Demand for good quality industrial premises remains strong in the majority of local markets. However, as industrial buildings get older they may of course degrade and fall into disrepair, or become outmoded for some modern occupier requirements. Landlords/investors may therefore need to carefully weigh-up the future marketability and potential occupier demand for their existing building against the costs and benefits of refurbishment, or potential demolition and redevelopment.
Pursuing a full building demolition and redevelopment may be cost-prohibitive, especially given the challenges of higher inflation and rising construction costs in today’s market; this option also often presents much greater environmental cost in embodied carbon and waste disposal.
Undertaking a carefully considered refurbishment, to modernise an existing building and ensure the building presents well for remarketing as improved industrial space, whilst also satisfying minimum environmental standards, could be a more attractive solution.
A measured approach to refurbishment:
Older industrial buildings obviously vary significantly in; scale, quality, age, configuration, location and position; so finding the ‘right level’ of refurbishment solution for one warehouse may not necessarily apply to another building. In some cases a building may no longer be suitable for modern occupier requirements and alternative use/redevelopment may be the only viable option. However, where an existing building can be modernised and upgraded cost-effectively, the scope and extent of refurbishment will also typically vary from case-to-case.
With the right expert market and building advice, an existing building refurbishment is often quicker and more cost-effective than wider redevelopment. A well-advised landlord/investor can upgrade their building to maximise future marketability and broaden its appeal to the relevant occupier audience. This approach may also help reduce marketing void periods, and ensure the building can be relet/sold at optimum value.
Typically, the scope for refurbishment work to consider may include:
- Improving the approach /access for the building, potentially through improving wider estate signage, fencing, yard surfacing, lighting, traffic management etc.
- Upgrading the external building envelope - to improve the building’s presentation, repair, functionality, durability, environmental performance and compliance.
- Providing adequate drainage and kitchen/WC provision
- Obtaining all necessary up-to-date compliance documents, to include Asbestos surveys/registers, Fire and Health and Safety certificates, EPC etc.
- Improving lighting and building insulation/environmental performance.
- Removing older ‘legacy’ fixtures and fittings from previous occupation and making good, to maximise the building’s usable floorspace and internal eaves height.
- Improving internal finishes, to provide clean well-presented space throughout.
Detailed Surveys
The potential to upgrade, and likely costs, will depend upon the existing structure and its condition. After an initial evaluation of the project viability, it is also essential to have a detailed structural survey to inform the planned refurbishment.
Older industrial stock may represent a valuable, and often overlooked, investment opportunity. With the right professional advice and expertise, older buildings can be successfully refurbished and repositioned to; improve marketability and disposal prospects, potentially enhance income and reduce running costs, subsequently re-instill longer term property value.
If you wish to discuss any existing industrial property in your portfolio, please contact:
Dominic Faires.
07967 375962.
d.faires@hicksbaker.co.uk
