Feel Good Edition 3

Landlords who believe that adding leisure to an existing asset will assure a good return still face the prospect of determining how to achieve the best return possible. The complexities of the leisure market, driven by ever-changing consumer tastes, mean that there will never be a single solution. However, by asking a series of interrelated questions, it is very likely that useful answers will emerge. Key themes include: OPTIMISING RETURN ON INVESTMENT – ASKING THE RIGHT QUESTIONS 04 | THE FEEL GOOD TRILOGY | EDITION #3 MAKING FEEL GOOD PAY Understanding the underlying forces driving trends in the leisure sector (see Edition #1) is crucial to investing in those leisure concepts that are most appropriate for a given location at a particular time. Identifying concepts that have longevity and/or the ability to adapt and evolve (i.e. based on human impulses to interact socially outside the home) and developing physical spaces accordingly will significantly help to achieve optimum returns. Traditional theories about covenant strength don’t always apply to leisure operations. A ‘cool’ operator, even with limited track record, may provide a better pay-o than a conventional tenant, who may be less able to capture visitor time e ectively (see above). RETHINKING COVENANT STRENGTH INVESTING WISELY