The commercial property sector has faced a number of significant challenges over the last few years, fuelled by repercussions from the COVID-19 pandemic and the resulting impact of shifting work habits.
Rising interest rates and inflation have also made financing more expensive, forcing Landlords and businesses alike to be agile and reassess their portfolios.
In turn, recent reports from Colliers reveal investors are now moving beyond traditional prime assets and are embracing value-add opportunities and flexible spaces, meaning commercial property returns are expected to reach double digits in 2025.
One such opportunity landlords and investors should be open to is the rise in popularity of escape rooms.
The rise of competitive socialising
The competitive socialising sector has accelerated in popularity in recent years as growing numbers of consumers look for something beyond the traditional retail, leisure and dining experience, with escape rooms leading the charge.
In fact, the sector grew at an unparalleled rate between 2018 and 2023 with a 38 per cent increase in venues during this time period, and represents one of the biggest developments the leisure sector has seen in decades.
This shift is largely driven by demand for in-person and community experiences post-pandemic, and there is still growing interest as consumers look to move away from digital-first activities.
The changing face of retail and work
Traditional retail spaces are evolving in line with these changing consumer habits, and we are seeing more landlords incorporate immersive and leisure elements into their properties.
Escape rooms offer a resilient alternative to traditional retail spaces that are continuing to face difficulties, and there are opportunities within retail parks, shopping centres and on high streets to develop these venues.
Not only is the retail landscape changing, but demand for office space is also declining as more people continue to work from home or on a hybrid basis. This means there are more vacant spaces in prime locations that can be repurposed for leisure purposes, tapping into these changing habits and behaviours.
Financial opportunities
Aside from shifting consumer trends, escape rooms also come hand in hand with a host of financial benefits.
Not only will escape room operators choose unconventional spaces that other commercial tenants may avoid – such as those with limited lighting and/or awkward layouts – they are also more likely to sign long term leases due to the investment required for the fit out. This minimalizes potential void periods while driving increased stability for commercial landlords in the current volatile market.
Furthermore, as the escape room market continues to grow at pace – with corporate team-building, birthdays, and tourism fuelling demand – brands will be looking to secure multiple sites, providing the opportunity for Landlords to build long term tenant relationships, underpinned by the joint objective of business growth.
Final thoughts
Ultimately, taking advantage of shifts in the market while responding effectively to evolving consumer habits and the wider economy enables commercial property landlords and businesses to explore new opportunities and remain agile, particularly during periods of economic difficulty.
While it’s true that unexpected turns can always be around the corner, escape rooms offer many exciting benefits for the commercial property sector, and this is something that landlords and investors alike should take seriously.
Written by Ellie McClaren, Co-Founder and CEO of The Escapologist