The repurpose revolution

In the space of nearly two years our lifestyles have dramatically shifted. Bar a lunchtime trip to the local convenience store, some of us are happily getting through the working day using just one building: the house we live in.

And it means many of the other buildings we once heavily relied on – shops, offices, restaurants – are now left vacant. But even though their current use isn’t being fulfilled, there are dilemmas across the real estate industry they could hold the key to.

Even pre-pandemic, investment in the life science sector has been growing year on year. Covid has driven fresh demand for laboratory space in an industry that was already struggling for supply. But can abandoned retail units provide the answer?

New planning regulations now mean developers don’t need planning permission to convert commercial property to class E uses, which includes laboratories. So with the planning obstacle somewhat removed, it’s just a case of finding the right site to repurpose.

In the past, life science developers have reused offices, but because of the very technical demands of the sector they can often be too complex to convert. However, certain retail units and department stores offer a more suitable specification.

They’re large in square footage and offer plenty of floor to ceiling space. It means they provide high-quality ventilation and a flexible space that can reconfigure to suit different projects. Also, existing facilities like service lifts can be just as useful.

Although admittedly not as much as before the pandemic, units in city centres can still offer a lot of foot fall. This can encourage an environment where life science companies can be more transparent with their work and increase engagement with the community. Large capital cities like London are also ideal for attracting the best talent in the sector.

The potential for these projects looks encouraging – Savills has identified 100 suitable units in London alone.

Not only has the e-commerce boom put pressure on companies like Amazon and DPD to find more warehouse space, but also to identify the right locations to stay on top of their near-instant delivery times.

So logistics developers are looking at creative ways to bring their warehouses closer to urban locations and the people that need their goods, as opposed to industrial sites way outside the city centre.

Developers in Paris have been addressing this issue for the best part of a decade with their ‘logistics hotels’ – mixed-use, multi-storey developments that include distribution centres as a key part of their design.

One of the most notable examples of these developments has been Chapelle International, which opened in 2018 on top of an abandoned railway north of the city. Although three stories make up a distribution hub, it also houses offices, a data centre, leisure facilities and an urban farm.

Laetitia Dablanc is a logistics expert and professor at the University Gutave Eiffel in Paris, and she believes a mixed-use solution makes urban distribution centres more palatable.

Occupants can access a range of services, while also benefitting from goods being delivered to their door in record time. “They are also smart buildings, minimising environmental impacts and land footprint”.

She also went on to say it makes savvy business sense for the developer too. Rental rates for offices and sports facilities are much more lucrative than logistics alone and can bring in a healthier return on investment.

The housing crisis persists. Global real estate company JLL estimates a shortfall of 750,000 new homes over the next five years. But it looks as though unleased office blocks could go some way to providing one solution.

City of London Corporation just announced its post-pandemic revival plan and sees office to residential conversions as a key part of that recovery roadmap.

And across the country, JLL recently reported on two office blocks in the Midlands set to be converted into apartments as part of a £54 million refurbishment. And a council building and disused bowling alley in Dorset reserved for the same fate.

As part of their ‘levelling up’ programmes, the UK Government has promised £4.2billion for regional transport links outside of the capital, which could bring more investment going into transforming suburban business parks into residential estates.

But the recent changes to permitted development laws has raised genuine concern over the standard of living these conversions could deliver.

Permitted development laws allow buildings of a certain type or specification to be built without having to apply for planning permission. After the most recent round of changes from the Government, they now apply to all commercial units, including shops, banks, restaurants, gyms, creches and offices.

Although it removes a lot of the red tape for these developments and helps the residential sector complete more projects, the houses often deliver substandard living conditions.

Without having to go through local planning, developers have no obligation to provide for affordable housing and consider the surrounding infrastructure, such as road access and proximity to local schools.

The Ministry of Housing, Communities and Local Government carried out some research on the quality of homes built via permitted development in July of last year.

64,798 offices were converted to houses between 2015/16 and 2019/20 and because developers weren’t required to meet affordable housing quotas, it meant a potential 16,200 affordable homes went unbuilt.

But with a growing pressure for developers and landowners to demonstrate genuine social responsibility, hopefully the change in laws should mean a positive step towards developing high-quality housing units and solving the ongoing housing crisis. 

We’ve identified three possible repurpose strategies here, but the list of conversion scenarios and opportunities goes on an on. The post-pandemic perception of office wastelands and deserted high streets couldn’t be further from the truth. In time, the industry will breathe life into these buildings and reimagine how they can better suit our changing needs.

https://blueprintfuture.com/people/logistics-city-laetitia-deblanc-qa/

https://www.wired.com/story/paris-ecommerce-warehouses-get-chic-makeover/

https://www.jll.co.uk/en/trends-and-insights/cities/how-post-pandemic-living-will-redefine-uk-real-estate

https://www.local.gov.uk/about/news/lga-offices-left-empty-covid-19-could-result-surge-substandard-home-conversions