Circa London Guide to Investing in Warehouse Conversions

Published: 21/02/2023

If you're looking for a unique investment opportunity in London, a warehouse conversion might be the thing. These characterful properties combine the history of old industrial buildings with the contemporary appeal of an open-plan interior, making them a tempting prospect for investors.

What Is a Warehouse Conversion?
Converted warehouses are buildings once used for industrial purposes but have been repurposed as living spaces. Many of these buildings are located along the Thames, where they were once used to store goods shipped to the UK worldwide. They came to prominence in the 1980s with the rise of loft living and have been popular with creatives, investors, and renters ever since.

Where Can You Find Converted Warehouses?
SE1 on the 
south bank of the River Thames is known for its Victorian industrial past is a great place to start. Converted warehouses can be found in the Bermondsey neighbourhoods of Shad Thames and Tower Bridge and around inlets like Butler's Wharf and Tea Trade Wharf. Some popular buildings include Tamarind Court, the Cardamom Building, and the Jam Factory.

Advantages of Warehouse Conversions for Investors
There are several advantages to investing in a warehouse conversion. Firstly, they offer a unique combination of old and new, making them attractive to renters. They also tend to be spacious and centrally located, with the heart of the city within proximity. Another advantage is their relative scarcity – there are only a limited number of period industrial properties in London, which makes warehouse conversions even more valuable.

Disadvantages of Warehouse Conversions for Investors
There are some downsides to investing in a warehouse conversion, too. For one, many of these buildings are Grade II listed, which can make any improvements or changes complex. They can also be costly to heat, given their larger size. When considering a warehouse conversion as an investment, it's essential to consider the potential renters and location carefully, as these factors will significantly impact your return on investment.

What Are Warehouse Renters Looking For?
Potential renters of warehouse conversions are drawn to the unique history and character of the buildings, as well as their relatively spacious interiors and desirable locations. They often look for something slightly unconventional or individual, with value features like open-plan layouts and large windows that maximise natural light. Single-storey living is also a popular feature of many converted warehouses.

How to Work Out the Return on Investment for a Warehouse Conversion
Before investing in a warehouse conversion, carefully considering the costs and potential return on investment is essential. This includes researching the sale price and monthly rent of similar properties and factoring in additional costs like legal fees, stamp duty, and maintenance. You'll also need to consider taxes and any regular charges or monthly payments, which can impact your return. Working with a knowledgeable real estate agent who specialises in warehouse conversions can help you locate the right property and make an informed investment decision.

Investing in a warehouse conversion can be a unique and exciting opportunity for investors. By carefully considering the advantages and disadvantages, as well as the needs and wants of potential renters, you can decide whether this type of investment is right for you.

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