The great and good of the retail, leisure and F&B sectors descended on the South of France last week to bask in the winter sunshine and talk about the industry’s recovery and prospects for 2025.
Regular attendees of MAPIC agreed that although the event attracted fewer delegates than usual – circa 4,400 according to the organiser, including 1,800 retail representatives (a 12% increase on last year) – it was much more focused and the people who did attend were there to discuss business rather than (just) quaff copious amounts of alcohol.
The majority of the big global agency groups took an exhibition stand and many of the big UK and European landlords and asset managers were represented in the Palais, although there were some noticeable absentees.
Generally speaking, the mood was buoyant. The UK agents and asset owners I spoke to reported strong leasing activity this year, with low void rates in prime centres and space letting pretty swiftly when it does come to market.
They said a lot of leasing activity in the UK was still being driven by retailers and leisure occupiers relocating and/or completing upsizing, downsizing or rightsizing deals, but added that a number of new operators had also been busy doing deals.
In terms of wider occupier trends, wellness operators – ranging from businesses offering spa treatments through to niche health operators that provide services such as fully body scanning – are increasingly on the lookout for space.
Athleisure brands also continue to go from strength to strength and agents and asset owners expect this trend to accelerate throughout 2025. Industry experts also highlighted established operators like JD Sports and Marks & Spencer as ones to watch, with the latter aggressively enhancing its estate.
At MAPIC, a host of retail and F&B brands outlined their expansion plans for the UK. New Balance, Dune, Fauchon, Guess Jeans, Lucid, Levent Borek, Fat Phill’s and Goiko are all actively looking for space in the country.
On the leisure front, the competitive socialising trend was tipped by many to continue next year as existing operators look to expand their presence and new concepts come to the market.
However, asset owners pointed out that to truly add value to schemes, particularly in shopping centre locations, competitive socialising brands need to drive footfall throughout the day and not just in the evening to ensure other tenants benefit.
One leisure activity that a number of asset owners tipped for strong growth in the coming years is climbing, with interest fuelled by its inclusion in the Olympic Games, a move that has inspired lots of younger people to get into the sport.
On the flipside, F&B experts believe the UK “chicken craze” is officially over. They predict stronger growth for operators like Wendy’s, which is looking to expand its UK restaurant portfolio.
They also foresee painful churn in the pizza restaurant sector and warn that some long-standing operators will struggle to compete with newer fast casual players.
Drive-thrus are another area where agents and asset owners envisage strong growth, especially those tied to retail parks, which have become the star performer in the retail property sector.
Some experts questioned what impact the continued growth of retail parks might have on the logistics sector, as more retailers use their retail park units as click & collect fulfilment hubs.
Although most were overwhelmingly positive about the prospects for the retail, leisure and F&B sectors in 2025, they had a number of caveats.
It’s too early to say what the full impact of the Labour government’s first Budget will be, but there was unanimous agreement that the double whammy of National Insurance hikes and a rise in the minimum wage would have a significant adverse impact on some operators. Question marks also surround what is going to happen with business rates, with many experts waiting for more details on Labour’s promised reform of the existing regime to emerge.
While prime assets in good locations have performed well over the past 12 months, secondary and tertiary assets will continue to struggle in 2025 and we could see more of these schemes repurposed for other uses or bulldozed.
Many experts anticipate modest rental growth next year and they expect more assets to change hands. However, serious question marks surround the future of larger, carbon intensive shopping centres as investment decisions are increasingly influenced by ESG factors.
MAPIC is not MIPIM. It was relatively easy to find a seat at Caffé Roma. And some of the delegates I spoke to said the event needs to evolve if it is to remain relevant. But towards the end of the event, many attendees were already discussing their plans for next year, perhaps buoyed by the long overdue resurgence of the retail and leisure sector. Long may it continue.
Building climate resilience into office conversions