Concerns over occupier credit following the pandemic, combined with the trading difficulties experienced by UK cinemas, have notably suppressed investor interest in multi-let leisure schemes in recent years. However, transactional evidence over the past 12 months indicates that the market may have lifted off the nadir, pointing towards a more positive outlook for the leisure investment sector.

There is no doubt that the past five years have presented an exceptionally difficult trading environment for UK leisure investment, with volumes falling further below already depressed levels of transaction activity during this period (volumes exclude pubs and hotels). Leisure deals have in fact been falling year on year since 2016, each below the long-term average of c.£500m per annum.

The sector inevitably hit an all-time low in 2020 with the onset of Covid, surpassing even the downturn experienced during the global financial crisis of 2008–09. Recovery in the post-pandemic period has been notably sluggish. Since 2020, volumes have struggled to return to pre-Covid levels, which themselves were already below the average of the last two decades.

In 2023, UK leisure investment volumes reached just £127.9 million – the lowest figure recorded since the turn of the millennium, excluding the two major economic shocks mentioned above. This represented a 63% decline in transactions compared with 2019 and a 46% drop year-on-year.

Encouragingly, 2024 seems to have marked a pivotal shift, representing the first year since 2014 in which investment volumes increased compared with the preceding 12-month period. Investment volumes rose to £200 million, reflecting a 56% increase on 2023. This improvement reflects growing market optimism and a widening pool of active buyers, albeit still dominated by high-net-worth, family trust and opportunistic investors rather than institutional capital. Momentum continued into 2025, with £283 million transacted by year-end, representing a second consecutive annual increase and a further 41.5% uplift in volumes.

Plenty of appetite for expansion, but occupational covenant strength is not as strong as in other sectors, a factor which has tempered investor demand in recent years

If we compare the multi-let leisure sector with retail warehousing for a moment, Savills suggests the latter presents a more attractive risk-return profile. This is largely due to the robust occupational fundamentals and financial resilience of its core tenants, which offer greater stability and confidence to investors relative to other sectors.

Assessing the INCANS Tenant Global Score – a measure of the financial strength and stability of a retailer based on its public accounts – shows that the financial stability of the out-of-town market’s top operators is solid. Of the top 50 retail operators by number of units across retail, leisure and shopping parks combined (excluding F&B and gyms), 37 are considered ‘low risk’ or ‘very low risk’ in terms of financial failure.

In contrast, leisure schemes often host more immature or financially vulnerable businesses, particularly among emerging F&B, competitive socialising, and immersive experience operators. Despite this, many leisure subsectors have shown strong post-pandemic recovery, outperforming expectations even amid cost-of-living pressures.

Nevertheless, performance varies significantly by operator and concept, making investor confidence uneven. The sector is buoyed by tenant appetite for new space, though economic headwinds continue to impact operators differently depending on their subsector. Appetite is encouraging, but covenant strength remains a concern, particularly among newer concepts.

Is cinema anchor disruption still negatively impacting the investment market?

The most significant drag on investor sentiment post-pandemic has undoubtedly been the trading performance of UK cinemas. In 2023, both Cineworld and Empire Cinemas filed for administration in the UK, while Vue underwent a debt-for-equity restructuring.

Cineworld exited at least eleven sites nationwide, including Glasgow, Bedford, Loughborough and Swindon. While a few sites – such as Swindon Regent Circus – have been relet, most remain vacant, posing challenges for landlords reliant on cinema anchors to drive footfall.

Empire Cinemas closed six sites immediately upon entering administration, including Bishop’s Stortford, Catterick Garrison, Sunderland, Swindon, Walthamstow and Wigan. However, the impact was partially offset by Omniplex Cinema Group’s acquisition of five Empire locations – Birmingham, Ipswich, Sutton, Clydebank and High Wycombe – as part of a £22.5 million investment. These sites were refurbished and rebranded, preserving around 150 jobs.

Everyman Group also acquired two Tivoli-branded Empire sites in Bath and Cheltenham, reflecting the ambitions of challenger cinema brands to grow their presence in the boutique segment. These operators are actively seeking well-located, characterful venues that align with evolving consumer preferences for premium, experience-led formats.

These closures have, however, exposed the vulnerability of leisure schemes dependent on single-use anchors. Reletting large-format cinema units is complex and capital-intensive, often requiring reconfiguration or repositioning. As a result, recent transactions reflect a repricing of risk, with investors demanding higher yields to compensate for income uncertainty and void periods.

