Turning A Commercial Property Into A Residential Location
For close to nine months now, one topic has dominated every aspect of national and international news, and it’s likely to run for a few more months yet. The pandemic has seen sporting events rescheduled or cancelled entirely, changed the way people go on holiday, and could yet completely change the way the global economy works. And for those of us who invest in property, it could still have a bigger impact.
With many businesses changing the way they work, more and more work is now being done outside of standard workplaces, which in turn is affecting the ability to draw commercial rents. Even when the pandemic is over, it’s a fair bet that companies will be looking at the question of property leasing and asking whether they need the expense of premises rental when most of their workforce can simply telecommute, virus or no virus.
Is it time, then, to convert some commercial property holdings into residential homes? The idea may be worth considering…
Affordable housing will always be a requirement
While the last nine months has shown us that the workplace is not necessarily an essential part of work, people will always need somewhere to live – and indeed, if more and more of us are going to work from home then it may be the case that we prefer more space. Even a few years ago there were signs that commercial buildings were staying on the market longer than the developers were hoping. The lesson of 2020 is, surely, that more and more business owners will consider such spaces to be dispensable. If you own a business property, it’s certainly food for thought.
Office buildings don’t always suit residential tenants – or do they?
A building designed for work may not seem, on the face of it, to be an obvious candidate for conversion to residential property. Some of the qualities that people prize in a home would appear to be hard to come by in business spaces. However, if the direction of travel continues as-is, then decentralised working will change that. With the assistance of specialists like rooflanternsolutions.co.uk, a penthouse office can become a desirable loft apartment or two. With plenty of businesses, including those in the hospitality industry, still being in city centres, a residential solution in the former business district could be valuable.
It’s important to make sure the sums add up
While a building that contains three or four offices could realistically become a few dozen flats, it is worth bearing in mind that finding a few commercial renters ought to take less time than finding dozens of residential ones. However, the phrase “ought to” is (to pardon the architectural pun), a load-bearing expression. If there is less demand for residential property, then the higher potential rent for office space begins to matter less, because you won’t collect any rent on an empty office. Offer competitive rent to residential tenants – or to an agency who will take over the liability on several flats – and you might see those spaces offering you a worthwhile return on your investment.
Now is not the most stable time to be a commercial developer or landlord – so it is worth following the news and trends over the coming weeks and months, to see if there might be an alternative use for property.