A report published by the Urban Land Institute (ULI), examines the impact that leisure and food and beverage (F&B) sectors have on overall shopping centre performance. As outlined in the paper, leisure and F&B are considered as a crucial component of the shopping centres’ future success since they are expected to provide a new significant stream of rental income, as well as additional benefits such as the attraction of a wider range of consumers for longer visits.
Data used in the research related to for eight shopping centres in Europe, with a gross lettable area (GLA) of 546,085m², that were recently upgraded or extended to include additional leisure and F&B uses. More specifically, abovementioned data included information about the size and breakdown of uses in the centre, as well as data on rents, sales, and vacancy rates. Furthermore, the shopping centre owners were asked to provide information related to footfall and dwell times per visitor. All conclusions drawn in the report were based on information and data analysis provided by Jones Lang LaSalle (JLL).
Key findings of the subject research are summarised as follows:
- According to the survey conducted to the ULI Retail and Entertainment Council members, F&B was ranked as 7.7 out of ten when it came to supporting the success of retailers in the shopping center compared with leisure, which was ranked as 5.6. In terms of contribution to rental income, F&B was ranked as a 6.4 by respondents , with leisure as 4.9
- Estimated rental value (ERV) growth and minimum guaranteed rental (MGR) growth for leisure and F&B showed strong increases at 15.8% and 11.3%, respectively
- Overall, survey respondents saw both leisure and F&B as positive in meeting the shopping center’s softer targets such as increasing dwell time and footfall
Based on data analysis findings and feedback received from survey respondents, leisure and F&B have stopped being an additional way to offer experience in centres to counter online shopping. Instead, they are considered as an essential component in maintaining a shopping centre’s competitiveness.
Download a copy of the report here