With the when and how of work life returning to pre-coronavirus conditions still hanging in the balance, we are seeing a significant market shift as more and more employees are starting to work from home on a permanent basis. Along with the increase in remote working, we have seen a property market trend emerge in the form of a sharp increase in enquiries from people wanting “additional rooms or dedicated areas” that work as a long-term home office.
This increase in home working has also created another opportunity and market trend in the form of office-to-residential conversions. With research showing that a third of the UK workforce expect to increase the time they work from home by at least three days a week, there has been a surge in the number of vacant office buildings. We have already seen – and can expect to continue to see – more and more office space being converted into residential property as demand for office space drops. As employers have noted no change in the productivity of their teams working from home and the subsequent opportunity to save on pricey office dwellings, conversions are fast becoming one of the key trends to emerge from the pandemic.
The Impact of Agile Working
Looking ahead to the working from home versus office work landscape as the COVID-19 situation evolves, we need to consider that social distancing is likely to be in place for some time which means that agile working will continue to play a major role.
A good quantity of office space will still be in demand where companies may require employees to physically be in the office at least part time if the role demands it, but also for those businesses who consider it essential for a physical presence to encourage team work or face-to-face interaction to support company growth and profitability.
But this still means that downsizing office space will prove a viable option for many companies who won’t need employees in the office full-time, meaning more companies will be able to squeeze into the same building and demand for space will drop further. In addition, the pandemic has accelerated the digital transformation and workplace revolution by years, meaning many more companies will choose to take the entirely virtual route, investing in tech platforms and software that can bring their teams together over unnecessary spending on meeting rooms and ad-hoc office costs.
All of this has led to a sharp decline in demand for office space and the above-mentioned commercial to residential shift which has opened up prime investment opportunities. Tangible moves are being made towards conversions, especially in secondary cities. According to the 2020 European office market report published by BNP Paribas Real Estate, Manchester had the highest vacancy rate in office buildings at 15% with Birmingham close behind with 12.8%.
High Quality Conversions
Not only has demand for physical office space dropped but demand for high spec residential space is increasing. With individuals both living and working in their home, quality is of the essence and conversions are an ideal way to cater to this demand due to the specific requirements of the buildings chosen to be converted. The chosen commercial properties have pre-existing qualities that lend themselves beautifully to adaptation. This often includes spacious and relatively open plan layouts which are easy to refit into a smaller series of spaces, as well as ample floor-to-ceiling height – a must for any luxury accommodation.
Existing facilities such as kitchens and bathrooms whose inner workings are already connected to the building services and systems make for easy restructures around the existing connectivity. In addition, commercial buildings have already been established on a solid base with strong credentials and durable materials suited to reclamation into desirable, high-spec residential space.
Office to residential conversions are also based on location and local dynamics. For example, we are likely to see more conversions in cities with already-strong demand for housing and low supply, as well as those where the appetite for office working is lower – think secondary cities such as Manchester and Birmingham.
A New Way of Living
Developments are springing up across the city including the planned demolition of the former Old Walsall Housing Office to make way for new homes. While these homes will be grant-funded to create much-needed housing in the area, there are also projects underway to create desirable luxury housing.
Our team at Alesco are offering our clients access to prime property investment opportunities in key locations, including the exquisite development at Equipoint situated in a sought-after location between Birmingham City Centre and Solihull. Striking a coveted balance between the convenience of urban living and luxurious, peaceful surrounds, this well-appointed development boasts an entirely modern fit-out and desirable location beside local shops & amenities.,
While the pandemic has meant that commuting is no longer so integral to our working lives, excellent connectivity is still a highly sought-after feature for luxury rental accommodation; Equipoint offers direct transport links to the city centre from Birmingham New Street and Acocks Green stations.
It’s a well-known fact that property investments of this kind are only as good as their developers, and Equipoint has been established by the best of the best. Urban Village are exclusive property developers with more than a decade of experience, devoted to the renovation of extraordinary buildings and historic city centre sites to create new, residential communities.
With the highest quality developments in Birmingham expected to see an average price square foot increase significantly in the coming months thanks to an increasingly enviable quality of life without the hefty price tag of cities such as London, this is a prime property investment prospect.
For more information on Equipoint and the most exciting investment opportunities on the market today, contact us.