Repositioning existing buildings to meet modern demands can unlock strong financial returns while creating long-term value for communities, writes Ludo Mackenzie, co-head of real estate debt, Octopus Investments
LGC’s recent roundtable, held in association with Octopus, reinforced a fundamental truth: some of the most compelling investment opportunities lie in overlooked places.
Across the UK, underused buildings in regeneration areas represent untapped potential. With the right approach – through repositioning, refurbishment, or redevelopment – these assets can deliver strong risk-adjusted returns while contributing to economic and social revitalisation.
Local authorities rightly hold the primary responsibility for regeneration and placemaking. Their vision, planning frameworks, and policy levers are crucial in shaping vibrant, future-proofed urban spaces.
However, the private sector has a significant role in making regeneration happen on the ground – from individual building transformations to large-scale mixed-use developments. Investors and developers who engage proactively can unlock strong financial returns while creating sustainable, long-term value in the communities they serve.
Productive finance enables economic gains and positive social impact
At Octopus, we see particular value in repositioning existing buildings to meet modern demands. Many disused commercial and industrial spaces could be reimagined as much-needed residential developments, flexible workspaces, or community hubs. Such projects not only reduce the environmental impact associated with demolition and new-build construction but also help reinvigorate struggling high streets and urban centres.
The economic case for investing in regeneration areas is compelling. As local infrastructure, amenities, and transport links improve, property values rise, delivering attractive returns for those who invest early. A patient, long-term approach helps investors manage risk while benefiting from rising demand in well-executed regeneration projects.
This is where the concept of ‘productive finance’ comes in. In a market often driven by short-term returns, there is an urgent need for capital that prioritises sustainable, long-term value creation.
Regeneration projects are inherently long-term, requiring investors to look beyond immediate returns and focus on value creation over time. By channelling capital into underutilised assets and supporting local growth, productive finance enables economic gains and positive social impact.
Of course, successful regeneration requires a collaborative approach. While public sector leadership is essential, the private sector brings the agility, capital, and expertise to drive meaningful change. Developers and investors can work in partnership with local authorities to deliver schemes that align with policy objectives, meet community needs, and enhance the built environment.
Guests at an LGC roundtable, held in association with Octopus, discussed how the LGPS could invest more locally
A key factor for success is understanding local demand and ensuring that regeneration projects are not just financially viable but also socially and environmentally sustainable. Mixed-use developments that combine housing, retail, office, and leisure spaces can create dynamic, liveable neighbourhoods. It also means ensuring that developments are future-proofed, incorporating sustainable building practices and energy-efficient technologies to support the UK’s net-zero ambitions.
The opportunity in regeneration is clear. By taking a proactive approach to repositioning, refurbishment, and redevelopment, investors can generate strong returns while shaping thriving, resilient communities.
At Octopus, we see this as more than just a financial opportunity – it’s a chance to drive meaningful change in the built environment, benefiting investors, local communities, and the wider economy alike.
Ludo Mackenzie, co-head of real estate debt, Octopus Investments
