Gyms struggle to find space to stretch
The growth of 24-hour gyms in NSW is being hampered by a lack of suitable space as franchisers look to expand their businesses, according to a new report by CBRE.
Operators are seeking spaces of between 300 square metres and 500 square metres in retail strips and bulky goods centres in close proximity to larger traditional gyms.
Recently US-based Anytime Fitness opened its 100th franchise in Thornton, NSW, choosing a site in the local Supa Centre. About two-thirds of its franchises are located in NSW.
Anytime Fitness was recently named top franchisor in the 2011 SmartCompany Smart50 Awards, which recognised fastest-growing small to medium-sized enterprises in 2010-11.
Jacinta McDonell Jimenez, who founded the business alongside her brother Justin McDonell, told SmartCompany that site selection is a challenge.
“Site selection is really where we get stuck just because of our parking requirements and the size of our tenancies sometimes makes it a little bit tricky, especially when you’re getting into tight metropolitan areas. Sometimes council requirements can be challenging as well,” she says.
CBRE senior negotiator Shane Cook recently negotiated three long-term leases with Anytime Fitness, with franchisees committing to 349 square metres at the House and Home centre at Nowra on the NSW South Coast, 510 square metres at the Lake Haven Mega Centre on the Central Coast and 368 square metres at the Blacktown Mega Centre in Sydney’s west.
“The 24/7 gym operators target exercise-conscious professionals looking to work out close to home but also reduce non-essential spending,” Cook says.
“These fitness clubs have smaller space requirements, typically between 300 square metres and 500 square metres, which, coupled with limited staff costs, results in lower overheads.”
Another 24-hour operator, Jetts Fitness has 145 franchises with 19 in NSW. Fifty-nine franchises are in Queensland.
According to Cook, the trend towards smaller, low-cost gyms has left larger traditional fitness clubs scrambling to compete through the introduction of different services and the expansion of their facilities.
Gym group Fitness First has also been expanding signing a 10-year lease over 2,281 square metres of space on the ground, first, second and third floors of MBF building on 116 Adelaide Street, in the Brisbane CBD.
Since expanding into Australia in 2000, Fitness First has established more than 90 clubs across the country, with Adelaide Street lease representing its third gymnasium in the Brisbane CBD.
The new health club is due to open next month.
Global health club chain Virgin Active has also been in expansion mode since opening its first Australian club in late 2008. It has one club in Melbourne and three in Sydney.