Padel is gaining traction across the nation as one of the UK’s fastest-growing sports. The sport has quickly established itself as an increasingly popular alternative to its traditional racquet counterparts, with the Lawn Tennis Association recently announcing the milestone of 1,000 courts across the nation and a player count of over 400,000. While the sport is rapidly accelerating, there is still plenty of headroom for growth before it reaches critical mass.

Thanks to the sport’s inclusive and social format that resonates with players of all ages and abilities, combined with a fragmented market primed for consolidation, Padel is emerging as one of the most compelling investment opportunities in UK leisure. The questions for investors include how best to catch the market, which model to invest in and which player to back.

Padel’s potential for scale

Spain remains the clearest benchmark of what a mature Padel market looks like. With more than 17,000 courts, the added benefit of a warmer climate, and a player base that rivals gym membership, the sport is deeply embedded in everyday leisure. While the sport’s popularity in the UK has grown almost exponentially in the past six years, there is still scope for further growth.

Several underlying drivers point to why that growth is likely to continue:

  1. Consumers want to be more sociable
    Padel aligns with the shift towards activities that combine fitness with social connection, the same driving force behind the international rise of activities such as pickleball, climbing gyms and Hyrox. This reflects a broader trend that can be seen in competitive socialising, where consumers are increasingly prioritising activities and sports that are accessible and introduce a fun, engaging element to their group’s social occasion. Participation data from Sport England shows declining numbers in tennis, squash and badminton, suggesting a clear opening for alternatives that are easier to pick up and are more social by design.
  2. Consumers are prioritising experiences over goods
    Padel is also well placed to benefit from shifting consumer habits, with more and more people prioritising experiences over goods and directing more spend towards activity-led leisure. This is supported by platforms like Playtomic and PadelMates which make it simple for players to book courts and find opponents and encourages repeat play.
  3. Investor confidence is accelerating expansion
    The sport’s growth is being reinforced by growing investor confidence and capital. Dedicated operators such as Game4Padel and Rocket Padel are expanding quickly, while local authorities and private investors are funding new facilities to broaden access. As well as this, established leisure operators are making their own moves into the sport – this is often within their existing closed-membership models as opposed to the pay-and-play offered by newer padel companies. For example, David Lloyd’s latest plans to further increase their exposure to the sport can be seen as a way to boost membership and enhance its future appeal. Crucially, padel shares the same structural pressures as other capital-intensive leisure formats and while significant upfront cost is required to build venues, current court utilisation rates are enabling a swift return on initial investment.

    The demand for the sport is clear and for investors looking to bolster their portfolios with high growth assets, these structural drivers are a case in point – Padel has already reached a scale where it can support serious investment, while still offering the growth headroom that doesn’t exist in other more mature European markets.

Backing the winners before consolidation

At present, operators are pursuing very different approaches. Premium indoor clubs, such as Rocket Padel and Padium, have positioned themselves as full-service destinations, often located on prime real estate, with coaching, retail and hospitality, but this comes with significant fixed costs which sees court hire being up to £100 an hour at peak times. Mid-market venues have focused on covered outdoor courts with a more relaxed hospitality offering, whilst at the value end, the focus is on uncovered and often self-service outdoor courts with limited on-site amenities.

The most effective approach remains to be seen and as more and more players take up the sport, the question is whether court hire stays the main revenue driver, or whether food, drink and events ultimately become the more important profit centre.

This market fragmentation also serves as a catalyst for ascertaining which business models will win out, as well as consolidation. The UK has seen similar growth stories in the leisure sector. In the UK gym market, operators at the premium and low-cost ends have established durable positions, while mid-tier clubs have been squeezed. Within five-a-side football, consolidation has occurred around two national players, Goals and Powerleague, after an early period of scattered local operators.

Timing the Padel wave for investors

The best chance to create value in Padel will come while the market is still expanding. Investors will be focused on buying into a growing asset, where utilisation and revenues are climbing, rather than once growth has plateaued, and valuations are already set. Entering too late risks paying for maturity.

Sweden serves as a cautionary tale to both operators and investors with an appetite for the UK market. Padel’s rise in Scandinavia was even sharper than in the UK, with interest generated during the pandemic and then later fuelled by private investment and a wave of speculative overbuilding. In the end, the country was left with an oversupply of venues and many closed their doors.

The UK faces its own constraints. Planning restrictions and local opposition on noise can make site selection challenging, while the country’s climate is an added complication for operators choosing between outdoor and indoor models. This is compounded by a lack of funding to keep up with the sheer volume of potential projects currently available.

Right now, the absence of clear valuation benchmarks also gives first movers an advantage. Early backers can set the standards for how successful Padel businesses are valued, rather than paying established multiples once consolidation begins. For investors, the implication is straightforward. Backing operators whose models can scale and drive long-term repeat usage will be key once consolidation begins to reshape the market. For some, success will come from building padel as a sport with a loyal weekly player base. For others, it may be the ability to layer in food, drink and events, in some cases becoming a larger revenue driver than the courts themselves, that delivers the winning position.

This article first appeared in Propel.

Written by Jananan Nathan, Associate Director at Cavendish.