Brownfield – What does the future hold?

Our team: Gavin Whitney

Through a series of thought leadership and analysis articles, we have discussed issues and opportunities associated with brownfield site development. Examining areas of importance, we have taken a closer look at historical title issues, mitigating risk and dealing with contamination, considerations of planning and obtaining funding. More recently, we have looked at possible uses for brownfield sites, namely hotels and housing.

In this article, we look to the future and try to predict which current property uses could become redundant as the face and make-up of towns and cities evolve.  Such redundant sites will end up as brownfield land and need to be redeveloped.  Are there steps that can be taken now, based on what we have learned from current brownfield redevelopment, that will make future redevelopment easier?

Factors affecting property use

According to the Loan Market Association (LMA)[1], there are four principal factors which will affect future property use:

  1. Climate change/environment issues;
  2. Technology;
  3. Health and wellbeing considerations;
  4. Social change.

Environmental issues are at the forefront of many people’s minds. At first glance, with rising sea levels, greater consideration needs to be given to building on floodplains thus making development of greenfield sites more tricky and expensive, whereas urban brownfield sites which have less risk or no history of flooding are perhaps a safer option.  On the flip side, many older commercial developments were not built with environmental factors at their heart and so the risk of them becoming defunct as they age further increases.   Also, there is a drive towards having greater microgeneration of power near to communities and so power stations and substations in towns and cities will not be needed.

Technology advancements are making it easier to work and/or engage in commercial activities no matter a person’s location and thus the need for hubs for these activities to take place is less, or at least the requirements for the same are quite different. As the cost of motoring increases and there is a move away from cars towards public transport, this makes sites on existing transport networks more attractive.  In addition, car parking facilities are required less thus freeing up space for other uses.

With an aging population, there is a need to find suitable accommodation to house and care for people as they get older whilst still keeping them in an established community environment, near to where they have lived independently.  The decreasing size of households pushes up demand for smaller, more flexible living spaces and therefore large housing estates aren’t necessarily the abode of choice for a large number of people.

A growing population worldwide and a trend of increasing urbanisation is set to continue for many decades in the UK. With a shortage of housing, there is an opportunity in the property market to leverage on these demographic changes in delivering schemes that cater to society’s changing needs and achieve this by reusing redundant space.

Where can new sites come from?  

If the above factors are likely to lead to a greater demand for urban spaces that are already well-connected and part of existing communities, we will need to find increasing numbers of locations…

Evidence suggests that, not surprisingly, retail locations are likely to decrease significantly in the future, particularly those of the “big box” variety. Online giants have had a huge impact on the high street as online shopping makes the need to visit a physical space less necessary, except perhaps to collect or return items.  Does this also mean that a mainstay of the typical UK town – the shopping centre – will no longer be needed?  A recent poll held by LMA suggested that pop-up retail may also help fill gaps.

What about warehousing and distribution?  Whilst “super” distribution hubs are undoubtedly the future, the demand for smaller industrial/light industrial units is likely to reduce online sales, leading to a need to be repurposed.

What does the future of the casual dining market look like?  There have been a lot of recent high profile failures but, overall, the leisure market remains strong and demand for new and interesting places to visit remains high.  It would not appear to be the case that leisure sites will become future brownfield redevelopment opportunities.  In fact, many retail-led schemes are looking to re-position themselves with a greater leisure focus, with competitive socialising and “experiential” offerings to entice consumers.

Some developers and investors with longer term views are taking a different approach altogether.  According to Bisnow[2], the Abu Dhabi Investment Authority (ADIA) is planning on ‘transforming two tired shopping centres in Slough into a new mixed use scheme’ that will transform the town centre over the next few years, very similar to the Grosvenor development of Liverpool One.

It perhaps is the case that the future of brownfield sites can be anywhere and anything?  Perhaps it is unrealistic to keep a site in the same use for long periods of time and therefore it is inevitable that, as humans and society change, so does our need for use of buildings.

The future

Now, if our conclusion above is correct as to the future brownfield sites, what steps can be taken with current developments to try to “future-proof” them?  One approach would be to do as ADIA and Grosvenor are doing and take a bigger slice of town centres, look to the longer term, and be mindful of the need to constantly reinvent, remodel and repurpose.

Not every property investor or developer has the resources to buy large parts of urban centres or a desire to work over such timescales.  For them, the key is to build in flexibility to all of their developments.  This might be by allowing for carving up of ground floor space in different ways or providing for additional floors or other massing to be added easily, but utilising innovative design solutions is crucial.  In terms of the issues we have identified with development of brownfield, it might mean being more selective about the sites acquired so that title issues which limit use are rejected in favour of those without such restrictions but where construction is a little trickier or more costly.

In summary, it will be necessary for owners, surveyors, architects, lawyers and other property professionals to work together and look not just at the “here and now” whenever they are dealing with a new property asset, but also be mindful of the future and the changes that could be required.  When doing this, undoubtedly, our current experiences of the evolution in land use and redevelopment of brownfield will assist and guide us going forward.

[1] Emerging Trends in Real Estate 2019 (Erik Sonden, Senior Advisor, DTZ Investors)

[2] 5 February 2019, Mike Phillips (author)

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