Market potential assessment | Concept developmentMarket & financial feasibility study | Operator search | Funding

BRINGING LIFE & NEW INVESTMENT TO CHALLENGED ASSETS

REPURPOSING RETAIL

FOR HOTELS

HOTELS & RESORTS CONSULTING

We’re transforming redundant space

Hotels have been the fastest to capitalise on the repurposing of retail opportunity and Colliers is leading the way.

We have already explored more than 15 opportunities and are helping to bring more than 2,500 rooms to the market in previous retail properties.

Solutions that have worked so far in different situations include:

• Adaption of the existing building for a hotel

• Use of redundant upper floors with retail retained at ground

• Downsizing the retail floorplate and use of the freed up space

• Complete site redevelopment

Here are some of the key brands formerly occupying properties who are involved.

Will a hotel work?

In the right location, redeveloping retail as a hotel can work well.

• New concepts allow for compact room sizes, which help deliver the needed critical mass of total rooms to achieve viability.

• The multitude of brands and their varying product offerings mean a good fit can be found for the market and building. Some hotels even have rooms without windows now.

There are critical success factors that must be explored however. These include:

LOCATION Strength of the location in terms of access, market demand and competition.

BUILDING CONVERTIBILITY Certain floor plates, ceiling, heights and

window spacings work better than others, and redevelopment costs can damage viability.

POLICY RESTRICTIONS If several parties have an interest in the role and operation of the asset this can add complexity, and onerous planning restrictions can be a challenge.

Realising a new future

We assist clients from the earliest stages of concept development and market and financial feasibility, through operator negotiations and funding, to hospitality asset management or exit strategies.

Objectives & site potential

Market research & implications

Mix & quantum recommendation

Detailed projections & development appraisal

Concept options & high level financials

Iterative enhancement

Business plan

Funding Valuation Asset management

Opportunities Viability Delivery In operation

Commitment of operators

Case studies of repurposing retail for hotels

Former House of Fraser, Lincoln - New building• An opportunity was identified for a scheme with reduced retail

floorspace and alternative hotel use of the surplus space.• We advised on the best solution and undertook a feasibility study

and operator search. • A 150-bedroom focused service hotel is proposed for the site.

Former BHS, Stratford-upon-Avon - Adaptation• This 72,000 sq. ft. store closed in 2016 and had remained empty.• A 170-bedroom hotel and separate restaurant and bar unit is

proposed.• We provided feasibility analysis and have secured a forward funded

hotel management agreement.

Boots, Windsor - Retail downsizing• With Boots looking to reduce their commitment in this building in the

heart of Windsor, there is potential for alternative hotel use for freed up space, whilst retaining the Boots retail frontage for a smaller unit.

• There is potential for a 101-key hotel adjacent and south of the retail unit.• We were asked to obtain and negotiate a hotel operator on a

lease basis.

Former Argos, Chester - Rebuild

• This 23,800 sq. ft. store laid empty after Argos Extra vacated the property in late 2017.

• Our services included feasibility analysis, hotel operator search and leasehold negotiations, and attracting an investor to secure either full funding or a forward sale of the proposed hotel.

• Subject to planning, the property will be developed into a 138-bedroom ARK Hotel and leased by Bespoke Hotels.

Former Department Store, Plymouth - Adaptation

• Former Derry’s Department Store on Royal Parade remained vacant since its closure in 2010.

• We identified part of the building as suitable for hotel conversion to fit alongsied student residential and retail at ground. We undertook hotel feasibility analysis and helped secure Premier Inn as tenant.

• The 110-bedroom hotel due to open in early summer 2020.

River Island, Liverpool - Use for upper floors

• We were commissioned to explore potential use of the upper floors above the River Island retail unit.

• There is potential for a 136-key hotel or 76-key aparthotel.• We are commissioned to provide a tenant search and negotiation

service.

We’re trusted partners

Colliers International has been working with some of the biggest names in real estate to transform their assets and future-proof investments.

And here’s why• We’ve done it before - We’ve looked at several retail schemes with potential to be hotels. Experience

has taught us which types of buildings convert well and which don’t.

• We know the pitfalls - We know the challenges that these types of projects are up against and how to overcome them.

• We know where’s hot - We know the markets: where’s hot for new hotels, and where’s not. We see through the smoke and mirrors of other potential new supply.

• We find the right operator - We are up to date with which operators are interested in these opportunities, and when a management agreement is needed or a lease can be negotiated.

• We get you to the right exit - We help our clients along the journey to their desired stage of exit. This can be pre-planning, at planning, pre-development, post development or after a period of hold.

• We can find investors - We have strong links with investment funds and are able to assist when such an exit is desired.

Colliers International is a leader in global real estate services offering a complete range of services to real estate owners, developers, investors and occupiers on a local, regional, national and international basis.

We are focused on accelerating the success of our clients and are known for our spirit of enterprise and passion for service excellence.

Our Hotels & Resorts Consulting team is part of a team of 40+ dedicated hotel professionals in Consulting, Valuation, Investment, Agency and Asset Management. We also work with our local offices across the UK and EMEA.

Contact us

Marc FinneyHead of Hotels & Resorts Consultingmarc.finney@colliers.com+44 7825 602797

Lloyd Entwistle Director | Retail Agency & Development lloyd.entwistle@colliers.com+44 7977 998826