, the boundaries between these two
site acquisitions and corporate activity, such as operating formats is becoming increasingly
PureGym’s acquisition of Soho Gyms and its ten opaque. Analysis of our rental database found
fitness clubs in central London in June 2018; as that, on average, low-cost operators are paying
a result, 20 per cent of all floorspace is now in a £2.70 psf more in rent than midmarket groups.
low-cost operating format. We anticipate this to be a result of competitive
bidding scenarios and the race for space led by
The low-cost model has been championed
The Gym Group and PureGym.
growing the sector by offering affordable fitness
35
to a high number of people. While some use With further representation in the capital clearly
this as a stepping stone as they seek a healthier on the horizon and an evolved design in a bid to
%
lifestyle, many consumers are opting to mix and appeal to the capital’s gym goers, the low-cost
OF PEOPLE WANT HIIT OR YOGA match by retaining a low-cost membership and model looks likely to continue to be a key driver
supplementing it with pay per class experiences for growth and consolidation in the sector.
CLASSES TO BE INCLUDED AS PART at studio gyms. Despite its apparent budget offer,
OF THE WIDER GYM OFFERING
PUREGY M 12 13FULL BODY WORKO UT F UL L BODY WORKOUT
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LUXURY CLUBS
Representing 18 per cent of all clubs in London, by such as Cryotherapy and nutrition programmes
number of outlets, the premium sector accounts for are also available. The group is expected to open
55 per cent of all gym floorspace, with average club further outlets of its core Equinox brand in The
38
sizes of 34,250 sq ft. Stage building, Shoreditch, in 2019 with the 15
%
Leading the way is Third Space, which opened its St Helens development in the City set to quickly
fifth venue at Minster Court in the City in Summer follow suit.
2018. The space boasts the cleanest air in the
OF PEOPLE WOULD
With the group exercise phenomenon gaining
square mile with an impressive filtering system. momentum, the premium sector has invested PAY MORE OR TRAVEL
The group, who’s Canary Wharf site is Europe’s heavily to maintain market share. Groups such FURTHER FOR A
largest, plans to open one a year over the next few as Virgin Active Collection and Harbour Club have
years starting with a 47,000 sq ft club in Islington
BOUTIQUE GYM.
both converted traditional gym floor space into
Square in Spring 2019. It has also committed to further studios, as well as installing wearable
the Wood Wharf development in the Docklands. heart rate based system that uses wireless and
The premium sector has continued to evolve cloud technology to accurately and conveniently
and innovate, significantly raising the bar in monitor physical activity.
terms of luxury over the last five years and With such large floorspace requirements, it is
offering an alternative to the ‘private members unsurprising that activity in the luxury sector is
club’. For example, American hospitality brand largely linked to new developments where such
Equinox launched its upscale concept, E By space can be more easily incorporated. With
Equinox, at St James in December 2017, which higher membership levels, defined requirements
comes with a £350 per month membership and target locations, they typically have the
tag. E by Equinox combines the latest in fitness highest rents of all the traditional ‘big floor filler’
technology and premium personal training clubs, with average rents of £23.70 psf. With
with high-end aesthetics and lifestyle services, increased competition for space from experiential
such as its bespoke body composition services, leisure concepts such as Flightclub and
complementary laundry service and food and Puttshack, rental levels are likely to intensify.
beverage offering. Advanced medical facilities
25% 21% 15%
would like to be would like an would like to
offered spa or onsite doctor or have the option of
beauty treatments physiotherapist concierge services
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THE NEW
35 %
GO TO DE-STRESS
SOCIAL SPACE
31% AGREE IT HAS
IMPROVED THEIR
MENTAL HEALTH
From the Government’s April 2018 levy on Now considered a legitimate ‘third space’ by
soft drinks, to the ‘war on obesity’, Britons a significant number people, a greater range
are constantly reminded of the importance of amenities and classes, better accessibility
of looking after themselves – through diet, in relation to work or home, and creative or
exercise and wellbeing. boutique layouts were all legitimate reasons
There is also the influence (some might say to spend more on gym membership.
pressure) from social media to maintain a Similarly, with many gyms moving away
certain lifestyle and body image, and the from sterile space for solo training it is now
popularity of Instagram is driving the demand becoming a place to workout, socialise –
by consumers for beautiful or experiential and even date.
spaces.
