Leisure | Business Outlook 2020

A healthy level of investor interest in the ‘alternatives’ property sector continued throughout 2019.

With well invested and well-located businesses remaining the most sought-after assets. It was a year of major M&A activity, as well as a number of opportunistic acquisitions of distressed portfolios. 

Notable transactions included the sale of Merlin Entertainments to Blackstone, Canadian pension firm, CPPIB and Kirkbi, a company operated by the Danish family who control Lego, with an enterprise value of £5.9 billion.
This transaction saw Merlin return to private ownership. 

Similar deals across the sector suggest a strong appetite continues amongst PE investors for the alternatives space and this looks set to continue in 2020, with a number of exciting deals due to complete in the first half of the year. 

Despite many leisure operators trading comparatively well, we have started to see an increase in operational costs including wages, utilities and the cost of goods impacting profitability. This may influence owners’ capital expenditure plans in 2020 however, where possible we consider that continued investment is essential to maintaining competitive advantage and value.

Similar deals across the sector suggest a strong appetite continues amongst pe investors for the alternatives space and this looks set to continue in 2020.

With regard to Brexit, deals involving European investors continue to be delayed by the ongoing uncertainty surrounding negotiations, albeit the outcome of the General Election in December and the reaction of financial markets suggests we may see an improvement in this regard.


The health and fitness market enjoyed a continued period of growth in 2019, exceeding a market value of £5 billion for the first time. Investor interest remains strong for corporate quality deals, whether by M&A activity or new build organic growth. In December 2019 came the announcement that leading low cost gym operator, Pure Gym is set to acquire Fitness World to create a 500-club business. During the year Christie & Co acquired Cookridge Hall Health & Fitness on behalf of Bannatyne Fitness in an off-market transaction. The team has also been mandated by David Lloyd Leisure to help grow its portfolio in Germany.

Developers of leisure and hospitality real estate faced a number of challenges during the year as construction inflation continued to drive up the cost of delivering leisure and hospitality schemes. There is now often a considerable gap between the cost of procuring a new property, versus what existing businesses may be acquired for in the market. 


  • Business Rates
  • Increasing utility costs
  • Increasing staff costs
  • Employment and challenges attracting new talent into the industry
  • Capex and refreshing of portfolios
  • Portfolio churn
  • Construction inflation


Uncertainty around Brexit may continue to influence a reduction in investor confidence until a decision has been finalised. As a result, we may see a decrease in European investment into the UK, however there is still significant interest from other regions including China and the US.

Increase in distress disposals and CVA’s (this will drive increasing uncertainties for landlords exposed to rental income) for under invested and/or poorly managed businesses.

Holiday parks will continue to be highly sought after, however a number of administrations in 2019, including the collapse of Dream Lodge Group in August, suggest their attractiveness as a second home could come under pressure as lenders tighten their borrowing criteria.

Quality health & fitness businesses will be in high demand given the small number of opportunities that typically come to market.

Jon Patrick
Head of Leisure & Development
T: +44 7831 263 529
E: jon.patrick@christie.com



Freehold 38,000 sq. ft property acquired on behalf of Bannatyne Fitness in an off-market transaction.


Confidential sale of two boutique hostels in Liverpool and Newcastle, trading under the Euro Hostels brand, to the Youth Hostel Association.


Instructed in Q4 to acquire multiple sites in key city centres throughout England, Scotland and Wales for
their live music and entertainment concept.