Leisure operator demand grows, with 15% more deals across Europe in 2024

Leisure operators saw a 15% increase in deal volume and leased 20% more space year-on-year in 2024, with a growing demand for larger units. Despite recording the fewest number of transactions among the 10 tracked retail categories, leisure accounted for the third-largest share of take-up by floorspace (9%), according to analysis of more than 2,000 leasing deals by Cushman & Wakefield. The sector has been particularly effective at repurposing former department store units, such as Capital Theatre, which signed a lease for the former Debenhams at Westfield London, W12, to convert it into a 620-seat auditorium. Overall, the number of retail transactions remained flat compared with 2023. Across most retail categories, units of less than 6,458 sq ft remained the most sought-after, accounting for 84% of all deals and around 40% of total leased floorspace. The main exception was leisure, where larger floorspace is needed to support experience-driven concepts such as climbing gyms, trampoline parks and virtual reality centres. Retail rents continued to climb in 2024, with strong growth recorded across all retail asset classes. In retail parks, prime headline rents hit new highs in many markets. Marked improvement On European high streets, rents also rose, driven by robust occupier demand. Of the 209 high streets monitored, 44% saw positive rental growth – a marked improvement on 30% in 2022 and 35% in 2023 – while 53% of locations saw stable rents. Luxury shopping streets remained the strongest performers due to low vacancy rates and sustained demand. Italy led rental growth, with notable gains also seen in Hungary and Poland. In the shopping centre market, rents rose in a third of the 107 European submarkets, with only two markets reporting declines – a significant improvement from 2023, when nearly 10% saw falling rents. While leisure experienced the most significant growth in activity, fashion remained the dominant retail category, accounting for 39% of floorspace leased and nearly a third of all transactions. Active brands included JD Sports, Sports Direct, and H&M and Inditex brands. The F&B sector was the second most active by transaction count. Deal volume rose by 3%, with floorspace leased staying level with 2023. F&B accounted for 17% of deals and 8% of total space leased, led by quick-service chains such as McDonald’s, KFC and Burger King. As retailers adapt to rising rents and ongoing economic challenges, including fragile consumer confidence, rising operational costs, and geopolitical uncertainty affecting sourcing and pricing, they are sharpening their real estate strategies to balance cost efficiency with revenue capture. Robert Travers, head of EMEA retail at Cushman & Wakefield, said: “Retailers have been focusing on turning their key stores into strategic destinations, with a strong emphasis on quality over quantity. We are also seeing a notable acceleration in cross-border activity as retailers look to new markets in which to grow and develop, but location strategies are now often city-led rather than at a country level.” Travers noted a shift in retailer expansion strategies, with brands now prioritising fewer, higher-quality stores in prime locations rather than broad coverage within a single country. This more selective, experience-focused approach is fuelling intense competition for top-tier retail space and driving rental growth in key markets. “The big unknown at this stage is what the longer-term ripple effects on demand will be from the introduction of tariffs. This won’t reveal itself as quickly as the turbulence on the stock market, nor is it likely to be uniform, but the recent developments add complexity and cost into retail supply chains. Our European Retail Radar will continue to track data allowing us to highlight any impact on retail leasing activity in Europe”, he said. Image © Mark Senior