Office-to-residential conversion funded by splitting and selling the ground floors
Sector
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Developments
Deal type
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Repositioning
Location
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Birmingham, Jewellery Quarter fringe
In this record
Rents on the wrong side of Birmingham's inner ring road run at roughly half those inside it. That is usually described as a weakness.
Ten storeys of office accommodation, with a gym on the lower ground floor, sitting just outside the ring road on the way towards the Jewellery Quarter. Being outside the ring road was the reason the building was affordable, and the rent differential gave us a genuine cost argument to take to an occupier rather than a discount to simply absorb.
There was more to it than the floor space. The building had good floor plates, it was visible from the ring road, and a substantial advertising hoarding on the flank generated real income on its own. The roof could carry aerials. None of that shows up in a yield calculation, but all of it is money.
The problem was age. In a building of that period, the floor-to-ceiling heights leave nowhere for cabling to run. You cannot raise the floor and you cannot drop the ceiling, so there is no route for the conduiting a modern occupier expects. Most buyers look at that, conclude the building cannot be serviced properly, and price the limitation in as permanent. It is the single reason a building like this sits unloved.
We took a different view, and took it to structural engineers and architects rather than assuming. The answer was to core drill through the beams themselves, creating pathways for cabling to pass through the structure without compromising its integrity. It sounds like a small thing. It was the difference between an old office block and a connected one, and it let us deliver sleek finishes through the ceilings and floors with proper servicing behind them.
Funding came out of the building rather than out of our pocket. The lower ground and ground floors were a bitty, awkward arrangement, so we compartmentalised them into a separate legal title, created a long leasehold interest over that part and sold it on at a yield. That released the working capital for the conversion of everything above. The building paid for its own improvement.
Underneath all of it sat the same reassurance we look for everywhere. The location worked as residential if it ever needed to, which put a floor under the capital. At the time there was no automatic right to convert offices into residential accommodation - that came into planning law later.
Canterbury House is now residential apartments.
The constraint everybody else treats as permanent is usually the cheapest thing in the building to fix, provided you ask someone qualified rather than assuming the answer.
Speak to our team
The limitation everyone treats as permanent is often the cheapest thing to fix, and the right structure can make a building fund its own conversion. If you are weighing an office block, a conversion or a stranded asset, we would welcome a conversation.
Key insights
Real estate sits alongside equities, private equity and fixed income in most family office portfolios – but it behaves differently to all of them, and that's exactly why it earns its place.
Real estate is one of the core asset classes in most family office portfolios, alongside public equities, private equity, fixed income and increasingly private credit. Family office asset allocation to real estate has grown in recent years, driven by its long-term yield, its role as a diversifier against public markets, and its suitability for multi-generational holding periods that few other asset classes match.
Family offices typically hold a mix of private equity and direct investments, real estate, public equities, fixed income and alternative investments, with the exact split varying by size, generational stage and risk appetite. Real estate tends to justify its place in that mix for reasons other asset classes don't share: a steady, long-term income yield; a long holding horizon that matches how families think about multi-generational wealth; and enough direct control that a family can shape an asset's performance rather than simply hold a position and wait.
Once real estate earns its place in the allocation, there's a separate question of how to access it – directly, or through a fund or REIT structure. That decision affects fees, control and liquidity in more depth than an allocation discussion needs to cover; the trade-offs are set out in full in our guide to financial planning for property investment. What matters at the allocation level is simpler: direct ownership is what lets a family actively shape a property's performance rather than passively hold a position in it, which is a large part of why real estate earns a place in the portfolio in the first place.
Discovery Park in Kent is a clear illustration of what that control can achieve. Brought under active management, the science park's capital value grew from around £20m to more than £75m over two years – restructuring leases and separating out service charges rather than simply holding the asset and waiting. A passive fund position, with no say over how the asset is run, couldn't have delivered the same outcome.
UK real estate remains a core allocation, but the mix within it is shifting. Portfolios are diversifying into student accommodation, retail parks and leisure assets alongside the more traditional office and residential holdings, and branded hotel and hospitality assets remain in favour where they carry a strong covenant. Family offices weighing new allocations are also factoring in wider considerations earlier than before – joint venture and asset management arrangements, transparency requirements such as the Land Registry's Persons of Significant Control and Overseas Entities registers, and planning and tax implications specific to the deal.
Maritime Capital's own track record reflects the same pattern of diversification: self-storage and leisure conversions such as Storage Box in Hersham, branded hospitality including The Forbury Hotel in Reading and Raithwaite Sandsend in Yorkshire, and retail assets alongside the more familiar office and residential holdings. The common thread isn't the sector – it's a covenant and a business model resilient enough to justify the allocation in the first place.
Few asset classes hold up as well across multiple generations as real estate. A well-managed property can be improved, repositioned and passed down without a fixed exit forced by a fund's term, which matters to families thinking in decades rather than years. That said, realising the benefit depends on active management – a passively held property doesn't generate the same value as one where lease strategy, service charge control and repositioning decisions are being made deliberately.
Hungerford Park shows what that looks like over a genuinely long horizon. Acquired in 2005 as a 300-acre estate, it's been built over two decades into a working farm, a holiday-let business and an events venue – the kind of layered, multi-generational value creation that a fund's fixed term could never accommodate, and that only comes from treating the asset as a long-term project rather than a static holding.
Most family offices don't carry deep in-house real estate expertise alongside their wider investment team, which is why property is often the asset class most commonly brought in through a specialist partner rather than managed entirely in-house. Maritime Capital works alongside family offices and their existing advisers – wealth managers, investment managers and private banks – on the UK commercial property portion of the portfolio specifically, from acquisition through to ongoing asset and property management.
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