020 RESEARCH: OFFICES-TO-RESIDENTIAL
THE ‘LOST OFFICES’ OF LONDON’S WEST END
• JUST UNDER 800,000 SQ FT OF WEST END OFFICES WERE CONVERTED TO HOMES IN 2013
• MORE SCHEMES IMPLEMENTED BUT WITH A SMALLER AVERAGE SIZE THAN 2012
• 1.5 MILLION SQ FT OF CONVERSION PROJECTS IN THE PIPELINE FROM 2013 CONSENTS
• MORE THAN 6 MILLION SQ FT OF OFFICES HAVE BEEN ‘LOST’ TO RESIDENTIAL CONVERSION SINCE 2001
• OTHER CONSENTED PROJECTS COULD RESULT IN A FURTHER LOSS OF 1.82 MILLION SQ FT
• CONVERSIONS ARE CONTRIBUTING TO CONSTRICTION OF THE OFFICE DEVELOPMENT PIPELINE
• RENTS RISING FOR BEST OFFICE SPACE
H2SO was the first property consultancy to chart the long-term trend for office-to-residential conversion in London’s West End when it published ground breaking research in 2010. By tracking consented planning applications for the conversion of office space into homes in London’s West End each calendar year, the study gauges the rate and volume of the office- to-residential conversion trend in the area.
The latest update by Colliers International looks at the consented and implemented projects that occurred during 2013, and what the future trend may mean for the West End office market.
CONVERSION ACTIVITY IN 2013
In 2013, there were a total of 196 relevant planning applications made within the research area for a change of use from Office (B1) to residential (C3). This represented a 13% increase over the same period in 2012 (173 applications).
Of the 186 projects that were given consent during 2013, 69 were implemented during the year. This represents an 82% increase on the 2012 level of consented and implemented projects.
The 2013 implemented projects resulted in the conversion of 652,987 sq ft of offices to residential. By floorspace, this was a 44% decrease on the corresponding volume in 2012, showing that although there were many more implemented schemes, the average size of schemes was smaller.
An additional 142,300 sq ft of office space was also converted during 2013 as a consequence of planning consents that were granted during 2012
Queen’s Park
H.R.
Maida Vale
Westbourne Bayswater
Venice Little but which had not been previously implemented.
Accordingly, the total amount of space that was converted from offices to residential in 2013 was 795,287 sq ft.
PAST AND FUTURE TRENDS
The conversion activity in 2013 means that in the period between 2001 and 2013, just over 6 million sq ft of West End offices have been redeveloped into homes.
During 2013, 1.5 million sq ft of conversion projects were given consent but were not implemented. This was almost a 200% increase on the corresponding 2012 level. This means that there are now consented projects with the potential to remove a further 1.82 million sq ft from the stock of West End offices.
Planning activity in the first quarter of 2014 shows no sign of the trend abating.
In Q1 2014, 48 additional planning applications were granted consent with eight already having been implemented. These projects have resulted in an additional loss of 41,900 sq ft of offices.
With regard to the overall trend going forward, it should be noted that there is still a substantial raft of buildings which have been publicly earmarked for conversion but have not yet entered the planning process.
Abbey Road
Regent’s Park
Church St.
Lancaster Gate
RESEARCH STUDY AREA
B.D.S. Bryanston and Dorset Square
H.R. Harrow Road
Hyde Park
B.D.S.
PAUL SMITH, CO-HEAD OF CENTRAL LONDON AGENCY & DEVELOPMENT:
“It’s interesting to see that the average size of conversion projects was smaller in 2013 than in the previous year. However, this shouldn’t be taken as a sign that the conversion trend has run its course; it is more a reflection that 2012 encompassed some large projects applying for consent.
“There is still a huge amount of conversion activity taking place, and with consented but unimplemented projects heading towards 2 million sq ft there will inevitably be further large areas of West End offices removed from the market in due course.
“Whilst many of these offices may be of a secondary nature and past their useful life, the fact that residential projects continue to be favoured ahead of commercial development will put further pressure on an office pipeline that is already struggling to keep up with demand.
“Supply of Grade A space is becoming particularly acute in the Core West End where there is currently just 250,000 sq ft of new space available in buildings of over 25,000 sq ft, and only a further 180,000 sq ft planned by the end of this year.
“This level of supply is not enough to satisfy demand, and this shortfall will be exacerbated in a more expansionary business environment where occupiers are seeking additional space.
Marylebone High Street
“This situation is putting upward pressure on rents. For the best space in the West End Core of Mayfair and St James’s, we are now seeing rents of around £110-£130 per sq ft even for larger amounts of space.”
West End
Knightsbridge and Belgravia
St James’s
Churchill Warwick
34 020 ISSUE 3 Q4 2014
Vincent Square
Tachbrook
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