A cinema operator takes a large, awkwardly configured unit that has sat empty for years, at a rent below what the retailer it replaced once paid. The landlord hopes the units either side will trade better, the car park will be busier on weekday evenings, and a restaurant struggling to justify its rent will benefit from pre- and post-screening trade. The cinema itself may never be the destination’s best-performing tenant by rent per square foot. It may, nonetheless, prove to be the most valuable occupier on the entire scheme. Establishing whether that actually happens — rather than simply assuming it because the story is a satisfying one — is the real professional task facing anyone managing a retail destination’s tenant mix today.
Footfall is a means, not an end
The retail-property industry has spent the better part of a decade absorbing the idea that food, leisure and experience-led uses drive footfall, and that footfall is good for a destination. Both halves of that statement are broadly true and neither is, by itself, the point. Footfall matters to a landlord insofar as it becomes something the property can monetise: income from the occupier itself, stronger rent collection from neighbouring businesses, new lettings or renewals achieved on better terms, shorter void periods, or an improvement in the resilience of the asset’s income. A leisure occupier can draw crowds and still prove a poor use of capital if those visitors spend only inside its premises, arrive after neighbouring shops have closed, or generate sales that never find their way into the owner’s cash flow. Equally, an anchor may be valuable for preventing the decline of income elsewhere without producing a spectacular immediate uplift in rent. The distinction is between protecting the income already in place and creating genuinely additional income, not simply between a busy scheme and an empty one.
That distinction becomes particularly awkward in a multi-let destination because the benefits do not arrive in the landlord’s accounts at the same time as the costs. A restaurant whose takings improve may become a more reliable payer of its existing fixed rent without paying a pound more; another unit might command a stronger rent only when it is next available to let, and a favourable renewal or rent review is not automatic merely because sales have risen. Some of the benefits may fall to businesses or property owners outside the landlord’s own estate. The conversion expenditure, meanwhile, may have been incurred before the leisure operator opens. An asset manager presenting improved tenant turnover as an immediate increase in property income has skipped the most important link in the argument: how, when and by whom the improvement can be captured.
The trade a landlord is making
Bringing in a leisure or food-and-beverage occupier of real scale is rarely a neutral decision, and the trade involved deserves to be stated plainly rather than glossed over in enthusiasm for diversifying tenant mix. A cinema, food hall or indoor entertainment concept may be prepared to take a large unit with poor conventional retail prospects, but only at a lower rent than its former department-store occupant paid before that market weakened. Some food and leisure operators can be strong rental bidders, so the comparison should not be presented as a rule that leisure always pays less than shops. The correct alternative is the most credible letting, subdivision or continued vacancy available today, not the historic peak rent of an occupier that has already failed or left. The owner also needs to identify which party pays for alterations to structure, power, ventilation, drainage, fire precautions and common areas, what programme and permissions the change requires, and what happens to the works if the operator leaves. In England, a cinema is not automatically permitted simply because a unit was previously authorised for retail: government guidance on changes of use identifies cinemas among uses requiring separate planning consideration. Extending trading into the evening may increase security, cleaning and other estate costs without making them fully recoverable through existing service-charge arrangements.
The hoped-for return lies partly outside the new tenant’s own rent: trips that would not otherwise have happened, customers who also use nearby shops and restaurants, improved attractiveness to replacement tenants, reduced vacancy and stronger rental prospects across the destination. CBRE’s midyear 2026 retail outlook identifies dining out as a leading non-retail leisure activity influencing destination choice and continued interest in broader tenant mixes, but also describes a polarised market. Savills’ Q2 2026 shopping-centre assessment found leasing fundamentals improving even as average shopping-centre footfall declined year on year, while vacancy and rental performance varied by location. That is a useful warning against making visitor numbers either the sole justification for an investment or the sole verdict on its success. A leisure proposal still has to beat the realistic financial alternative for the particular building and estate.