79% of people go to the gym with
39% of people follow gym, health & friends or colleagues
fitness influencers on Instagram 75% would go to the gym on a date
This growing demand presents landlords With a large number of people also going
with a real opportunity to start thinking to the gym to switch-off or destress, gyms
creatively about the way gyms are located within larger mixed-use, office led
incorporated into wider residential or mixed- developments could improve the productivity
use developments. and wellbeing of workforces located within
the immediate area.
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N O OF GYMS / AVG M ONTHLY COST
WORKPLACE
POTENTIAL FOR NEW GYMS
RATIO OF WORKERS: GYMS
> 30,000
TO WORKOUT
RATIO OF WORKERS: GYMS
22,000 – 30,000
King's Cross
RATIO OF WORKERS: GYMS 5 Gyms
< 22,000 Av £49 month
With monthly membership and credits counting based on current provision. The office development
for the majority of revenues, attracting sufficient pipeline is used as a proxy to project the number of City Fringe Eastern Fringe
& Shoreditch
members is critical to a club’s success. Outside workers to 2019, which then gives a resultant view Farringdon
10 Gyms
4 Gyms
4 Gyms Av £99 month
of Central London, a key metric for this is having a on the number of additional gyms each area could Av £89 month
Bloomsbury Av £31 month
significant residential population within the gym’s support over the next two years, based on both the Fitzrovia 7 Gyms
specific drive time. However, in the capital, locating existing gap and new workers. Marylebone 5 Gyms Av £60 month
the areas with a high density workforce is key. Paddington 6 Gyms Av £84 month
Our research found Central London could support Av £93 month
2 Gyms
As a result, using a ratio of workers per gym a net increase of 32 gyms to reach the benchmark Notting Hill &
Av £108 month City Core
Bayswater
can provide a powerful metric for assessing the workers per gym, with 11 of the 18 sub-markets 4 Gyms Soho
Holborn & 31 Gyms
Covent Garden Av £113 month
current gym provision in an area and identifying showing an under-supply – most notably towards Av £92 month 4 Gyms 8 Gyms
any potential gaps for further clubs. Based on the east. In fact, this metric is likely to under- Av £86 month Av £71 month
12.2 per cent of the adult population (18-70) being estimate potential, given many of these sub-
members of a gym (Sources: Mintel, Experian) and markets will also have a significant residential Docklands
there being, on average, 3,000 members per club, element to demand – for example in Kensington & Mayfair & St James South Bank 3 Gyms
6 Gyms 12 gyms Av £120 month
our figures estimate a catchment of around 25,000 Chelsea. It is also possible that the proportion of Av £72 month Av £58 month
workers would be needed to support a traditional adults with gym memberships is higher in Central
gym. We estimate a studio concept, given the lower London compared to the rest of UK, owing to the Kensington &
cost base, could be supported by a significantly generally younger demographic. Chelsea Belgravia
smaller catchment. 10 Gyms 5 Gyms
While the City Core would seem like the obvious Av £122 month Av £97 month
choice with office workers on tap, the reality is that • c .25,000 worker catchment
5 2% of people exercise more this is a particularly competitive market and certain Victoria & should support membership levels
intensely during weekdays Westminster
occupiers may be better off selecting a growth area 5 Gyms • Research suggests scope for at least
The analysis looked at how each of the London with lower existing provision. However, this holistic Av £86 month 32 new London gyms
office sub-markets compared to this benchmark view does not take into consideration demand for
particular specialist class based clubs. Top 5 locations with
additional gym potential are:
• Farringdon (10)
• Eastern Fringe (6)
• Mayfair / St James (6)
• Victoria / Westminster (5)
• Shoreditch (4)
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VIRGIN ACTIV E COL L ECT I ON
LOOKING FORWARD
viable alternative to rooftop or restaurant amenity. makes a compelling case for the growth of studio
A sky gym comes without the issues of refuge gyms in strong affluent neighbourhood locations.
and additional goods lifts typically associated with
With a raft of new residential developments
restaurants, while offering the chance to work out
Consumer interest in maintaining a healthier lifestyle Guy Williams; and Baltics low-cost brand People in the capital, prospective residents will
with epic views of the capital.
and better levels of wellbeing has never been Fitness. want – and expect – a fitness room or gym in
stronger, with our research indicating consumer Although new developments are ideally placed their development. Accordingly, with careful
In the studio model trends are still showing strong to incorporate gym uses, space could also come consideration at design stages, underutilised
spending on gym-related activities is almost on par
demand for core concepts such as HIIT, cycling from a number of other underused spaces, resident gyms could be expanded and
with ‘going out’ (drinking and dining out). While the
and yoga, however we also anticipate a number of such as office and mixed-use basements. The commercialised to provide better facilities,
landscape has dramatically changed, with a number
new operating concepts emerging in 2019, such as conversion of lower ground floors has provided catering for both residents as well as general
of new openings and further committed sites coming
boutique bouldering and immersive rowing group a steady stream of new gym opportunities in the memberships.
to fruition, demand for more space – across the studio,
exercise classes. past, and while many opportunities have already
premium and low cost models – remains strong.
