Sporting stadiums: sweating your asset

November 20, 2014 / By  

Sporting stadiums have long been an important part of world cities, acting as a magnet for urban populations to congregate. In recent years the large volume of masterplan precincts and urban renewal projects has led to the development of many new sporting stadiums, often acting as the initial catalyst to create activity and exposure to mixed-use areas.

While governments and sporting codes have traditionally invested the upfront capital in sporting stadiums, the private sector has become increasingly involved in recent decades via a range of freehold and PPP arrangements such as BOOT (Build, Own, Operate and Transfer).  The sophistication of the investor profile and complexity of these structures has led to the sector generally seeking to maximise income on assets to ensure a positive return before returning the asset to government and sporting bodies.  As a result, the focus on the concept and design of new stadiums has magnified in recent years, with the incorporation of other uses critical to ensuring a successful commercial outcome.

JLL has had experience directly with some notable stadiums/events and their surrounding precincts, including:

  • Docklands Stadium (Melbourne, Australia);
  • Commonwealth Games Village (Gold Coast, Australia)
  • London Olympics (London, UK), and more recently;
  • The new Atlanta Braves Stadium at Sun Trust Park (Georgia, USA)

From witnessing good (and the not-so-good) examples of delivery, we have compiled a list below of considerations when looking to maximise commercial returns from new sporting stadiums:

  • Retail, Retail, Retail – sporting events and retail go hand in hand.  However, getting the scale and mix of retail right has proven tricky for many.  In pre-planning, the customer profile and their desired retail experience must be researched… it will pay big dividends.
  • Move the crowds from home to the bleachers – the cost of parking—both money and time cost—can be a deterrent to spectators attending a sporting event.  Governments and planners must ensure adequate public transport is in place so the masses can access the stadium without putting existing road infrastructure under stress.
  • Annual Activation – Monday to Sunday, summer to winter, AM to PM; the stadium precinct must be activated year-round to support ancillary uses.  While activating a stadium precinct year-round may mean holding multiple events, operators must also think outside the box. An example of this is VTB Stadium in Moscow, which is proposed to be located above an enclosed shopping centre, a development proposed in planning for the 2018 World Cup.
  • Low capital investment: low risk, potentially high returns – pop-up shops and space activation allow event owners and retailers to provide retail goods with minimal capital investment.  More importantly, it allows flexible space that can change to meet consumer demand over this long holding asset.  The Australian Open has been a good example of this, with bars and tents providing adaptable and low cost space.
  • All of the stadium is valuable real estate –it should be recognised that the whole stadium is valuable real estate. Other revenue streams, such as signage and telecommunication towers, should be explored.

Melbourne Docklands: As shown in the picture, Melbourne’s Docklands stadium shows many elements of those mentioned in this article, with: temporary retail spaces, mixed-uses surrounding the site and; public transport access.

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