EG LONDON THE CITYLONDON
BitterT
he City of London Corporation’s consent for the Candy brothers to convert former Tate & Lyle offices at Sugar Quay into flats, is bitter sweet to say the least. Despite enormous demand for the end product it is, reportedly, the last major City scheme that
will get consent. The Corporation is keen to squeeze
residential as it tries to avoid crushing the one thing that has made it its name: business. So is the Candys’ consent a sign the
City reluctantly accepts the need for housing on its patch? Or is it saying only a scheme fit for a One Hyde Park-style buyer is right in such an exclusive enclave? Certainly, the Corporation puts on a
convincing show of disliking both complete new-build and residential conversions from offices. Back in 2011, Peter Rees, City planning
officer, warned the government against easing consent for office conversion, saying: “If developers were to turn offices into residential when times were tough, the City’s ability to attract and house new firms when conditions improved would be seriously diminished.” His view has not changed and is central
to the City’s detailed request, to be decided upon this summer, for exemption from government proposals to ease change of use from office-to-resi. Rees’ key argument is that
the change could mean up to 17.2m sq ft of lost City office space, much of it suitable for
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non-prime occupiers and start-ups (see box). Quite aside from planning policy,
conversion presents other obstacles for developers. First, low ceilings in offices built 30 or more years ago, or tall ceilings packed with air conditioning equipment in more modern examples, make conversions complicated. Wide office plates also require
expensive internal light wells and atriums to ensure “inner” flats enjoy at least some natural light. These can often make the business case unfeasible if conversion costs are pushed much above £750 per sq ft. The Corporation – although officially
aspiring to exceed its target of 110 new homes per year – also operates an unorthodox approach to affordable housing. “They usually seek a financial payment in lieu of affordable, so most City residential schemes that come forward are 100% private housing,” according to Kamil Chowdhury of CBRE Residential. Those who advise developers say
planning applications for City schemes remain tricky. “You will always need to demonstrate
that a residential development will not affect the primary business function of the City or prejudice future comprehensive redevelopment of potential large office sites,” says Simon Wallis of Savills’ London planning team. Yet despite the problems associated with City resi development, there has been a major rise in new home activity in recent
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