What About Those Vacant Commercial Units
Some ideas on minimising vacancy whether in its existing use or conversion to alternative uses.
It has been a couple of months since my last article, but great news in the meantime. I have finally passed my APC exams qualifying as an RICS Chartered Surveyor. A long journey and very glad to get these out of the way.
What About Those Vacant Commercial Units
This article is all about vacant commercial space. Assuming the demand is there, if a unit remains vacant, it is likely works need to be done, landlords are holding out for unrealistic rents, or management is simply not being proactive enough. Here I try and explore a few ways to reduce vacancy and replace it with much needed alternatives. I’ve come up with a handful of thoughts and I am sure there are many more alternatives out there worth exploring.
Covid has accelerated many trends, whether the increase in remote work or the rise in online shopping. This has led to many discussions, whether work from home vs the office, takeaway vs the restaurant or online vs offline shopping. People have been arguing on both sides, from the one extreme of the office and retail being dead to the other extreme of us all returning to the office five days a week and a resurgence of shopping and restaurants like never before. In my opinion, the new normal will be different to everyone, as organisations and individuals each have their own requirements and needs.
Pre-Covid and before the internet, we had little choice but to work from the office, shop in-store and go to the restaurant (if we did not want to cook). In 2022, this is no longer the case. This would imply that less commercial space is required as more can be done from home. Nonetheless, what Covid has thought us is that if you provide the right service or product, the demand will follow. And so to attract the demand; landlords, employers and stores must provide unique propositions. Whether on pricing, quality, or even the simple proposition of collaboration and networking opportunities. Something needs to stand out to attract demand. Those that cannot offer this will struggle. And it is exactly with these units that we are seeing a rise in vacancy. So what about those vacant commercial units?
The obvious answer is providing a unique proposition in its current use, which could be as simple as light refurbishment works. Looking beyond its existing use, a simple solution is conversion to housing. It is no secret there is a global lack of housing supply, so converting vacant commercial space to residential makes sense. Pushing this forward, governments need to incentivise landlords to convert to residential and penalise them for vacancy. Additionally, planners across the globe would have to encourage looser planning laws facilitating the conversion. Staying within the residential sphere, encouraging co-living is an option. With the rise of remote work, more talent is working from across the globe and is eager to travel. This would be tricky for planners as we have experienced that Airbnb's do anything but solve the housing crisis and therefore a delicate balance needs to be found, potentially enforcing minimum terms of say 3 to 6 months.
Exploring some more experimental ideas include urban farming. Whilst not certain if these are economically viable or have any environmental benefits, it is worth finding out. Whilst we figure out if these can solve fundamental issues, more certain benefits include encouragement of more conscious aware citizens and healthier diets. Alternatively, vacant spaces can be used as last-mile delivery centres, with start-ups already working on this heavily in the food sector. Another option is concept stores such as “metaverse” stores. No one knows what this means, but this could allow companies and consumers to explore the concept and better understand what future the metaverse holds in our society. I discuss this concept and the general future of retail here. The downside of these ideas is small with the upside potential of revolutionising retail as we know it. It is therefore a risk worth taking and certainly a better alternative than vacancy. Other experimental ideas include R&D centres for alternative meat, 3D printing areas and futuristic game rooms. Self-storage centres, medical centres and community spaces are further concepts that have already seen an increase in interest accelerated by Covid.
The reality is, whatever decisions are made, vacant commercial spaces, or vacant space in general, must be limited. Whether pushing landlords to let their space in its existing use, converting to much needed residential, or offering radical approaches such as metaverse stores. Regardless of the approach, vacant spaces must be minimalised and we should do everything possible to bring people back into our cities making them more liveable, innovative, and exciting places to live and work in.