Creating a successful and profitable property development project can be relatively straightforward for some greenfield projects, particularly if the build process is outsourced to a reliable and experienced build team. However, building on brownfield sites often presents challenges, some unexpected once work is underway, and particularly if conversion work to existing buildings is involved.
Back in 2013 the government allowed conversions of commercial buildings into residential use by relaxing the regulations around PD rights and since then a significant number of office blocks have been converted. In some cases these have not been converted to a standard that meets universal approval, and recently the planning approval system has been changed to tighten up on what will be allowed in terms of living space standards.
As such, many property developers and investors have ‘made hay’ in recent years and successful conversion projects have been completed and additional residential units created, which was of course exactly what the government intended.
Owners of commercial office buildings were not slow to catch on to this sudden new opportunity and this then resulted in commercial agents and owners reassessing upwards many a site’s value. Some five years ago I was regularly hearing various comments from prospective buyers that a lot of office stock was being overpriced for sale relative to its likely conversion end value and that potential profit margins were becoming too low to make many projects worthwhile.
Given the above I was interested to learn more from Ben Richards and Jack Jiggins of XP Property about their latest mixed-use project in Spencers Wood, Reading, and I recently went along to the site to see how it was progressing.
Ben explained how they came to work together: “I studied a Masters in Architectural Engineering, and was always destined for the property industry. After graduating, I took a slight detour to play professional online poker (something for another time!), which funded my first buy-to-let property purchase some 11 years ago. I then went to the Berkeley Group, working on large scale developments in London. After completing my first personal property development (a two bed, new-build in Staines), I started my own business; AURA Architecture. And the following year, I joined forces with Jack to create XP Property.