In our quest for the future Reef in Brussels, @mariacoenen and I were advised to go talk to Miss Miyagi Placemaking in Leuven. All in all, we think we could use them as consultants, especially in the phase where we go from seeing a building to having a complete breakdown of legal options and spreadsheets with projected costs and revenues. Here are my notes from the meeting.
In Belgium the real estate market is divided into two. Private market, as always. But then there are real estate developers, who buy, develop and sell at a markup. In other countries (but not in Belgium) there is a third way: take development back to the people. This third way is where Miss Miyagi positions itself.
They are based in the old Stella Artois brewery in Leuven. Production stopped in the 1980s. After ofer 20 years, 7 people in Leuven had a company and needed a space. They were directed to the company who owned this building. It had been empty for 25 years, because no developer could figure out a sustainable business model to develop it.
They ended up buying the building on the cheap. Next, they asked a resourceful architect to develop the building on their needs. He then proposed to involve other people with businesses that needed space. The idea was to get rid of the figure of the traditional real estate developer, who focuses on building, pockets 15-30% (more 30% in Brussels) and disappears.
Miss Miyagi supports private people that want to develop buildings. They run nine months long processes. Three months preparation, including need assessment and a market survey around the building. They take a fee on every step of the process. They never invest in the land or in the building, so they do not risk. This method also supports owners with "unsellable" buildings. They only worked in Flanders for now: the legal system in BXL and Wallonia is different. Now they have our first assignment in Brussels, and are eager to work more there. They might be willing to agree to more advantageous conditions for us, as we help them to enter the Brussels market. "In cities, we know, you have to go to a high level to get things moving. As we are not "greedy developers", doors always open for us."
We no longer design buildings. This is because we want to be on the user side in the interaction between user, architect and constructor. With one of our clients, called Symbiosis, we ran a competition for architectural concept (NDA Good idea to do with Climate-KIC).
We have a building in Leuven that looks like what you want to do. Industrial building, formerly a factory of canned fruit. Behind it there is a a smaller building, unsellable because the factory is unused and dilapidated. The owner of the smaller building came to us for help. We proposed an expansion from 600 to 2,500 sqm. Ground and first floor are going to be ateliers, garage-sized, for small tech outfits. Above then, five classic apartments.
The process looks like this: an owner comes to us with a building, always a very complicated history. Initially, we do a nine month batch. We talk to regulators to find out what is possible. We work out three scenarios: each one is legally possible (actually comes with pre-consent), and comes with calculations. If the scenario includes 50 sqm ateliers, we know exactly how much this is going to cost. This is divided into seven steps, and you can exit at any one of them if you think it's not going to lead to a solution you want. Overall it costs 12K EUR. The seller of the building pays for it.
Then, when it goes to market, we take 3% from the buyer (not the seller). We are real estate agents, we are licensed for that.
They already work with cities in Flanders. There are two formulas:
- Concessions, from 30 to 99 years. You pay for it: the amount is the capital value of the building, distributed over the duration of the concession, with a very low interest rate (1-2%).
- Temporary allocation + option (done in Leuven). You take over a large area for five years, and make it into a safer, more attractive place. At the end of the period, you have an option to buy (or get a concession for) part of the surface.