Leisure parks: recovery finally taking shape?

Between December 2019 and October 2026, the leisure park market has navigated three distinct phases: the Covid repricing, the sharp interest rate correction of 2022-23 and, more recently, a period of stabilisation which is beginning to show increasingly encouraging signs of recovery.

Based on the yield evidence, prime leisure park equivalent yields have moved from a cyclical low of 5.25% in December 2019 to 8.00% in October 2026, representing outward movement of 275 basis points over the period. Good secondary leisure park equivalent yields are currently at a stabilised level of 9.50% and most often transact at a double-digit net initial yield, providing investors with an attractive day-one return and running yield profile.

While today’s pricing may appear challenging, particularly when viewed against the pre-Covid market, it is not entirely unprecedented. Looking as far back as the Global Financial Crisis (GFC), prime leisure park equivalent yields moved from 5.50% at the end of 2007 to a high of 8.75% by May 2009, before recovering and stabilising back to 6.75% in June 2010.

The important difference this time has been the length of the recovery.

Following the GFC, investor confidence returned relatively swiftly, supported by a stronger leisure occupational market. Cinemas, in particular, did not face the same combination of challenges they have endured since Covid. Prime leisure park equivalent yields began softening from April 2020 onwards and have remained at 8.00% since late December 2023, illustrating just how prolonged the current period of market adjustment and caution has been.

Why has recovery taken so long?

A significant factor has been the well-documented challenges facing the cinema sector. Multiplex operators often account for between 40% and 50% of the capital value within a typical leisure park, meaning investor sentiment towards cinemas has had a significant influence on pricing.

The disruption caused by changing consumer habits, the writers' and actors' strikes in Hollywood and a reduced film release schedule collectively dampened occupational confidence and, by extension, investor appetite.

There are, however, increasingly positive signs.

We are beginning to witness more investment transactions as the cinema sector enters a more stable period, with improving box office performance supported by a much stronger release schedule. Major titles such as The Odyssey and Spider-Man: Brand New Day have demonstrated the enduring appeal of the big-screen experience and helped rebuild confidence in the sector this year.

Perhaps equally significant from a property perspective has been the willingness of the major multiplex operators to work proactively with landlords, investing substantial capital into refurbishments and reaffirming their long-term commitment to established leisure destinations.

Is investment sentiment starting to follow?

As operational performance continues to gradually improve, there are signs that investment sentiment is beginning to follow suit. Transactional activity strengthened during Q3 2026, while a broader range of investors are once again assessing opportunities within the sector.

The economic outlook may continue to temper decision-making in the short term. Nevertheless, improving occupational fundamentals and a more stable cinema market are helping to rebuild investor confidence.

Pricing remains well above pre-Covid levels, and any recovery should not be overstated. However, after six years in which the leisure sector has faced one challenge after another, there is a growing sense that the market is beginning to emerge from its prolonged period of uncertainty.

For investors, this could increasingly shift the conversation away from what leisure has endured over the past six years and towards where value may now lie.