The New Normal Is RefurbishmentOwen Mitchell
Is it a sudden urge to develop sustainably? A wave of green conscience? Or just that, if you want to catch the economic tide before it turns, you have to grab the quickest wins?
Whatever the reason, the UK is in the grip of a refurbishment surge, as developers react to the rapid recovery of the post-Covid economy.
Data from Deloitte suggested that in several of the major regional markets developers have pivoted to refurbishment and away from new build.
A wave of conversions — of retail to residential or office, or office to residential — is also adding extra energy to the refurbishment trend.
Whilst large-scale refurbishments in the office, residential, hotel and student sectors remain typically no more than a third of a city’s major property developments, the proportion is rising, according to Deloitte.
In Birmingham 36% of projects are refurbishments, and in Belfast 37%. Manchester is lower at 28% and Leeds — a new focus for development activity — has a healthy number of conversions but only 6% of its schemes are straightforward refurbishments.
In the wake of the COP26 climate summit the property industry has suddenly discovered the green virtues of recycling real estate. ESG climate-related targets and occupier demand is set to drive a future pipeline of new building office development with exceptional ESG credentials.
This also means an increased delivery of new floorspace being supported through refurbishment projects. Asset managers are looking to build resilience into existing buildings that struggle to meet regulatory requirements, due to be brought in during 2023 and 2030.
The pandemic has brought many changes, from the way we work to our retail habit and the industry is seeing this reflected in schemes switching use, often to residential, to fill gaps in areas of surging demand.