Adaptive reuse of the built environment has long been part of our urban history, often benefiting the local economy, environment, and societies across the world. However, in most parts of Asia, little time and effort have been invested to explore and uncover the value of repurposing buildings. For most, the preferred option is still to demolish existing structures to make way for newer, shinier and bigger developments.
Some of the reasons for this include land scarcity, especially in city centers, zoning regulation constraints or fast turnarounds for a new product to be available in the market.
In Hong Kong, the government's revitalization of industrial buildings scheme encourages retrofitting of unused industrial buildings. A sector that has taken a key interest in recent years are data center providers and investors. Although there is limited land supply, Hong Kong offers robust telecommunications infrastructure, reliable power supply with a comparatively lower tariff, proximity to the Chinese market, knowledgeable professionals, government support and security, pro-business environment, investment in sub-sea cables and many more benefits to the service providers. As demand for cloud computing, big data and mobility continue to rise exponentially, converting these industrial buildings into data centers significantly improves speed to market. With its high ceilings, high floor loads and flexible floor plates necessary for a data center, on average, it only takes 16 months from purchase of property to being operational compared to 29 months for an equivalent new build facility. The revitalisation scheme was launched in April 2010, put on hold in 2016 but expected to be reinstated 2019. The scheme is also attracting owners of industrial buildings to consider many other uses such as hotels, entertainment facilities and housing.
Other reasons include unlocking a property's unrealized potential to capture a new market or capitalize on the unique value, heritage, history or location of an existing asset.
Within the competitive hospitality industry, many aged and underperforming assets are rebranded and repositioned to revive its appeal to travelers and realize its intrinsic value. Renovations are often carried out in a live environment and can range from upgrading interior fit-out; remodeling internal spaces such as relocating restaurants and optimizing back of house areas; to restoring the building's facade. Some of the most challenging forms of asset repositioning are those that involve converting historic buildings with tiny windows and low ceiling heights into modern designs with open spaces, natural lighting, high-performing insulation and significant ceiling voids for centralized systems and safety provisions. But when done well, adaptive reuse and restoration of historical sites allow the community to continue appreciating its history and add to its market appeal.
Increasingly we also see a trend for environmental factors to influence the decision to reposition an existing asset. It not only makes environmental sense but also financial sense to enhance what you have rather than demolish and start again. The amount of energy, raw material and budget required for additional work would be considerably less than to demolish and rebuild an entirely new structure.
To meet the evolving needs of today’s occupants, asset owners need to be proactive about the design and performance of their assets.
At SNC-Lavalin’s Atkins and Faithful+Gould, we are helping investors, developers and asset owners reposition real estate to improve financial performance and greater investment returns as well as extend their useful life. It’s not a simple question though. There is a lot of data to consider; constantly shifting patterns, trends, and disruptors all of which needs to be balanced alongside the priorities of the asset owner or investor. The balance of these priorities is often driven by what their tenants, operators, customers or other end-users are demanding. Our integrated team offer comprehensive and flexible range of services to help maximise the return on investment across the full property life cycle.
Our multi-faceted teams take the time to understand a client’s aspirations and business drivers mission and then combine that with our project-driven data and broader market data to produce a development brief. This is honed and refined in collaboration with the client. Our team draws on the skills of the wider SNC-Lavalin Group, to include architects, engineers and Atkins financing group to ensure that the plan is bankable, attractive to investors and generate the expected returns.
These priorities and values will dictate the extent of the works to be done to the asset but all with the intent of improving the assets financial performance through increasing its value and improving returns through increasing rent (where applicable) and minimizing operating costs.
Faithful+Gould understands the true costs of any improvement works and can evaluate in detail where any investment on such improvements should be made in order to maximize ROI.