Seeing the residential potential in typical commercial units
A case study in seeing things differently and finding a better angle. By reframing their use, Peter was able to significantly increase the value of run down commercial properties and reposition them as attractive residential options.
PROBLEM
The properties in question were a pair of shops with upper parts. It occurred to Peter looking at the properties that they had good residential values, for one who knew how to capitalise on them.
The issue was that both properties were in a run down state and being used for storage of commercial kitchen equipment and materials. The owner was in construction and had underestimated the opportunity at hand. Positioned as they were, there were no takers for the properties at £1.8m. The refurbishment costs were high and putting buyers off of the property.
SOLUTION
Peter and his team assessed the residential against the commercial values, identifying potential areas for extension so that the floor capacity could be significantly increased by 900 square foot. He obtained an affidavit, confirming the upper floors and basement were in constant use as residential units.
He submitted a Mansard application for an additional floor and prior approval was sought for change of use of the lower A1 shops and storage to C3 residential to create a total of 8 apartments of 1 and 2 beds.
Application for extensions to flats after the prior approval was obtained on the first four larger apartments and enabled a roof terrace to be installed above the extension, adding a lot of value to the property.
OUTCOME
Peter and the team bought this directly via the vendor’s solicitor and as such, had no need to involved agents.A scheme of eight units and extensions were granted with a total net sales area of 4,300 square foot and sales value from original area of 3200 square foot.
The value created with this strategy was impressive: Price per square feet achieved was over £1,000 per square foot. The build cost came in at circa £1m, with total gross development value reaching £4.5m.
