Repurposing spaces for alternative forms of revenue

What happens when you have to cough up rent on a commercial space you can’t even open? We dig into the companies who are turning their studios and shops into multifunctional spaces to rent out to others.
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From the London yoga studio that became a food bank to the testing facility in a closed Berlin nightclub and the art gallery near Turin that’s now a vaccination centre, businesses have been donating spare commercial property to community causes in recent months – all either for free or for a nominal charge.

Commercial property continues to be a major liability for businesses that have been forced to keep their doors shut. But some have turned their spaces into an alternative revenue source – by renting it out to other businesses. 

Pre-Covid, pop-up malls and marketplaces sprung up in major cities worldwide, offering space to small businesses in need of flexible, short-term leases. Multipurpose sites – like London’s Mercato Metropolitano or The Soda Plant in Vermont – have brought together companies across arts, culture and food and drink in a novel, experiential format.

Finding new corners 

Now, instead of relying on landlords and other companies to provide space, businesses are sharing and renting between themselves. Here's how some went about it. 

• Reimagining purpose. Vacant parking lots in Boston and Toronto have been licensed out to local businesses wanting to host outdoor markets. And empty hotels are getting in on the ghost kitchen action by renting their kitchens out to small food businesses.  

• Scaling down. In Nairobi, the rent-a-shelf model is gaining traction: digital vendors can lease shelves in established shops for the equivalent of $18 to $28 per month.  

• Micro-leasing. Businesses don’t always need space – sometimes they just need access to large-scale commercial equipment. Micro-leasing has taken off in Peru, allowing small businesses to rent equipment for short periods of time. 

Going multifunctional

Filling underused space is a win-win for everyone, including local authorities. But brands should only partner with others that complement their existing offering.

A number of space marketplaces have taken it upon themselves to facilitate that partnership. SpaceTogether has a slightly unconventional rental programme for churches, while Occupyd acts as a ‘matchmaking’ platform, aggregating flexible commercial spaces like kitchens, studios, salons and therapy rooms.

‘In downturns, there’s an uptick in startups and small businesses, so we saw our user base grow by 850% between 2019 and 2020,’ says Callum McPherson, Occupyd's founder. ‘Businesses are forward-planning their revenue now rather than just reacting to the situation, and it’s a no-brainer to most of them to sell their space.’

A version of this article was published in the Courier Weekly newsletter. For more useful stories, tips, tricks and simply good advice, sign up here.

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