Are we living in the conversion era? From plans to convert a Debenhams in Leeds into student accommodation and transform three historic buildings in Glasgow to serviced apartments to hotels in Hong Kong morphing into coliving and part of Detroit’s iconic Book Tower reopening as an extended stay hotel, mass repurposing of traditional buildings to innovative living is taking place across the globe.
Inspired by pandemic-accelerated trends, experienced developers and investors are keen to take advantage of new innovative living opportunities, but a successful conversion relies on software as well as hardware. Here’s why PropTech is the final piece of the puzzle.
Why convert to innovative living?
Building conversions aren’t new. Large public buildings and Victorian houses have long been reshaped into residential flats, but the Covid pandemic has ushered in a switch to innovative living for three main reasons.
Working from home - It was one of the major topics during lockdown: will employees return to the office? As countries gradually open and white-collar workers transition to hybrid-working schemes, it appears the answer is ‘yes, but not as much’. That means offices standing empty or at reduced capacity, shops and cafes welcoming less footfall, and downgraded revenue projections for building operators, developers and investors. However, with councils keen to re-energise city centres and provide affordable inner city housing, getting planning permission for ‘change of use’ applications will likely be easier and there is no shortage of demand for living spaces.
E-commerce - Online shopping is here to stay. What was the only way to purchase goods during worldwide lockdowns and travel restrictions remains the most popular way to shop with 70% of UK consumers now preferring to buy online (up from less than half pre-pandemic) and UK online monthly retail sales topping £10 billion for the first time in July. Combined with expensive inner city rents, brands with large retail spaces, such as department stores, are being swayed by the potential of innovative living and mixed-use developments.
Profitability - The opportunities have not been missed by investors. In March 2021, a res:harmonics-sponsored webinar on the hospitality transaction market discussed the attractiveness of repurposing stock in areas such as well-located offices to extended stay apartments. Meanwhile, Jenn Chang, Creative Director at coliving operator Common, said that dwindling hotel occupancy rates “set up a compelling prompt for a [hotel] conversion strategy. Instead of leaving thousands of pre-furnished rooms sitting empty for the years to come – there’s a great opportunity to repurpose these rooms as furnished residential apartments instead. Hotels are often located in prime locations or near transportation nodes, which makes them ideal for conversion to residential.”
Using tech for a successful conversion
Different locations will call for different conversions, but whether its offices to aparthotels, retail to student accommodation, hotels to coliving or residential to serviced apartments, all successful conversions need a strong tech foundation. For example:
Coliving - It’s all well and good creating a coliving space complete with gym, cinema room and wellness spa, but these amenities need a PropTech solution to function properly, such as a resident booking a yoga course via an app or an operator managing gym maintenance remotely. Proptech makes coliving possible by cultivating community, providing an array of seamless services and delivering impeccable resident experience.
PBSA - The digitally-savvy student generation expects state-of-the-art tech as standard. Therefore, from a conversion point of view, it’s not just about enabling students to book rooms, organise social clubs and arrange laundry pick-up with the touch of a button, but also thinking about how your tech functionality will determine what services you can provide to attract potential students and how many bedrooms you create (and can knowingly fill). Tech-enabled data on amenities’ usage will also help future developments.
Serviced Apartments - Virtual tours of apartment blocks. Keyless check-in. Remote management of housekeeping. Document signing and guest verification. When it comes to serviced apartments, tech broadens the possibilities. For example, PropTech can be used to convert underused areas into revenue-generating opportunities in off-peak periods, such as ground floor pop-up cafés and rooftop exercise classes. In addition, you can design with different lengths of stay in mind as PropTech enables operators to easily switch unit types, stay lengths and pricing depending on occupancy and seasonality.
Think about the end-game at the start
When devising a winning strategy, you think about what you want to achieve and work out how best to get there. Converting buildings to innovative living is no different. You want to create a profitable enterprise that delivers great resident experience and using bespoke PropTech will not only get you there, but maximise the final results.