Significant changes in technology, workplace practices and production requirements have all resulted in an increasing number of commercial and industrial buildings in South Africa becoming obsolete, says Nedbank Corporate and Investment Banking (NCIB) regional executive Ken Reynolds.

“The result of this is that more and more developers and building owners are realising the massive redevelopment potential of these structures and are engaging in projects to bring them in line with current market requirements,” he notes.

Furthermore, Reynolds adds that there are a number of factors that contribute to buildings becoming obsolete. These include an increased reliance on information technology in the workplace that has made it critical that buildings are equipped to deliver the latest in technology requirements.

Another trend in modern-day businesses that may put buildings into a state of obsolescence involves the shift from closed to open-plan work spaces. In the past, an average office building would have allocated up to 30 m² for each staff member. With the move to open plan workplaces, this allocation has reduced to 10 m² for each staff member.

“Obsolete buildings are not limited to office space but are also in the industrial building segments, as structures that are comprised of harmful materials and low clearances have become undesirable,” he indicates.

Moreover, while redevelopment presents significant opportunities for developers and owners, Reynolds states that it is critical that they conduct thorough feasibility studies and market research before deciding what to do with an existing building that has become obsolete.

“In this regard, a key factor is understanding the demand for various types of properties in the area in which the building is situated. For example, due to the change in the nature of the demand in Braamfontein, Johannesburg, from commercial to residential, many office buildings in the area have been refurbished into residential accommodation,” he says.

With this in mind, Reynolds points out that the biggest mistake developers make is underestimating the problems that they are going to find once redevelopment starts. Owing to this, should the decision be to refurbish a building following a thorough feasibility study, additional contingency costs need to be factored in, especially for unforeseen challenges such as elevators that require replacement, and massive plumbing or electrical work that needs to be conducted.