The source of the extra spending matters too. A food hall can draw visitors away from established restaurants on the same scheme, and an attraction may bring customers who arrive for one activity and leave without visiting another unit. Even when neighbouring businesses prosper, the estate may capture less of the value than the wider high street if customers spend outside the landlord’s ownership. Parking income, advertising receipts and turnover-linked rent may offer more direct ways to capture spending, but only where the owner actually controls those revenues and the relevant contracts permit them. For an investor, the danger is to add up projected extra footfall, higher tenant sales, better rent collection and future capital value as though they were independent financial benefits, when several can arise from the same underlying spending and income.
The modern anchor is a genuinely different animal from the old one
The concept of an anchor occupier — a large, footfall-generating tenant around which a retail destination is substantially positioned — has not disappeared, but the occupier performing that function need no longer be a department store or supermarket. A cinema, large-format gym, food hall or competitive-socialising business can give visitors a reason to make the trip and create opportunities for adjoining occupiers. That is not an automatic improvement on the former anchor model. A familiar department-store name was no guarantee of solvency, as the empty buildings left after retail failures demonstrated, but some emerging leisure formats have shorter trading histories, more specialised fit-outs and greater exposure to changes in discretionary spending. A destination with several restaurants and entertainment operators can look diversified by use while remaining highly exposed to the same pressures on household leisure budgets.
Liverpool ONE is a valuable real-world test, partly because the evidence reveals both the opportunity and the limits of what can be claimed. In August 2023, M&S and Gravity MAX opened in the former Debenhams accommodation. Grosvenor’s announcement described Gravity’s £10 million investment in a 100,000 sq ft entertainment venue; that was presented as the operator’s investment, not evidence of a £10 million contribution from the landlord. Subsequent reporting of Grosvenor and CACI’s analysis recorded restaurant-terrace sales up 9.6%, with 43% of Gravity customers also shopping elsewhere within Liverpool ONE. Grosvenor reported a 7.9% favourable swing in footfall performance against the UK benchmark following the two openings. Those findings give substance to the argument that a large leisure use can support cross-shopping and the wider offer. They do not isolate Gravity’s effect from the simultaneous M&S opening, establish how much of the terrace’s additional sales was genuinely new to the destination, or demonstrate that either occupier produced enough additional rent to recover the owner’s expenditure.
The distinction becomes sharper when the property’s eventual investment value is considered. Savills’ March 2026 examination of multi-let leisure investment describes renewed buyer interest after years in which cinema covenant concerns and trading difficulties weighed on transactions; it also shows how the pricing of leisure schemes depends on covenant, asset condition and the strength of their operating locations. Those leisure parks are not identical to an enclosed shopping centre or mixed-use city destination, and their investment yields should not be applied as a benchmark to Liverpool ONE. Their relevance is more basic: a successful attraction, a dependable rent payer and an asset that future investors will price favourably are not necessarily the same thing. An anchor can be operationally influential and still create a concentration of income or refurbishment risk that a purchaser discounts.
The questions a rigorous evaluation needs to ask
A landlord or asset manager assessing whether a leisure or F&B occupier earns the trade described above has to test the claim rather than accept the general industry narrative on faith. Does the attraction produce visits that would not otherwise have occurred, or simply change when existing customers come? How many visitors move into the other premises, what do they spend there, and would that spending have taken place with another operator in the vacant unit? Does the new use bring an evening audience when surrounding shops are open, or does it mostly support businesses outside the owner’s control? Have rents increased on actual lettings, have incentives fallen, or has occupancy improved compared with an appropriately chosen benchmark? The professional value of the exercise lies less in assembling another impressive footfall chart than in distinguishing an improvement that will reach the property’s accounts from one that remains with the occupier or the surrounding town.
The available tools can help, but they do not answer every causal question. Where access, confidentiality and data-protection arrangements permit, anonymised spending and movement data can identify linked trips, the distribution of spend, catchment changes and how customers behave before and after an opening. CACI’s Shopper Dimensions research offering describes cross-shopping, trip values and comparisons with other retail destinations. Comparison periods and similar schemes can reduce the risk of attributing a general market improvement, a new M&S, a seasonal event or better weather to the leisure anchor alone. The Liverpool ONE evidence is stronger than an unsupported claim that visitors linger longer, but it remains owner-commissioned analysis, not an independently published causal assessment of the property’s net rental return. It is reasonable to value credible evidence of wider benefits; it is not reasonable to convert all of those benefits into assumed additional rent without another step of analysis.
