Exercise is basically the new clubbing. At least, that’s what Casey Phillips, a property agent at Shelley Sandzer, tells me as we’re discussing why the fitness industry is currently booming.
“Instead of getting drunk, you do a class together,” he says. “You just feel incredible afterwards.”
The wellness and fitness industry is estimated to reach a value of £22.8bn by 2020, according to Statista. Walk just a few steps outside your office and you can see the physical evidence of this on the streets of London: gyms are popping up everywhere.
This could be good news for landlords, who are facing the disappearance of several tenants as retailers and restaurants cut down their portfolios. A raft of company voluntary arrangements (CVAs) in recent months has left many property owners without occupants or receiving dramatically slashed rents.
But for health clubs and gyms, expansion is the name of the game.
“The sector is so active, it’s almost a landgrab for space,” says Phillips “It’s like a gold rush. Everyone’s just looking at anything they can.”
Part of this boom is down to a rise in the number of smaller chains and boutique gyms.
Phillips cites Xtend Barre and Triyoga as examples of fresh brands he has found homes for recently.
In fact, his work on clubs and gyms now dwarfs the amount of time he spends sourcing sites for shops and restaurants.
The rise of the boutique gym has been so fast because its requirements are different. Whereas more traditional brands need huge floor plates to accommodate as many machines as possible, new concepts are able to adapt to smaller or unusual spaces.
One operator which fits the bill is F45, a concept imported to our shores from Australia, which is rapidly expanding its presence through a franchising model. Less than four years old, the business already has more than 1,000 studios worldwide, including several in London.
In his time at the head of the company, founder Rob Deutsch has seen more and more landlords pay attention to gyms as important anchor tenants.
“Big shopping centre operators are now coming to us,” says Deutsch. “That didn’t happen before.”
The concept of F45 is simple. Instead of paying for a pricey personal trainer, customers attend a group training session and complete 45 minutes of intense workouts.
It can expand particularly quickly because it sells studios to franchisees, with a full set-up cost of around £200,000.
This can be made back in a matter of months, says Deutsch, due to the popularity of the sessions: “The economics of the model is very tight.”
The other reason it can slot into former retail spaces is the strict approach to equipment, which Deutsch says has to be practical and multifunctional to earn its place on the gym floor. “Our philosophy is if the equipment can’t be moved to the other side of the room, we don’t have it.”
That’s why the concept has been easy to install in some unlikely places, which in London include the basement of an Itsu restaurant that would otherwise have gone to waste.
Deutsch even hints that F45 is in talks about taking over some sites from a failing retailer in the US.
While he is tight-lipped on the possible deal, it is just one example of where gyms are picking up the slack left by struggling businesses.
The collapse of any chain is bad news for business, but it opens up a big opportunity for the leisure sector. The Gym Group told City A.M. earlier this year that it has been eyeing up some of the former Toys R Us sites in the UK.
But with the property world still trying to deal with the fallout of closures and CVAs across the retail and casual dining sectors, is the gym boom too good to be true?
It has already been widely acknowledged that one of the problems behind this year’s domino-chain of restaurant closures was over-expansion.
“There are similar characteristics,” admits David Bell, director of leisure at Savills. That gold rush for space has, he says, meant several fitness operators are paying big rents. Some form of adjustment seems inevitable.
“There’s going to be consolidation as there always is,” he says. “That will happen over the next three to five years.”
However, Bell is relatively relaxed about the future. “The fitness market is actually bucking the trend compared to retail and restaurants,” he says. “It’s all linked to health and wellbeing and to millennials. I think it is driven by tech and social media.”
As long as customers are lusting after Instagram-worthy workout shots, fitness concepts will keep growing and keep taking the spaces left empty by other businesses.