50 property Permitted development: its impact
We are seeing the first valuations being completed following the Government’s recent changes to the planning system and associated permitted development, writes James Bennett, partner, Vail Williams LLP
The changes that came into effect in May, allow the conversion of offices to residential dwellings, without the need for formal planning approval, as long as certain criteria are met.
The housing market as a whole seems to be moving in a positive direction, assisted by not only general economic conditions, but also a number of government initiatives including the ‘Help to Buy’ scheme. This shift in the market has given developers confidence in pursuing potential residential conversion opportunities, while the secondary/tertiary office markets continue to see poor tenant demand.
The upsides are that the gross development value for completed residential schemes can show a marked uplift in value when compared with the existing office value. If located in a secondary/
tertiary location, these differences will often be significant. Letting voids for residential conversions are also reduced.
However, potential pitfalls are that conversion costs can be extensive and due to the nature of refurbishment, risks exist, particularly at the start of the construction programme and during the strip out phase. Once strip-out has been completed budget certainty may be established and cost risk significantly reduced.
In some cases, particularly with modern sound proofing and fire regulation requirements, costs can approach that of new build. However, the refurbishment period should be reduced and there may be no significant planning or s106 costs to take into consideration, offsetting high refurbishment costs.
Small is beautiful at Milton Park
Small businesses on Milton Park near Abingdon, can now take advantage of smart new facilities in the refurbished Milton Park Innovation Centre.
Officially opened by MEPC director James Dipple on September 30, the Innovation Centre now includes five bookable meeting rooms catering for up to 60 guests, a 50-seater business lounge and coffee bar, plus touch-down areas with WiFi.
Dipple marked the official launch by opening a wall of balloons before an audience of over 80 guests that included senior representatives from the private and public sector.
MEPC invested a “significant” sum in the refurbishment, after research showed customers wanted more meeting rooms and an informal business lounge area.
www.businessmag.co.uk
Speaking to The Business Magazine, Dipple said: “A lot of small companies are here because they want to develop their businesses. The centre gives them a prestigious address and a high-quality environment, and it is also a great place to bring clients and business associates.
“We are focused on giving our customers what they want. The whole point is that this is a place where people are proud to come to work, and we at MEPC are proud of the service and value for money we provide.”
In addition, he says, the centre provides the perfect focal point for meetings and networking opportunities, as well as a place for those already in the building to share their business skills and services.
James Dipple, MEPC director, toasts the opening of the new lounge
The Innovation Centre, which was established in 2008, supports the growth of around 80 small businesses, providing both start-ups and established businesses with
high-quality, flexible office space, as well as a virtual office facility for entrepreneurs who require a professional address, a telephone answering service and access to meeting rooms.
THE BUSINESS MAGAZINE – THAMES VALLEY – NOVEMBER 2013
Every opportunity will be different, but recent valuations carried out by Vail Williams have suggested values paid prior to work being carried out have broadly reflected existing office use values, with some premiums starting to rise. The uplift in value derived once refurbishment works have been completed in and around Reading has been up to three times. With the general value of secondary/tertiary offices remaining subdued, this uplift is likely to be repeated, or bettered in other Thames Valley towns.
As registered valuers, we are experts at looking at values on a property specific basis, rather than adopting property indices. With the new planning legislation, this has become even more relevant, particularly when considering “hope value” arising from possible residential conversion. We need to be very mindful that not every property will have the right
attributes to be converted and that works need to be completed early in 2016 in order to benefit from the relaxed planning regime.
At Vail Williams we have specialist valuation, building consultancy and planning teams, who can advise on these issues to ensure best value is achieved.
Details: James Bennett 07770-304010
jbennett@vailwilliams.com www.vailwilliams.com
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