When applying the idea of recycling to old or underused buildings, it is not just a matter of reusing the structure or materials, but also of best use, said speakers at ULI Europe’s annual conference in Paris.
“It’s about up-cycling our old buildings,” said Laura Muller, head of corporate social responsibility for Corio N.V., a European retail property investor, developer, and operator based in the Netherlands, who led the discussion. “Improving buildings and places can increase productivity and well-being. Real estate is a means to an end rather than an end in itself.”
Xavier Denis, chief operating officer of Belgian real estate investment trust Cofinimmo, used the Livingstone project in Brussels as an example. Cofinimmo owned an 183,000-square-foot (17,000 sq m) office building dating from the 1970s that had been vacated by a tenant, Denis said. Facing rising supply and falling demand, as well as changing occupant requirements in the Brussels office market, Cofinimmo reviewed its options for the building—whether it should be sold or redeveloped; if it were retained, whether refurbishment or reconstruction would be the best approach; and whether office space would be the most suitable use.
Cofinimmo decided to convert the structure into an apartment building, with the objective of selling the redeveloped asset. The business case for the conversion was underpinned by the city’s demographics, which included 19 percent population growth since 2000, and a housing shortage that required 5,000 homes to be built each year. The three reasons Denis said they decided to choose residential: “Demographics, demand, and liquidity.”
The residential plan at Livingstone consists of 122 apartments and four retail spaces and employs the existing structure of the office block, adding a new, contemporary facade. Thirty percent of the apartments were sold before the start of construction, which has now begun. Denis said he does not see the recycling of old buildings as an investment opportunity for Cofinimmo in its own right, but rather as an asset-management technique for recovering value from underperforming or obsolete assets.
William Sebring, an architect with Altoon Partners in the Netherlands, further developed the business case for recycling old buildings, providing views and strategies for what he described as “unlocking the hidden value.” Focusing on retail-led developments, he reviewed the core, fundamental requirements of a recycling opportunity, including whether the asset has established itself as a destination, the consumer and wider community’s view of the building and developer, strong or improving area demographics, upside potential, and the need for an experienced local partner. Sebring also examined options for recycling—ranging from cosmetic remodeling to radical transformation—before examining how retail developments could become the “urban heart” of a community and city.
For Allessandro Cajrati Crivelli, founder of Estate Four, an international developer that has undertaken developments in Milan, London, New York, and Los Angeles, recycling buildings is a matter of vision. Rather than focusing on location, Crivelli is far more motivated by the individual potential of buildings. Large spaces, generous ceiling heights, and interesting features are all core to the company’s approach of developing dynamic environments and inspiring spaces that appeal to creative occupiers such as fashion, graphic design, and media businesses.
Crivelli frequently takes on projects in fringe locations that result in urban regeneration and the establishment of new creative quarters. He was the driving force behind the regeneration of 3.5 million square feet (325,000 sq m) of former industrial buildings on the western edge of the Milan city center into what is now the Zona Tortona, one of the largest fashion districts in the world. His approach has since proved successful in other major cities, such as New York City, London, and Los Angeles.
For Crivelli, the innovative occupier–led approach, which focuses on the user experience, is a personal process. “It is the people that make the buildings,” he said. “We do not use property agents for this very reason. Can an agent talk to Giorgio Armani? Not in a million years.”
An alternative perspective on the recycling concept was put forward by Julissa López-Hoyodán, a senior urban designer/planner at Gensler and a member of a ULI’s Young Leaders Group. Around the world, old shipping containers are being recycled to create new structures with a wide variety of uses, she pointed out. From elementary schools in Mexico and information kiosks in New Zealand to boutique hotels in Germany and student housing in the Netherlands, the ways in which these strong modular units can be configured and used seems endless. The opportunity is to “think outside of the box, with the box,” López-Hoyodán concluded.