2024 could be the year of investment in the regeneration of historic buildings a sector specialist forecasts.

Charles Warrack, partner at property consultancy Fisher German, says he’s witnessing a shift in both the commercial and resi markets towards renovation and restoration rather than building from scratch. 

This is partly down to regenerated buildings having a reduced carbon footprint plus a quicker turnaround on completion. 

Warrack says he’s also seeing buyers pay an increased premium for sites with change-of-use planning permission already in place, or permission to build further units on existing land, as fewer buyers are willing to try and seek permission themselves with backlogs in the planning system slowing progress.

He says the more stable macro-economic outlook for 2024 means this sites-with-permissions trend will escalate.

“While regenerated buildings and sites with consent for changes have always been more desirable, we are seeing this demand increase as 2024 begins and we think it will only increase further when borrowing costs come down” he says.

“In the past, conditional offers subject to gaining permission may have been suitable for particular sites, but now it is almost always worth it to get that change-of-use permission first. The time and money needed to secure consent is almost always paid back from the sale.”

As an example Fisher German cites recent investment opportunities in the Midlands such as the sale of a retail unit with permission for the top two floors to be converted into 13 residential apartments, and a children’s play centre with consent for two first floor flats.

Warrack concludes: “Sites like this, where historic buildings can be converted and new buildings created, offer the best of both worlds to buyers assuming consent has been secured. ESG is becoming increasingly more important for buyers, so buildings which can be renovated to a high specification are seeing significantly more interest. It is often more energy-efficient to work with what you have rather than building it from the ground up.

“However, the scope to also build on-site alongside a conversion gives a buyer a chance of additional income after they have finished their renovation on the existing building. When borrowing and the cost of materials improve, we expect demand for these kinds of opportunities to rise significantly.”