Jonathan Doughty is a global thought leader, consultant, speaker, moderator and C-suite executive in the foodservice and leisure sectors working around the world in retail, transit and leisure. In this issue, he gives us his view on the challenges, payoffs and the rise of location-based entertainment in the industry.
As IAAPA Expo Europe ends in Barcelona this October, a wave of new leisure concepts is looking to plug into shopping centres. From immersive game arenas and e-karting to indoor mini-golf, social darts and family edutainment, the thesis is simple: retail alone is no longer enough. Yet turning a shopping place into a true mixed-use destination isn’t as easy as dropping an attraction into vacant space. The legacy real estate constraints, new operating models and careful curation all need navigation to get the value equation right.
The Challenges
1 – Re-using redundant space (former department stores).
Redundant anchors are a gift and a headache. Their footprints – often 5,000-20,000sq m over multiple levels – seem ideal for leisure, but the bones don’t always fit. Deep floorplates can lack natural light and have low ceiling heights, columns at tight intervals and limited slab loading. Escalators may land in the wrong place for a modern arrival sequence and goods lifts aren’t sized for today’s ride systems or bowling equipment. Converting typically requires structural interventions (selective slab removal for double-height volumes, new penetrations for mezzanines, enhanced ventilation, acoustic isolation) and fresh egress strategies to meet assembly-use codes. The capex can be huge.
2 – Size and configuration of existing units.
Leisure thrives on “programmed volume”: clear heights for viewing, uninterrupted spans for lanes and arenas and flexible back-of-house for ops, tech and F&B. Traditional mall units – long and narrow with cellular back rooms – create inefficiencies that eat capacity and drive up cost per square metre. Corridors, columns and service risers can fragment layouts, forcing compromises. Smart schemes bundle adjacent units, swallow back-of-house corridors where possible and plan for “black box” volumes with acoustic separation. Where ceiling height is limited, operators favour lower-impact experiences (escape rooms, arcade lounges, VR pods).
3 – Rent differentials and underwriting.
Leisure economics differ from retail. Turnover can be strong but comes with higher fit-out costs, longer ramp-up and more operational complexity. Leisure rents don’t cut it if benchmarked to fashion or specialty retail. Deals increasingly blend lower base rent with turnover top-ups, enhanced fit-out contributions and phased rent schedules. Owners should underwrite not only direct rent but also indirect value. Data is king here to help both sides align around performance.
4 – Putting leisure in the right place – placemaking, not plugging.
The single biggest mistake is tucking leisure into leftover corners. Attractions are generators; they deserve gateway visibility, intuitive wayfinding and adjacency to complementary uses (cinema, casual dining streets, family amenities). The ideal location does three things: anchors an under-performing area, stitches together parts of a centre, or creates a “new address”. Vertical circulation is critical – dedicated lifts and escalators, welcoming thresholds and sightlines that “tease the fun”. Sound and vibration management matter too; you want energy, not bleed into premium retail. “It will do WON’T DO!”
The Payoffs: Three Key Benefits
1 – Extending the daypart.
Retail peaks midday and weekends; leisure stretches the curve into evenings and off-peak weekdays. Late-running mini-golf, bowling, e-sports lounges and themed bars keep lights on after 6pm, supporting staffing efficiencies and creating a reliable night economy. Parents can pair kids’ activities with dinner; young adults meet for competitive socialising and community events fill shoulder periods. Longer trading hours compound other turnovers.
2 – Driving traffic to specific locations.
Leisure is a precision tool for traffic engineering. Positioning an attraction at the head of a weak mall arm can reverse footfall patterns, while a vertically stacked leisure hub can catalyse an upper level that previously struggled. Wayfinding that guides guests past curated tenant mixes – athleisure, streetwear, gadgets, confectionery – converts footfall into sales. This is science baby, but new to many of the developers and owners out there.
3 – The “halo effect” on other uses.
Large volumes of leisure guests lift a lot of other uses. Restaurants benefit first – pre- and post-play or performance meals, celebratory gatherings, kids’ party packages and spontaneous snacks. Cinemas, if present, cross-promote with combo deals. Experiential retail (custom sneakers, build-your-own toys, maker studios) feeds off the same mindset. Even services – salons, clinics, co-working – see uplift as the destination becomes a true “third place”. Owners that track basket composition often find leisure guests spend across categories, not just at the attraction itself.
For shopping places, Leisure is the connective tissue between retail and hospitality. The winning playbook treats leisure as a curated district with its own brand, programming calendar and digital layer – bookings, memberships, leagues, influencer nights – rather than a single tenant. Pair every attraction with embedded F&B, photogenic moments and seasonal events. Measure what matters: dwell time, repeat visitation, cross-shop indices and uplift in surrounding rents.
Bottom line: integrating leisure into existing shopping centres isn’t a plug-and-play exercise. It requires surgical real estate work, new deal structures and strategic placement.
