The property market is ever changing. Covid and the current fairly uncertain economy are leading to even more changes in the property market too. But the saying as one door closes another opens is literally true when it comes to property. In property a changing market can present new and exciting opportunities within it by way of development projects. Here we will look at some current opportunities and ways to get started in property development.
What exactly is property development? At it’s simplest property development is developing one land use into a different land use. But ideally it should be more than that: Successful property development is about turning one land use into not just the same type of land use but a higher value land use.
Now let us move on and look at some types of property development that may offer opportunities at the moment:
Residential renovation. This is perhaps one of the simplest property development projects. At its simplest it is taking an outdated property and refurbishing it to a modern standard. The most financially viable residential renovations usually incorporate other ways of adding value, such an extension or loft/basement conversion, however.
Recent events have almost certainly created more development opportunities here. As more house buyers are now looking for more space buying a small residential property, renovating it and developing a larger family space could be an opportunity to consider right now. Some areas have a shortage of high end and luxury properties which may also offer a development opportunity too.
Land development. Land development schemes might involve taking a plot of land such as agricultural land, redundant commercial land or (for a smaller scheme) even a garden and building on it.
Although on the face of it one of the most straightforward development schemes this has historically proved to be one of the more challenging for planning reasons. Local authorities are sometimes reluctant to grant consents and public opposition can be high.
New permitted development rights have opened up new opportunities here. Furthermore, many new development opportunities could be unlocked here should the Government’s plans to reform the planning system materialise. (Although currently it appears that these plans could be paused.)
Retail to residential development. With the ongoing decline in high street retail, alongside a seemingly insatiable demand for new homes, developing redundant shops into homes is likely to be one of the hot property opportunities of the decade.
Here’s a more detailed look at The Opportunity to Turn Shops Into Homes
Commercial to residential development. Many developers have already taken advantage of opportunities to convert, for example, office space into residential units. This is something that is likely to continue, with the opportunity perhaps moving out into new suburban or semi-rural locations where it has not previously happened.
Commercial to commercial development. As ways of doing business and working change, developing property that it being used for one commercial use into another commercial use could be another hot development opportunity of the next few years.
Here are a few examples of potentially up-and-coming commercial to commercial development opportunities over the coming years:
Large format retail into small format retail. The failure of numerous large retailers in recent times means many areas have a surplus of large units. Demand for smaller units from expanding retailers, click and collect type operations and small start-up retailers seems more buoyant.
Flexible and shared workspace. This has been a growing trend of late. Covid is likely to continue this trend with more companies looking to occupy shared workspace or co-working space (perhaps with employees working partly from home) on a flexible licence rather than take a long lease on a dedicated office.
Here’s more about Flexible Workspace The Next Big Story
Retail to warehouse and logistics development. While many areas have a surplus of large retail space there is a shortage of warehouse space across the country, particularly to supply the e-commerce industry. Some experts suggest this could see some big box retail parks being redeveloped into warehousing or logistics space, such as for ‘last mile’ deliveries.
In the meantime .... find a meanwhile use. The concept of the meanwhile use can be very relevant in property development. Meanwhile uses involve purchasing a property with a view to developing it in future but using it (or perhaps renting it out) for something else until the time is right.
Meanwhile uses not only generate an income from property awaiting development. They can also create new up and coming areas with a degree of placemaking that can raise local land values too.
Good examples of meanwhile uses include temporary car parks, community amenities, arts and entertainment venues and Boxpark-type developments.
While fast changing markets are sometimes seen as a problem in other industries it is the case that the reverse is usually true in property. Fast changing markets create more opportunities in property development than when the market is more stable.