The increased demand for (inner-city) housing and little supply has led to high pressure on the housing market in recent years. Given the scarcity of free buildable space in many city centres and the fact that the zoning plan is fixed for a period of 10 years, the possibilities for constructing new buildings are limited in many cases.
One of the trends in recent years has been the transformation of real estate. This includes the conversion of office, shop or business premises to another function, in most cases a residential function. If a transformation project fits within the zoning plan, it creates a number of opportunities, including less vacancy and a greater supply of housing. This article discusses the way in which we, the Van der Vorm Vastgoed Groep, create sustainable, relevant value by means of transformations within our real estate portfolio.
Transformation against vacancy
From offices and schools to industrial and social real estate, total vacancy in real estate in the Netherlands amounted to almost 30 million m² in 2018 (National Vacancy Monitor 2017 and 2018 - Dutch Central Bureau of Statistics, 2019). Some of the properties that make up this vacancy are no longer rented out for their original function and will no longer be so in the future. This is because, for example, the property does not meet the current requirements and wishes of the user or because the location of the property is not attractive enough. In that case, it concerns a prospectless vacancy. In contrast to this vacancy, there is an increasing demand for housing in a large number of cities. The transformation of (long-term) vacant property meets the growing demand for housing and reduces vacancy levels.
Transformation as part of sustainability
Nederland, tezamen met 194 andere landen, staat aan de vooravond van grote veranderingen: al tijdens de Klimaattop in Parijs in 2015 werd vastgesteld dat er ingrijpende aanpassingen nodig zijn op allerlei gebieden om de opwarming van de aarde in bepaalde mate te voorkomen. Ook werden tijdens dit topoverleg met alle deelnemende landen afspraken gemaakt die de toename in temperatuur in 2050 zouden beperken tot 2 graden, het liefst zelfs 1,5. Echter tijdens de Klimaattop 2018 in Katowice werd vastgesteld dat we met onze huidige CO2-uitstoot op weg zijn naar een opwarming van 3 graden in 2050. Willen we met z’n allen richting een duurzamere, leefbare wereld, dan dienen drastische maatregelen te worden getroffen. Transformaties kunnen hier een belangrijk aandeel in leveren als een duurzaam alternatief voor nieuwbouw, waarbij verspilling van grondstoffen en natuur zoveel mogelijk worden voorkomen.
Sustainable living through transformation
An outline of the current situation in the Netherlands with regard to the sustainability of our real estate:
7 million homes and 1 million buildings are inadequately insulated and the vast majority of this property is heated by natural gas. (Climate agreement Central Government, 2019) In the ideal situation, all these homes and buildings are well insulated and this property is heated with sustainable energy while using clean electricity or perhaps even generated. Transforming these properties is the most cost-effective way to move towards the ideal situation.
The transition from natural gas to natural gas-free and from poorly insulated to well-insulated has begun: by 2050, the Netherlands must be virtually climate-neutral in order to comply with the aforementioned Climate Agreement. In order to achieve this, the qualitative requirements of buildings such as homes, offices, shopping centres and commercial buildings must be tightened up. Reducing energy consumption and CO2 emissions are essential when it comes to achieving the objectives of the agreement.
The societal added value of successful transformation
Transformation projects can be of great added value to society. Transformations of shopping centres, for example, will be designed and carried out in such a way that the property will better meet its social function after renovation. In addition, transformation projects counteract vacancy and, therefore, a direct loss of value as a result of the lack of return on the capital invested in these buildings. It also counteracts the deterioration of both the objects and the surrounding environment (indirect loss of value), sometimes even resulting in a feeling of insecurity and dissatisfaction.
In order to meet the growing demand for housing in many cities, as well as the prevention of negative effects due to (long-term) vacancy, it is important to transform on the basis of the existing demand for real estate from a holistic approach. In this way, transformations are in line with the way in which future users want to live as well as the current changes in the world in terms of sustainability.
Opportunities for transformation projects increase
Because proven successful transformations show that shifting the function of the real estate contributes to solutions for various issues, the opportunities in the field of real estate transformations have increased significantly in recent years. This is partly due to the changing demand from the market and the changing attitude of municipalities and banks in relation to transformations.
Transformations in development
We are currently in the midst of the transformation of several properties in our portfolio. For example, a number of office buildings will be transformed into homes and several shopping centres will be revitalised, aimed at contemporary shopping comfort.
Delft Hoog, Delft
Delft, 1975: the third tallest building in the 'Prinsenstad', the Torenhove, is completed and used as an office building. The impressive tower, with a height of 83 metres and 22 floors, is located on the corner of the Papsouwselaan and Martinus Nijhofflaan, offering a view of the various neighbourhoods of Delft and its surrounding area.
In 2016, it was decided to transform the 1st to the 9th floors into high-end apartments for young professionals. On the upper floors, a number of significant names in Dutch business remained established, interspersed with various start-ups that managed to flourish from the tower. In 2018, we decided to transform the other floors into spacious, comfortable apartments. This is how 'Delft Hoog' came into being.
Toren van Oud, The Hague
The iconic 'Toren van Oud' (or 'Tower of Old') in The Hague Zorgvliet is known for its extraordinary shape: triangular shape. The almost 65 meter high tower, which was completed in 1969, is seen by many as the first skyscraper of the Hofstad. The hotel, designed by architect Johannes Pieter Oud, will be transformed into luxurious short-stay apartments and two penthouses with panoramic views of the surrounding area. Tenants in the Toren van Oud are provided with all modern conveniences: Do Company gastronomic services, a gym and parking space in the garage under the tower.
The transformation work has already begun. The installation of the new facade cladding is currently being finalised. The transformed tower is expected to be completed in Q3 of 2019. See link for more information.
Van der Vorm Vastgoed as an expert, reliable investor in transformations
Years of experience, thorough knowledge of the market and our typical Rotterdam no-nonsense mentality mean that we have been successfully shaping various transformation projects for decades. We invest in creating sustainable real estate with future-proof value. You can also follow the developments within our transformation projects on our social media channels.