24 Aug 2007


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Cashing in on floor space above retailing outlets

Source : Countrywide Property Management
All too often, high street shops use the floors above their retail units for storage, or – worse still – leave them empty, and degenerating

Frankly, this is a waste of good space which, after all, retailers are still paying for. So, with town centre regeneration right across the country, and demand for rented accommodation outstripping supply, here is an opportunity to turn a liability into a money-earning asset.

Before embarking on the conversion, there are a few key things to bear in mind: most importantly health and safety legislation. Are the premises safe for residential use, and do they, or could they, have a separate access? Next, do you need planning consent, or just to comply with building Regulations? Are they historic buildings or in a conservation area, which would add to the costs? Can you get insurance cover?

How much would conversion cost? What return would you get? Is the site in the right location to attract tenants? Should it be furnished or unfurnished?

At Countrywide Property Management we offer a simple turnkey solution. Banks, building societies and mainstream retailers have all taken advantage of the service, and benefited as a result, both from little known government grants and the rental income. And, hundreds of additional – affordable - homes have been brought into circulation.

Our first priority is to carry out feasibility studies on all the properties earmarked for development, assessing their suitability, estimated conversion costs, accessibility and any parking restrictions, as well as rental income. We liaise with local authorities to determine their views and, if everything stacks up and the client gives the green light, we apply for all necessary consents.

As project managers, we draw up a specification, seek tenders for suitable contractors and, within months the work is completed to a high standard, ensuring full compliance with the latest legislation.

Running in tandem with the building work is a marketing programme with our sister company, Countrywide Residential Lettings, the UK’s largest specialist agent, to seek tenants at local market rents for all the properties, wherever they are, as and when they become available.

We then manage the whole portfolio, including the Tenancy Agreement, handling tenants’ deposits within the new legislation, as well as the approved repairs and maintenance budget. Regular reports are provided, listing all properties, the income and any outgoings, length of tenancy etc. on a monthly, quarterly, or annual basis – whatever the client requires.

Nowadays, with lenders relaxing their previous rules on loans for flats above shops, some clients choose to sell on the asset on completion, although buyers cannot have the freehold, which remains with the owner of the whole premises. This option can, however, realise a one-off capital gain, after the refurbishment costs are taken into account.

Faced with the option of meeting a pubic need for more housing, and having an income from previously dead space, businesses are more keen than ever before to review their town centre property assets.

Chris March, director of Countrywide Property Management

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