Lionel Benjamin, co-founder at AGO Hotels
The pandemic changed the way we work, live and travel and while some aspects of life have returned to pre-pandemic times, the last few years have brought about opportunities that previously may have been more overlooked. One such opportunity is utilising council buildings that remain empty and turning these properties mix-used spaces including hotels and in turn adding to the regeneration of town and city centres.
Amid insufficient government funding for social housing and a surge in the work-from-home culture, empty council buildings are on the rise. Data collected earlier this year by the TaxPayer’s Alliance shows that the number of council staff whose place of work is listed as their home address has grown from 1,442 to 5,153 since 2019.
This means that occupancy rates in council buildings are decreasing, while simultaneously witnessing the structural decline of many buildings affected by government budget cuts and a general increase in rent across the UK. This creates an interesting opportunity for more hotel development, not only in terms of finding value in unused space, but also finding new opportunities for community development.
Indeed, this repurposing trend has been happening for a number of years with some interesting developments and others on the horizon for 2023. For example, the popular The Standard hotel in Camden launched in 2019 and was originally a 1970’s council office building and The Green Rooms hotel in Wood Green, was an ex-council building that was transformed into a hotel and arts / performance space. More recently Liverpool’s majestic Municipal Buildings are being transformed into a luxury city centre hotel.
These, and other examples, show the appetite in this, so we need to do more to make it easier for developers, landlords and hotel operators alike.
Without the need for huge investments, repurposing these buildings could mean a new and attractive business model for landlords and customers alike. Private companies could be allowed to manage these properties at no additional cost, generating profit on the promise of providing affordable housing conditions to new tenants or new budget hotel alternatives for travellers.
As old unused buildings become detrimental to efficient government planning, new opportunities can arise for the already resilient property market. Drawing from past experience, councils are keen on exploring different financial options. From leasing arrangements to government-backed property investments
As well as bringing financial success, investment in empty council buildings could avoid the greater environmental impact of new constructions. A more strategic and efficient use of resources could help build strong and thriving communities, providing better common areas to neighbourhoods and improving access to sports, entertainment, culture, and education.
More than ever, the sector is looking to go beyond the business of construction. Property development should be environmentally responsible, socially equitable, and economically viable. Developers must consider the needs of the surrounding community and ensure that growth does not cause displacement or contributes to social unrest.
By prioritizing sustainable practices, developers can adapt these properties to make them more attractive to consumers and fitting with government strategies. This can result in higher property values and increased demand, leading to a more resilient and sustainable property market in the long term.
Now is a good a time as any to lean into new opportunities, as the hotel industry continues to find ways to overcome the many challenges it faces. No doubt this is a win-win situation for all, as developers find practical solutions and embrace trends that encourage responsible and sustainable growth in the industry.
