here’s good news for fitness operators looking to grow: the property market for gyms is expanding, with landlords and developers seeing fitness as a relatively safe bet. New developments and the re-emergence of the high street are also offering more opportunities to gym groups searching for sites.
But in the UK at least, a major challenge remains: Under England’s planning use classes framework – which hasn’t been updated since 1987 – gyms and leisure centres can only occupy buildings designated under the Class D2 category, whereas shops and retail outlets sit in the far more abundant Class A1 category of building. Many big name operators have told Health Club Management in recent months that obtaining suitable properties is one of the biggest barriers to expansion.
Nevertheless, with landlords coming on-side, there are now more locations to choose from than previously. So how do operators pick the right one?
On the one hand, people’s habits are becoming more local; big supermarkets have already recognised this in their shift towards smaller, local sites. Tim Baker, chair of Touchstone Partners, says: “The places where people are going – and where they’re therefore wanting to use health clubs – are becoming more local. Operators need to acknowledge this.”
But on the other hand, increasing competition for prime floor space is beginning to push some health club operations into thinking outside the box. Retailers with a large footprint have been looking to downsize or share space, thus creating new opportunities for some gym groups to launch in-store health clubs – in the UK, for example, Xercise4Less has partnered with Tesco to do exactly this. “A clever operator should be talking to developers about ways it can complement other businesses in retail parks,” Baker adds.
So what are the changes, challenges and opportunities in the fitness property market? We ask our panel of operators for their thoughts.