What is it?
Give a large group of small children a piece of paper and a pencil, then tell them each to write down an adjective, then fold the paper down and pass to the child on the left. Repeat for a noun and a verb. Then tell them to open their piece of paper and let them see the silly sentence they made!
What sort of space will you need?
Any big room/space where their hysterical laughter won't disturb anyone
When could it take place?
Anytime you have a group of small children.
You could set up a blog page for the children's creations, gradually making the sentences more complicated (such as adding a preposition and another word on the end). Or challenge the children to try and make a story out of the sentences.