According to research by Lambert Smith Hampton (LSH), more than 11m sq ft of office space has been earmarked for alternative use since the relaxation of planning rules nearly two years ago.
LSH’s Office Market Report for 2015 reveals that an area equivalent to all the office space in the town of Reading has been converted for alternate use as apartments and hotels since the introduction of Permitted Development Rights (PDR) legislation.
PDR, introduced in May 2013 to tackle the housing shortage, allows the conversion of office buildings into residential property without planning permission.
With PDR due to expire in May next year – following the government’s apparent climb-down over plans to extend the scheme – the report’s authors found that the amount of office space leaving the market accelerated last year with 6.8m sq ft allocated for conversion.
The report also shows that office take-up in 2014 was the highest since 2001, with 27.5m sq ft taken-up. At the same time availability fell by 4 per cent to 51.1m sq ft over the year.
LSH’s national head of office agency, Tony Fisher, said: “Unsurprisingly, London has been a focal point for projects to convert offices into other users, particularly outer London, where residential values dwarf those of offices.
“However, many regional markets have also seen substantial activity following the PDR- approximately 8m sq ft of office stock has left the market outside of Central London since May 2013.
“Bristol has been a major hotspot, with over 1m sq ft of office removed, while Slough, Watford and Hemel Hempstead have also all experienced a considerable net loss of space.
“We estimate that there is currently 9.4m sq ft of speculative development currently under way, which exceeds the loss of office space in 2014 by nearly 3m sq ft.
“However, a large proportion of office development involves either refurbishment of existing space or development on sites previously used for offices, so this figure overstates the amount of net new space”.
Mr Fisher goes on to say that the overall quantum of office space is in a gradual downward trend, and that it is vital that planning policy is exercised to protect office cores throughout the country.
Previous Post
Triple Contract win shows Construction Sector is gathering momentum says Howard Russell
