Mon 02 Jul 2018
Lee Whitelock, Director MNAEA
These warehouses, many of which fell into disuse following the decline of the manufacturing industry and sat derelict for some years, have since been revived and turned into offices, shops and luxury residential apartments. Many property buyers, investors and renters now look with a fond eye on warehouse conversions.
What is a warehouse conversion?
This is an old warehouse, once used for industrial purposes, which has been divided or converted into separate apartments. These buildings have become increasingly popular in the modern age as they offer what a lot of people are looking for: open plan living, few dividing walls, high ceilings, plenty of light from large windows, and historic character.
What are the advantages of warehouse conversions for investors?
- Investors are likely to find tenants easily as there is tenant demand for warehouse conversions, especially in places like Bermondsey and the wider SE1 area.
- Warehouse conversions are typically found in inner-city areas where they are good amenities and transport links, which are also vital for attracting tenants.
- If at any point demand from residential tenants is low, you can convert the space into a commercial one and rent to a different type of tenant.
- They are period buildings which may have listed status. This can restrict your options should you want to renovate or make changes.
- Warehouse conversion apartments can be costlier to heat during winter, and this may put off some tenants who naturally want to keep utility bills to a minimum. Loft apartments can also prove harder to keep cool in the summer because of all the windows.
- Not all tenants will be attracted to living in a converted warehouse apartment, so buy property with your target tenant in mind. If you want to appeal to creatively-minded young professionals, a converted warehouse apartment is ideal, but not so ideal if you want to appeal to families.
- Sometimes warehouse conversions can be overvalued. You don't want to end up paying over the odds and not be able to sell it on for a profit.
- Always check the full condition of the property, from structural defects to plumbing.
- Make sure you buy in an area where there is a strong demand for warehouse apartments.
- There will always be tenants - and future buyers - who will be drawn to the combination of industrial heritage and open plan living.