The final comparison has to be made over the period for which the landlord is putting money at risk. Against the leisure rent and any genuinely additional income elsewhere sit incentives, non-recoverable management costs, common-area works, the cost of conversion, possible future reinstatement and the period for which the occupier is securely committed. A scheme that improves trading but requires further expensive alterations when the operator leaves might produce a weaker result than an unglamorous letting with less apparent excitement and more dependable net income. Where the attraction safeguards existing tenants, that protection can be valuable even if headline rents do not rise; it should be recognised as lower risk to an existing income stream rather than booked again as an independent rental uplift. Any improvement in capital value must likewise be reconciled with the same future income and risks, rather than counted on top of them as an unrelated reward.
Protecting the destination against the anchor’s own fragility
Because a leisure anchor may require substantial investment before trading begins, the agreement needs to reflect more than the proposed rent and opening date. Depending on negotiating strength and the intended lease structure, a landlord may seek rent security, a suitably supported covenant, defined opening and trading obligations, and staged capital contributions linked to work completed or other achievable milestones. Turnover rent can connect income to actual sales, perhaps alongside a base rent, but introduces the risk of declining receipts and demands reliable turnover reporting. The Valuation Office Agency’s guidance on commercial rental evidence discusses turnover arrangements and covenants to trade in their leasing context. Such provisions require specific drafting and do not give the landlord a general power to compel a failing business to remain profitable, or an automatic right to take over its operation if it fails.
The risk is not simply that the anchor stops paying. The landlord can lose a visitor draw on which adjacent tenants have come to depend, inherit a bespoke interior that another occupier does not want, and face a fresh period of weak trade while a replacement is found. Contractual rights to terminate, recover possession or reclaim specified contributions may help, subject to their terms and enforceability, but they cannot create a ready replacement operator or eliminate the need for further capital. The most resilient strategy is therefore one in which the property remains adaptable enough for another credible use and the landlord’s expenditure can be justified without assuming the attraction will retain its popularity indefinitely. A powerful brand may generate value, but too much of the estate’s success resting on one operator can become a weakness when market conditions change.
Assessing the unit, not just the destination
None of these questions can be answered by examining the direct rent of one unit in isolation, which is the central discipline of tenant-mix decisions. A leisure occupier’s value has to be assessed at whole-destination level, while remaining precise about which benefits belong to the landlord and which are captured elsewhere. Hammerson’s first-half 2026 results reported footfall up 3%, like-for-like occupier sales up 2% and like-for-like net rental income up 5% across its reported portfolio. Those are three different measures and are not evidence that leisure tenants caused the improvements. They do, however, illustrate why a professional owner tracks more than visits: occupier turnover affects the ability to support rent, but actual rental income must still be earned under leases and after the property’s costs.
A landlord accepting lower direct rent and more upfront expenditure because a leisure occupier makes neighbouring units easier to let, preserves existing income or produces measurable additional receipts may be making a sound asset-management decision. Whether that decision creates value depends on the realistic alternative for the vacant space, the point at which wider benefits can enter the rent roll, the costs they require and how much of the result survives when the operator eventually changes. The strongest leisure anchor is not necessarily the one bringing the largest crowd. It is the one whose contribution to the destination can be demonstrated in income that endures, without leaving the owner dependent on an attraction whose replacement would consume the very value it was supposed to create.
This article provides general information and analysis about UK commercial property, retail destinations and leisure leasing. It is not legal, financial, valuation, planning, tax or investment advice. Rental outcomes, capital expenditure, lease rights and operating costs vary by location, asset and occupier. Property owners, investors and operators should obtain appropriate specialist advice before committing capital or entering commercial agreements.
