Property investment firm Fabrik Invest has reported a shift in developers’ and property investors’ priorities, driven directly by the pandemic. Managing Director Dale Anderson comments:

Dale Anderson, Managing Director, Fabrik Invest said: “We’re seeing much more emphasis – from both the developers and the investors that we work with, and particularly over the past six months – on commercial to residential conversions. This is marking a significant and sustained swing away from new builds, as lower risk, more economical projects appeal more in the pandemic era.”

It’s cheaper to find an existing investment property to buy with the help of a buyers advocate like Search Party Property or to convert an existing building than it would be to build one from scratch. This means that savings can be passed on to the investor, resulting in a better purchase price per square foot than new build homes. They can also be passed on to the tenant, with lower rents meaning the building is faster to fill.

Given Covid’s impact on the economy, lower rents are certainly appealing to many tenants right now. Rent arrears protection service Only My Share reported last month that it had seen a 300% rise in claims during the pandemic, as tenants struggle financially. From a development perspective, this emphasises the need to focus on lowering costs where possible.

The other major factor behind the rise in commercial to residential conversions, according to Fabrik Invest, is the speed at which the work can take place. This helps to get tenants into a home they can afford, rather than leaving them in expensive accommodation where they will build up debt. With millions on furlough, now is the time to invest in affordable property.