Despite the notable closures, Cineworld UK has implemented a restructuring programme to improve its prospects moving forward. The operator avoided administration through a court-approved Part 26A restructuring plan in September 2024. The plan allowed the company to compromise lease liabilities, reduce rents across its estate and secure £16 million in equity funding, with a further £35 million earmarked for capital expenditure. Positively, the restructuring preserved 101 UK sites and approximately 4,000 jobs, repositioning the business on a more sustainable footing.

This restructuring has, however, set a precedent for leisure operators seeking to reset lease terms through legal mechanisms, raising concerns among landlords about enforceability and income stability. Despite this, it has also made Cineworld a more investable covenant. Recent multi-let transactions involving Cineworld anchors – after a three-year absence – suggest renewed confidence in the operator’s viability and long-term presence.

Key transactions in 2025

Four notable multi-let leisure transactions in 2025 underscore the sector’s renewed traction and growing purchaser appetite:

• Medway Valley Leisure Park, Rochester (215,000 sq ft): Sold by M&G to Prestbury for £26 million, achieving a net initial yield of 9.45%. Anchored by Cineworld, the scheme includes a Premier Inn hotel, bingo hall, gym, bowling alley and multiple F&B units.

• Freemans Leisure Park, Leicester (109,000 sq ft): Sold by DTZ Investors to AEW for £11.2 million at a net initial yield of 10.60%. Tenants include Odeon, Nando’s and Mecca Bingo.

• Robin Leisure Park, Wigan (98,000 sq ft): Sold by Otium to a private investor for £8.3 million, reflecting a net initial yield of 8.50%. The scheme features an Omniplex cinema, bingo hall and F&B units.

• Southwater Square, Telford (101,000 sq ft): Sold by M&G to LCP off market for an undisclosed price. The asset includes a Cineworld, hotel and several restaurants.

Each of the first three transactions achieved pricing in excess of quoting terms, signalling a clear shift in sentiment compared with this time last year, when optimism was largely speculative and lacked transactional evidence.

These deals reflect a tangible improvement in investor confidence towards leisure parks and a softening of concerns around cinema anchor tenants. However, pricing continues to vary significantly, influenced by factors such as geographic location, the financial strength of tenants, the physical condition of the asset and overall lot size.

Prime yields for multi-let leisure schemes are now showing signs of hardening following a prolonged period of flatlining, creating opportunities for investors to maximise returns with the correct entry and exit strategy.

Savills prime yields across multi-let leisure schemes have remained steady at 8% since Q1 2024. However, emerging indicators point to early yield compression, suggesting the market may have reached its cyclical low and that asset pricing is poised for upward movement – reflecting renewed investor confidence and the potential for capital growth.

At current pricing, multi-let leisure appears favourable when compared with the high watermark of 2016/17, when it reached its lowest point in the last 15 years at 5%.

Looking at the yield trajectory over that period, the market started at 9% in early 2009, fell to 5% by mid-2016 and has since risen to its current level of 8%. This cycle suggests leisure yields are arguably more attractive in terms of their longer-term relative performance and the ability to capitalise on value accretion over time.

The current inflection point could motivate investors to act while pricing remains close to the nadir but poised to compress – signalling growing confidence in the sector and the potential to capture capital growth and exit at a higher sales price.

The 300-basis-point margin from peak to trough over the cycle highlights the sector’s volatility – but also its opportunity. Value-add and opportunistic investors are increasingly drawn to leisure assets, recognising the potential to time entry and exit for enhanced returns.

Furthermore, while securing finance for leisure scheme acquisitions continues to pose challenges, conditions have notably improved compared with 12 months ago. Lending appetite remains cautious, particularly for assets with cinema anchors or secondary tenant profiles, but there is evidence of greater flexibility among lenders.

Although debt is still priced higher than for prime retail assets, all-in borrowing costs have eased slightly due to falling base rates and tightening margins. This shift has made acquisitions more viable for buyers prepared to take on elevated risk in pursuit of enhanced returns, particularly in value-add or opportunistic strategies where pricing remains attractive.

Looking ahead, the UK leisure investment market is poised for further recovery. Stabilising cinema performance, rebased rents and improving occupier fundamentals across leisure subsectors are creating a more investable landscape. While caution remains around credit risk and emerging concepts, pricing dynamics and yield trends suggest growing opportunity for value-add strategies and long-term capital growth.

_{Read the articles within Spotlight: UK Leisure Market 2026 below.}