There's Scope For More Urban Repurposing, But Try Focusing On Urban Logistics And Healthcare
How much more repurposing can our town and city centres take?
The report hinted that the scope for repurposing remains, if landlords and investors stretch their ambition beyond the traditional use categories.
The document showed that property owners and investors are already acting quickly, with 28.6% of real estate assets currently being repurposed. Closer to 32% will be repurposed in the next five years. The most popular change of use planned is to create more residential properties, with 32% of industry respondents saying they are repurposing or plan to repurpose retail to housing, while 24% are focused on converting offices to housing.
There are hints for the direction of further repurposing efforts: 83% of consumers would like to see an increase in the amount of healthcare in town and city centres, whilst 90% of respondents said that increased leisure facilities would make an area more appealing.
Not surprisingly the property sector is convinced residential, health and the still growing urban logistics sector are the future. When CMS asked property market participants for their preferred repurposing use, residential was by far the most selected asset class (87%), followed by urban logistics centres (78%) and health centres (72%).
Conversion of retail to urban logistics won the preference of 19% of property industry sources, and offices to healthcare scored 17%.
However, the research revealed that consumers have some contradictory impulses that will make life hard for landlords and occupiers if they fail to make changes quickly enough.
For instance, fewer consumers are visiting town and city centres each week since the pandemic (44%) compared to before the pandemic (52%), an exodus prompting the shuttering of some shops.
Yet when asked why they did not visit town and city centres, one of consumers’ most common responses (88%) was empty shops. Not far behind was concern in the decrease of independent stores (87%), the sector most damaged by the drop in footfall.
The quantitative survey, which took place in March and April 2022 and was conducted by FTI Consulting on behalf of CMS, gauged and weighted the opinions of 317 real estate industry professionals and almost 15,000 consumers from the UK, France, Germany, Netherlands, Singapore, Spain and the UAE.