Meanwhile, in the premium sector there are a been utilised, others have yet to be exploited. illennials drink less compared to
M
2019 will see the arrival of American brand Peloton
number of pre-planned openings on the horizon in Similarly, the downturn in the retail sector is previous generations. They are more
in the London market. The concept combines
several mixed-use developments. These are set to fuelling space for studio gym concepts where concerned about health and wellbeing*
an indoor cycling studio with a retail arm where
further expand London’s gym proposition and signal rental parameters permit.
customers can purchase their bespoke bike that Overall, with such a vibrant mix of players
a step further towards a health-focussed members
comes with an inbuilt 22 inch HD screen, which Being in close proximity to good schools and operating in the market, we forecast further
clubs. Opportunities for growth in this segment
offers a range of immersive cycling classes transport used to strongly dictate where corporate activity across the sector, particularly
are not easily accessible, meaning premium
streamed daily to your bike at home. Other Londoners would choose to live. But with our at the low cost and studio gym sectors. While
operators will need to look outside of the box for
concepts expected to debut include: SYNC by research revealing that 78 per cent of people now landlords and occupiers alike need to be cautious
opportunities. With a third of our survey stating
Dame Jessica Ennis-Hill; Arena 8, which is backed believe that having a good gym or health club is to prevent over expansion in certain sub markets,
they would be willing to pay more for a rooftop or
by Soho House Chief Operating Officer Martin an important factor in choosing where to live, this the occupational market remains in great health.
sky line gym, landlords and developers now have a
Kuczmarski and Chief Development Director
20 21
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CONTACT US
Colliers International’s specialist Leisure Agency and Leisure Lease
Advisory teams provide market leading services across the diverse
London Health & Fitness sector.
For more details on our services, please contact us below:
Agency & Development Lease Advisory Research & Forecasting
Ross Kirton Nigel Ball Mark Charlton
Head of UK Leisure Agency Director Head of Research and Forecasting
+44 20 7487 1615 +44 20 7487 1905 +44 20 7487 1720
ross.kirton@colliers.com nigel.ball@colliers.com mark.charlton@colliers.com
Rachel Stern Mark Elbourne Oliver Kolodseike
Surveyor Director Senior Property Economist
+44 20 7487 1823 +44 20 7344 6599 +44 20 7487 1671
rachel.stern@colliers.com mark.elbourne@colliers.com oliver.kolodseike@colliers.com
Abban Magos Tom Warren
Surveyor Surveyor
+44 20 7344 6732 +44 20 7344 6642
abban.magos@colliers.com tom.warren@colliers.com
22 23 1 REBEL50 George Street | London W1U 7GA | United Kingdom This report gives information based primarily on Colliers International data, which may be helpful in anticipating trends in the property sector. However, no warranty is given as to the accuracy of, and no liability for negligence is accepted in relation to, the forecasts, figures or conclusions contained in this report and they must not be relied on for investment or any other purposes. This report does not constitute and must not be treated as investment or valuation advice or an offer to buy or sell property. Colliers International is the licensed trading name of Colliers International Property Advisers UK LLP (a limited liability partnership registered in England and Wales with registered number OC385143) and its subsidiary companies, the full list of which can be found on www.colliers.com/ukdisclaimer. Our registered office is at 50 George Street, London W1U 7GA.This publication is the copyrighted property of Colliers International and/or its licensor(s). © 2018. All rights reserved. Sample size info: 3,005 people were questioned, with 2,005 people questioned in London and 1,000 people questioned from elsewhere in the UK. Of those questioned, 55 per cent were male and 45 per cent were female. The age group breakdown is as follows: 26-35, 1,197 (47 per cent); 36-45, 888 (26 per cent); 46-55, 426. From the sample, 59 per cent had a yearly income of £40,000 or more; 75 per cent were full-time employed; 59 per cent were married. Of those surveyed, 65 per cent had active gym memberships and 78 per cent had some type of membership, including active, pay-as-you-go, pay-per-class and paid-subsidised. The model split breaks down in the following way: budget membership, 54 per cent; mid-market membership, 37 per cent; luxury membership, 32 per cent.
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