"Leisure Real Estate": Capital and new operators are there, but...
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According to the figures of the research center BAT-Freizeitforschungsinstitut in Hamburg, there is absolutely no reason to cover Germany with leisure facilities, urban entertainment centres or leisure-oriented shopping malls. The majority of Germans stay at home during their leisure time; outside activities are the exception. The gap between budget and luxury is widening and those who go on vacation are looking for recreation or deliberate contrasts to everyday life. The demographic great white hope of the future, people over 50, for example, does not feel attracted by today's shopping and theme centres. They go to the theatre, to church or do sport instead. Is it any wonder? According to Dr. Ulrich Reinhardt, Head of Sponsored Research at BAT, today's leisure facilities are exchangeable: in terms of architecture, range of products and their (too) dense building method. They lack service, ambience, emotional offers and surprises.
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| The new BMW world near the Olympic Park Munich photo: BMW |
"Stimulus" is therefore the keyword for successful leisure properties. If such projects manage to connect indoor and outdoor activities, they face a bright future in Germany with its changeable weather. There is certainly no lack in capital: exactly as in the classic hotel industry, the interest of foreign funds and private equity investors is growing. Classic financing has become a no-no; that is what several conference speakers agreed on. In Great Britain, there are already special funds for fitness clubs, says Kai Schimmelfeder, Managing Director of Feder Consulting from Hamburg, specialised in leisure, fitness and wellness.
In his speech about fruitful co-existence of fitness, wellness and shopping in portfolio properties, he warned against directly integrating special fitness and wellness services into shopping centres and, above all, he warned against drawing conclusions about the potential customer structure and appeal of a fitness/wellness centre on the basis of the accessibility and number of visitors of a shopping mall. Leisure facilities attract customers from their direct local surroundings - nobody would accept more than 20 minutes to reach a sports or beauty facility, while shoppers easily accept up to two hours of travelling time. "It is often reasonable to build up a fitness/wellness facility at a second-best location of a shopping area," advises Schimmelfeder. He deems yields between 10 and 11% to be realistic.
In a panel discussion about a "successful city mix", it became clear that city planners often have extremely different ideas from developers and operators. While skilled operators (such as Sealife/Merlin) take over investments, risks and profits themselves, most projects can still only be realised with the support of the communities. However, these are keen on creating benefits for the people at acceptable costs without newly burdening municipal funds. But similar to the hotel industry, it could be felt that the participating parties prefer talking about the location and costs rather than concepts and target groups.
Some speakers addressed the meaning of strategic brand development for leisure properties, while others presented concrete projects. Here are some examples:
ZOOM Entertainment Centre, Gelsenkirchen : The former Ruhr zoo with the charm of the fifties has turned into a theme park with an edutainment character. On 300,000 square metres, visitors experience "a world trip on a single day" and can watch animals in natural vegetation areas divided among the "continents" of Alaska and soon Africa and Asia. There are neither cages nor artificial partitions separating visitors from animals. The Alaska section alone attracted more than one million visitors during the first year after the opening. The 85-million euro investment is mainly from outside financing, while the city of Gelsenkirchen granted a loan, and the federal state of North Rhine-Westphalia made a minor contribution. With each further major attraction, the entry fees will be raised from currently 12 to probably 20 euros when all "continents" are finished.
The Olympic Park Munich is to be converted into a new centre for sport, health and entertainment. After the Bundesliga clubs had moved to the new stadium and took 5.5 million euros of turnover that had been generated in this city park with them, the new concept wants to create a new "planet of sport". Apart from sport attractions and leisure experiences such as climbing caves, high-wire climbing facilities or five-a-side football (Soccer Five), the neighbouring Technical University of Munich with its prevention centre want to use the park intensely for motion studies, also in collaboration with Munich's hospital Klinikum Rechts der Isar as well as the Wissenschaftszentrum (Scientific Center) Weihenstephan. A so-called "Olympic Prevention Center" is to be created.
The new BMW World is also being created near the Olympic Park Munich. It is directly linked to the headquarters of the automotive group. Following the concepts of other car manufacturers, BMW is building its own futuristic sales and event centre providing enormous space including conference rooms and restaurants. The centre will be located in a gigantic double cone. At the same time, BMW also plans to build a hotel on its premises. The edutainment concept is still being worked on.
Legoland Guenzburg , located between Augsburg and Ulm, is to be converted into a business park with a leisure resort (Prinz-Eugen-Park). Investors are still needed. There will be no connection to Legoland. The leisure resort consists of a hotel with 200 to 250 rooms, 90 resort villas and a huge lake. The attractions will include an interactive science centre for kids (the brand will be "Kindercity"), a multiplex cinema, high/low-wire climbing facilities, a diving tower and ice skating facility.
The advantage of Heuer`s Dialog about urban leisure real estate was the possibility to meet new contacts and learn about new project ideas in a small circle. Project developers from the hotel industry were missing, despite the fact that many leisure facilities are created in connection with hotels. / map
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