In a market where competition is high in securing mainstream development sites developers are looking more and more to the opportunities and value they can unlock outside these areas.
Brownfield sites are attracting an increasing amount of attention and if redeveloped well, often find good fit with changing land uses evolving from a number of trends shaping how we want to own property and where we want to live. This is coupled with government targets to build new homes and the shortage of greenfield development land to do this. However, there are particular challenges for investors and funders financing these schemes.
What is brownfield land?
Brownfield land is land that has previously been developed and is quite often industrial or commercial land that is now derelict or underutilised. It is a symptom of how our cities and towns change over time as societies needs and industries change. In the past it has often been easier to develop greenfield land (particularly when developing for a sensitive end use such as housing – i.e. a use where there is a higher likelihood of people coming into contact with any contamination). However, with ever growing pressure on greenfield land and changes in consumer requirements in terms of housing, brownfield sites can pose a real opportunity to those prepared to roll up their sleeves and tackle certain issues.
What are the advantages of brownfield land?
- Often nearer to the centre of cities and towns.
- Industrial land is usually near good infrastructure connections and transport links.
- Likely to be surrounded by fewer residents so lower risk of complaints during the planning process.
- A desire by councils and communities for derelict land to be utilised and redeveloped.
- Sites being suitable for high density redevelopment because previous uses have often also been high density.
What are our changing housing needs?
- Shortage of high quality buy to rent property in the UK.
- Shortage of effective senior living complexes in the UK (with increasing demand).
- Higher proportion of young people attending universities and colleges – it is attractive for students for student accommodation to have good accessibility to city and town centres.
- Growth of the private rental sector which thrives next to good transport links.
- Statistics showing that the age that people buy residential property is being pushed back significantly lead by funding issues but adding to a generational trend of younger people being less inclined to take on the liability of home owning.
- The growth of uber, zip cars and other business that make it possible to be “car less”.
- Increased demand for ancillary amenities within developments such as shared space, cafes, gyms as being a priority over maximising the size of private living space.