Pace of office-to-homes conversion in London’s West End quickens
Property News - Pace of office-to-homes conversion in London’s West End quickens
• Just under 800,000 sq ft of West End offices were converted to homes in 2013
• More than 6m sq ft of offices have been ‘lost’ to residential conversion since 2001
• Conversions are contributing to constriction of office supply
In research that analyses the trend for converting office space in London’s West End into homes, Colliers International reports that nearly 800,000 sq ft of commercial office space became residential in 2013 and that the pace of the conversion trend is quickening.
In 2013, Westminster council received a total of 196 relevant planning applications for a change of use from Office (B1) to residential (C3) in the West End Core. This represented a 13% increase over the same period in 2012.
This trend has continued into 2014: in the first quarter of the year, 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.
The latest conversion activity means that since 2001 more than 6m sq ft of West End offices have been redeveloped into homes.
Paul Smith, Co-Head of Central London Agency and Development at Colliers International comments: “There is still a huge amount of conversion activity taking place, and with consented but unimplemented projects heading towards 2m 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 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.”
Ashley Osborne, Head of UK Residential at Colliers International, said, “There has been some concern that converting office buildings to residential will diminish Westminster’s economic vibrancy, but in our experience most purchasers of residential property in London are owner occupiers or intend to spend significant time in the property. As such, they contribute significantly to the local economy.”