Commercial property owners are finding innovative ways to use vacancies
Thinking out of the box is a concept increasingly being used in the commercial real estate market, where both landlords and property developers are challenging rising vacancies and creating unique offerings to attract more users.
This creativity is leading the evolution of commercial property space where owners create new opportunities to fill their properties with people- and revenue-attracting features, and investors and developers rethink the way they design spaces, to drive the 4th Industrial Revolution – the name for the current and developing environment in which disruptive technologies and trends are changing the way people live and work.
In the US, pop-up retail stores and entertainment or themed attractions are just two of the creative ways commercial property owners globally are making use of vacant space.
After all, the good news about tough economic times is that they breed ingenuity, says Ellen Berkowitz, a partner at law firm Manatt, Phelps & Phillips.
Writing for the CCIM Institute – which is made up of leading expert members in commercial investment real estate – she says landlords are also thinking short term instead of long term.
Pop-up retail venues, theme parks, entertainment centres, children’s play areas and other “people-intensive” activities, are just some of the attractions filling vacant commercial property spaces in the US.
“Pop-up retail is a trend catching on across the country because it helps anxious landlords fill spaces that have sat empty for months. “It also provides retailers with a way to create a store with little overhead. These transactions usually have simple leases and do not include profit sharing…”
Berkowitz says family entertainment or themed attractions are another idea for large, vacant retail buildings while, for vacant land, creative use options include farmers’ markets, urban gardens and parking and vehicle storage.
In South Africa, property developers and investors are driving the 4th Industrial Revolution by taking the value chain multidisciplinary approach, says Slaven Gajovic, chief executive and founder of the Maximum Group.
“We integrate different industries into a property development ecosystem with the circular economy and economic symbiosis in mind.” The group’s Protea City Mega Project – an agri-processing hub, industrial park, logistics centre and fresh produce market at the southern entrance to Soweto, is one example of this, he says.
The development will provide these facilities while also using the latest renewable energies and hi-tech, he adds. Another example of creative land use is the 180 Lounger venue on the roof of The Terraces building in Bree Street.
Opened last year by French-born entrepreneur Christian Halm, 180 Lounger is a leisure and work environment that combines outdoor and indoor space and aims to attract locals working in the CBD and visitors.
Halm says: “There is the 180 Rooftop Connect experience aimed specifically at travellers, the 180 Rooftop Venue experience aimed at hosting a variety of events and the 180 Rooftop Chill experience which happens on Thursday nights.”
180 Lounger, he adds, is a multi-purpose space appropriate for a variety of uses. This too is indicative of the global trend where mixed-use spaces are increasingly replacing traditional commercial uses.