With many commercial properties, from officesand retail stores to pubs and hotels, remaining empty, property owners will very soon need to start looking at how to repurpose assets that aren’t making money right now and may not again when things return to a “new normal”.
After the lockdown lifts and the COVID 19 crisis has subsided, commercial property owners with vacant buildings who have the means and the foresight to think beyond cost cutting around their property portfolio will be looking at a different landscape in terms of how future work and leisure spaces need to be designed and enabled.
As this “new normal” unfolds many empty or unused properties will become irrelevant for today’s user. However, depending on their location, they may lend themselves well to function under a different purpose. For example, some retail premises will be requiring change of use (subject to planning) and former industrial units will be in demand as e-commerce distribution centres.These kinds of changes would help to accelerate e-commerce adoption and help to redefine commercial and industrial real estate.
New working practices such as staggered hours and more remote working will reduce the amount of space that companies need for their offices and existing commercial sites will look to become viable for redevelopment as mixed use. Locations could combine office, hotel, work space, conference facilities and affordable accommodation for key workers, for example.
Outside of the cities and densely populated urban areas, strategic locations will become more significant as people and businesses are predicted to move away from central locations when they are no longer reliant on commuting 5 or more days per week.
The task of repurposing and redeveloping empty buildings is going to require careful consideration of public health and safety measures and investment in technology.
Features including AI, sensory technology, thermal imaging screens, touchless entry and disinfection/air purification systems will become standard in order to help keep people safe and reassured. User density will also be significantly reduced. Therefore, new building designs will promote social distancing and accommodate “social bubbles”.
Changes to commercial lease structures and commercial landlord/tenant relationships are also going to require property owners to reposition and adapt, especially if they have leisure and hospitality tenants (for example) who have been unable to trade due the COVID-19 crisis and cannot survive with the burden of existing rent and rates payments.
In the last two weeks, PGP has been approached by several property owners who have tenants that are vacating properties due to the damaging financial impact of the virus.
The last thing these landlords want isto pay security costs and empty rates when they have lost rental income for the forseeable future and are left with commercial properties that nobody wants tooccupy/use.
PGP sees this pattern continuing, and has property guardians ready to occupy and protect vacant buildings immediately at no cost to property owners, giving them breathing space by removing holding costs until they decide on the future of their assets.