Unlocking your potential – how to find the hidden value in your land
Ask an organisation whether it knows exactly what’s in its property assets – and if they’re getting maximum value from it, and the honest answer will probably be ‘no’. Even if the land or property managers know the square footage on their books, the chances are they will be rather more hazy on exactly what they’ve got where, particularly when it comes to small plots.
In our experience, many organisations - from local authorities and religious institutions, to educational bodies and NHS trusts - simply aren’t aware of the potential value that’s lying unused in their portfolio.
Maybe it’s a small tract of land at the back of a retail development; an empty shop on the high street; a few disused garages or lock-ups or unused space above commercial premises or offices. Often, these are brownfield sites and well-located in terms of infrastructure such as access to transport networks, amenities and services such as water, electricity, gas and telecoms.
These all have the potential, given the right approach, to be given a new lease of life and unlock a revenue stream for the owner, either in rental income or one-off sale value. You could be looking at putting in a couple of small flats above existing town houses, or a 50-home development on land once occupied by a school.
Every little helps
There’s a bit of an obsession, given the pressure on local authority housing targets, to focus on schemes where you’d build 200-500 homes all in one spot. However, particularly if you are looking for new-build opportunities for a small town, finding smaller plots and putting a couple of homes here, 10 there, half-a-dozen down the road can make a lot more sense. This approach means the numbers soon stack up, you’re making use of existing but unused sites, and you are avoiding the need to build on greenbelt areas.
For example, a recent review of Stroud District Council’s portfolio allowed us to secure planning on five individual sites, creating eight much needed new homes (mixture of two and three bedroom homes and flats) with a further three sites currently in planning. A similar approach has been undertaken with Gloucestershire County Council, where we have secured planning for 69 homes on underused land.
These small-scale developments can provide a useful boost to social housing stock, or can provide an income source for private landlords, as well offering owners the chance to unlock the cash value in their land through a direct sale.
A small plot with self-build potential might well appeal too, to a smaller, local builder who is only in a position to build and sell on one-property developments.
It’s an approach that may also be less problematical from the planning perspective as brownfield developments may be viewed as less intrusive by the local community.
There’s an additional upside in that some of these disused sites can become a bit of a magnet for antisocial behaviour – turn them into smart accommodation or even offices, and this becomes much less of a problem.
Another interesting angle here is that making use of ‘fallow’ land plots in the high street at a time of declining footfall can inject some much-needed vibrancy and perhaps encourage a new lease of life for nearby shops, coffee outlets and eateries. Upper floors above retail spaces are also often forgotten spaces. These all may be small scale, but even pockets of regeneration can act as triggers for further development, refurbishment or repurposing.
Audit the opportunities
The first step is clearly to take a look at the land you have that’s currently not in use and therefore not generating any revenue, and also exploring what it could be used for. Would this old cricket field work as a location for some sheltered housing? Could the derelict hospital site find new life as small development of starter homes? Or would the block of old garages provide sufficient space for two semis and gardens for both?
Once you have a clearer idea of what you’ve actually got in your portfolio, we can help you to establish what it could become, you’ll then want to consider whether your organisation is in a position to become the developer, or whether you want to work with, or sell on to, a third party.
There are challenges, of course. For example not all social housing providers want to work with properties that are scattered around, particularly in rural areas where the resources required to manage these would be greater than those needed to look after a block of flats or a concentration of units in a single area.
Any refurbishments, developments or redevelopments also need to be sympathetically designed and in keeping with the local environment, and there can be resistance from political, as well as aesthetic, perspectives. It’s undoubtedly well worth considering the options and talking them through with the local planning consultant to identify what’s likely to be well-received, and where there might be hurdles to overcome.
This is when using a chartered architectural practice can be of great help. They can produce feasibility studies for single or multiple sites and are able to have those difficult conversations with planners ensuring that, as far as possible, that any developments you might want to bring before planning committees encounter as few issues as possible. It’s worth taking another look at your property portfolio – you might be surprised at what we find.