F45 gyms: fuelling the fitness fire

Concealed underground on Cowcross Street in Farringdon, EC1, lies the flagship site of what could be the UK’s next go-to fitness offering. It’s called F45, and has recently hit UK shores from Australia. Once inside, the basement the layout is simple: mobile fitness equipment is laid out around the room and besides plasma screens with a CGI instructor demonstrating exercises (see below), the walls are bare. It’s not easy to find, but that’s part of its charm. This is the latest fitness craze aiming to take the UK by storm, and it plans on doing so by word of mouth. F45 has 507 outlets around the world, with six sites already up and running in London and a further eight in the pipeline. All this has been achieved in just three years and it has aggressive expansion plans for the UK. However, while healthy living is on the rise, so too are fitness fads; this is a highly competitive market. Its expansion will be spearheaded by global sales director Luke Armstrong, a former corporate banker. Currently based in Sydney, Armstrong will soon relocate to London to ensure the group’s UK expansion is as successful as its global counterparts amidst the competition. The requirements One advantage that F45 already has over its competitors is its flexible approach towards sites. It is open to unusual, tucked-away locations, which landlords may otherwise struggle to let. “Unlike a lot of conventional fitness offerings, we don’t rely on visibility or foot traffic to generate local community awareness, which is handy as it means we can use spaces like we have here in Farringdon,” explains Armstrong. The 2,000 sq ft basement site was previously being used as storage space for upstairs tenant Itsu. F45 managed to secure an off-market deal for the space through its property agent Savills. “It placed the original tenant into the space and knew that it was here but underutilised. The landlord was open to a sublet deal to accommodate us and within four months we had a brand spanking new facility,” Armstrong says. “As long as it is of sufficient size and fit for purpose we can make it work,” says Armstrong. “It’s a nice formula and allows us to keep a cap on our rental overheads as we don’t need to be in the flagship corner locations.” The simplistic feel of the space is an added bonus for landlords, as it requires minimal fixtures and fittings. The fitness programme does not rely on any fixed machinery. Members do classes in circuits and mobile equipment means it can adapt to any of F45’s 27 different training systems. “One of the things that characterises F45 is how little there is to it,” says Armstrong. “We don’t need chill-out areas or juice bars. It is very minimal, which allows it to be varied and adaptable to a whole multitude of spaces that a lot of commercial tenants would probably struggle to envisage inhabiting,” he adds. Armstrong is hesitant to put an exact figure on the company’s UK ambitions, but if its expansion to 353 sites in Australia within three years is anything to go by, coupled with its flexible approach to space and location, then amassing a large-scale UK portfolio is within reach. Armstrong says: “One thing that it is known for back home is that it came out of nowhere and dominated the market so quickly. The next step in global domination Including Australia, F45 exists in 16 countries around the world including the Philippines, Malaysia, India and Switzerland. The ethos of the business is that fitness is a worldwide phenomenon that is not confined to rich Western markets. With the time-poor millennial as its target market, the UK was the next logical step for global domination. “One of the reasons we are so excited about London is that there is such a high concentration of our target user,” says Armstrong. “The need for exercise is universal and it is not a phenomenon that is defined to affluent city centres.” He says, historically, the UK has been considered to be behind the times but there has been a rapid catch-up and it is now home to some of the biggest brands such as Fitness First and Virgin Active. “What we have seen back home is a real shake-up in the industry, where the big players have had their market share eroded by the discount chains. “This means at the top end they have lost their high-margin clients who are willing to pay and Virgin Active has divested a huge amount of its portfolio and Fitness First is doing the same all around the world, so we really saw an opportunity to come and establish ourselves very quickly.” Market stamina in the face of competition F45’s price point is higher than the average gym, but it cites personal trainers as its direct competitor rather than regular gyms. With prices at £20 a class or unlimited classes for £200 a month, F45’s offering is not at the budget end of the scale, but its success so far suggests customers are willing to pay. “Historically, health and fitness was regarded as the leisure pursuit of the few and you needed to have time or money to indulge in exercise,” says Armstrong. “But as we are living longer and learning the benefits of a healthy lifestyle, people are willing to pay more. “The F45 trainer can come and train as much as they like in a week for the same price as a personal trainer. We are not competing with the likes of PureGym.” But with a new exercise fad cropping up every time New Year resolutions are made or bikini body season comes around, establishing a model that will keep customers coming back is essential to success, something Armstrong and his team are only too aware of. “When we first started the brand we were very aware that fitness is a very fashionable, faddy space,” he says. “History is littered with these concepts that have been one-hit wonders.” “We wanted to be here for the long term, so there were cornerstones that we built the exercise regime around: member engagement, innovation and variety, training and results. “We are creatures of habit who crave variety, so when you walk into an F45 you know roughly what you are in for, but you don’t know exactly what you are in for. “We are betting on this being a permanent move into health and fitness and I think when you look at where the market is going, it is going to be all about high-intensity team training.” Requirements Location: close to residential, retail or transport hubs Size: Minimum training area of 1,650 sq ft plus facilities. Total of 2,500-3,000 sq ft Layout: Open-plan, single level, minimum ceiling height 3m, shower and toilet facilities Lease terms: 10 years with option for break clause and reviews Rental levels: up to £30 per sq ft Planning: D2 leisure or change of use to D2 leisure. Permission to trade seven days a week Property types: Warehouse, showroom, new developments, retail, office or mixed-use schemes Agent: Savills To send feedback, e-mail amber.rolt@egi.co.uk or tweet @AmberRoltEG or @estatesgazette