The story of the 'Recycled Property'

The story of the 'Recycled Property'

Millennials are changing this world faster than we can imagine. This generation’s needs are inspiring and hence there is a strong opportunity for the collaboration of research and technology. We find that as buildings age, there is no need to dispose of them; rather, there is an opportunity to investigate repurposing them. Our research shows that many properties are being repurposed and reconfigured to suit a better and more efficient modern use, whether this is for co-working, co-living, new-age micro-hotels, co-industrial spaces, new warehousing formats. What is clear from our research is that in repurposing older properties, they become even more economically feasible.

If you own property and before you plan to redevelop it, conduct a comprehensive Due Diligence & Benchmarking assessment in order to best understand the alternative uses of the property available presently owing to market needs, applicable regulations and the physical structure of the existing property. Be aware that properties located in the CBD and in central areas of the city have a higher requirement for compliance and hence due diligence, owing in part to rising property values and to the City Authorities modernization of building norms.

You can engage us to complete this assessment in three stages:

  • Market Analysis: Identify possible ‘highest and best’ uses for the property. Investigate traditional uses and emerging uses.
  • Property Assessment: Understand current property – structure, building services, applicable regulations
  • Cost- Benefit Analysis: Review the economic benefit of the repurposing and redevelopment, applying current building costs and market related rentals

We have found that the rental yields of commercial properties decline as properties age, drastically falling after 20 years and the curve is steepest still beyond 40 years. The reason for this fundamental shift in value is that whilst functional needs have changed, technology and market needs have improved and changed.

Our research shows that the repurposing and redevelopment of an older property asset arrests its inherent decline and improves the investment nature of the property.

To understand why and how, please be in touch with us

About the Author

Gorakh Jhunjhunwala, MRICS

Gorakh Jhunjhunwala, MRICS

Gorakh spearheads Meraqi's overall operations, direction, strategy and growth.

He is a veteran real estate professional and has multidisciplinary experience across advisory, valuations, capital markets and investment management. He has advised over 50 clients on numerous consulting assignments and executed investment transactions valued at USD 100 million.

Gorakh holds a B. Arch from RVCE, Bangalore and M. Tech from IIT Delhi. Prior to founding Meraqi, he has spent over 15 years in key roles with leading multi-national real estate service providers.