This is the process of converting old redundant buildings into re-use or useable state. The ultimate of property management is probably refurbishment. There has been a growing pressure since the early 1980s to protect and manage property rather than always demolish and redevelop anew. In some countries, it is seen to be the fastest expanding sector in real estate industry. Refurbishment potential is not just realised in the main sectors of existing office, shop, hotel and individual buildings but such as cinemas, churches, markets, power and railway stations, breweries theatres, location sheds, water mill, dock and harbour buildings. This spread however is likely to continue across all residential and commercial fields of development. A typical refurbishment will include cladding the building, renewing all heating and plumbing systems, providing false ceilings and or raised floors to accommodate new services ducts, upgrading all common parts and renewing windows and window frames.
The three areas of development on which refurbishment are carried out are: industrial, office buildings and shops/commercial properties.
- Industrial: Since mid-1980s a growing number of successful conventions of industrial buildings have been implemented. Although many of these fall outside the mainstream of conventional property development, there are equally many opportunities existing for profitable industrial development to be tackled by entrepreneurs who understand the special factors that underlie the market. Crucial factors that determine whether a viable industrial refurbishment or conversion can be effected include:
- Initial outlay: this must be kept to a minimum, not merely in respect of capital, but with regard to cost of work.
- Overheads: a successful conversion can take place where overheads are reduced as far as possible.
- Location: buildings best suited to conversion are convenient for both staff and customers, say five minutes at most from the nearest public transport, existing bus demand and have good access off main road.
- Site coverage: deep buildings with poor aspects should be avoided
- Structure and condition: a building with superior initial construction and where there is little need for major repair is most attractive. The structure should be fairly sound and capable of being made wind-proof and water- tight without too much trouble. Ground floor height should be between 2.5-4.00m and buildings of more than four floors would be problematic. Staircases likewise should be wide enough to accommodate people / load.
- Statutory: the building must not be too difficult / costly to have to comply with such statutory requirements as fire or public health and it often helps if there is no need to apply for planning as per change of use.
- Office building: Cost of refurbishment can be very difficult to access because the main structure of a building can suffer from extensive dry/ rotten timbers or severe rust to steel frames which might be uncovered when work has already began. Planning requirement or aesthetic considerations may dictate or favour the refurbishment of a building’s existing façade than re-cladding. Additional floor space can be created by constructing extra mezzanine or gallery floors, or bringing basement space into more effective use. Local authorities are empowered to relax certain statutory regulations where refurbishment would enable historic buildings to be given new lease of life.
- Shops and commercial properties: Most major planned shopping centres built decades ago are now obsolescent and in need of substantial refurbishment. However any decision to refurbish on a large scale must obviously be preceded by a careful study to ensure that expenditure is justified. Timing of refurbishment is undertaken in such a way as to maximize cash-flow, taking into account risks, projected running costs and the consequences of not refurbishment. Thus, inevitably, opportunities will be presented to buy-out leases in re-let premises: create extra letting space in useless voids or by extending the building or narrowing malls; to enclose open centres ; install new plants and building servicing facilities; adjust tenant mix, add missing factors and generally upgrade the environment and decoration of the centre. If the work is successful, it will lead to increase in turn-over and higher rents will be achieved. Thus refurbishment will be embraced by many landlords as a means of maintaining as well as enhancing the value of a building.
