Former retail premises could be the biggest untapped resource for new residential development, according to property software company MRI Software.
The firm’s in-depth report, ‘Charting UK Property Trends’, found that 66% of property professionals believe buildings previously used by retailers could be transformed into residential developments to give a boost to the struggling high street.
In fact, some 72% of those surveyed see residential developments of sites no longer used by retailers as the new lease of life that the British high street desperately needs. Meanwhile, 82% said projects to renovate former retail premises and create mixed-use properties, including residential, will be a lucrative opportunity over the next 12-18 months.
Interestingly, the research also revealed that three-quarters (76%) of those polled don’t believe Brexit will seriously obstruct the ability of the UK property sector to get the funding it needs to develop properties – a figure which rises to 94% for property investors, owners and developers.
More than three-quarters of respondents, meanwhile, expect demand for residential rentals in the UK to accelerate, driven by the continued high cost of buying a home which is helping to lock people out of home ownership.
“Charting UK Property Trends provides a comprehensive inside view of the challenges property players face today and where the opportunities lie,” Dermot Briody, executive managing director, Europe at MRI Software, said. “The research shows we will see a far greater number of people living in town centres, which will give a boost to retailers on the High Street while feeding other businesses such as gyms and entertainment venues.”
The survey, which gathered the responses of 144 senior property experts from a range of organisations, including investors/owners/developers, consultants, contractors, property managers, sales and lettings agents, service providers, and business occupiers, found that the vast majority of industry players were bullish on the outlook for the sector.
“Even where Brexit is concerned, the positive outweighed the negative, as two-thirds maintain that even a Hard Brexit won’t hurt their ability to get funding for property development,” Briody added.
The survey also generated some interesting findings on the future of Generation Rent. Some 82% of the property professionals questioned said ‘Generation Rent’ – young adults, typically aged between 20 and 36, unable to purchase a home due to high housing prices – is here to stay, with little prospect of buying conditions improving.
The same proportion said Generation Rent is renting for longer, which is driving demand for higher quality properties, while 90% see rentals becoming more important to the UK residential market over the next 12-18 months.
Another beneficiary of the flagging high street will be co-working/shared office spaces, according to the findings. Four out of five said initiatives such as WeWork are likely to be users of former retail premises in UK town and city centres.
Additionally, the survey revealed that Generation Z and millennials are placing high-speed broadband at the top of their list of must-haves for rental property.
Colin O’Reilly, sales director at MRI Software, said of the findings: “The challenges faced by retail won’t be solved by a shift to residential, but the trend will be a significant boost to opportunities for property owners. Retail property owners will increasingly become residential landlords. Ultimately, more people living in town centres will enhance the opportunities for retailers and other businesses, such as coffee shops, health clubs and entertainment venues.“
You can download the full report from here.