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Take-up in Central London offices has increased 11% each year, hitting its highest level since 2000. In particular, the Docklands area as much as doubled thanks to activity at Canary Wharf.
However, the change in planning rules that led to the ability to change use from commercial to residential without need for consent has inevitably led to shortages of office space. The Permitted Development Rights have been criticised for changing thriving business areas into residential ‘ghost towns’ where converted property has been snatched up but remains empty for much of the year.
The report noted that 11 million square feet of floorspace is intended for or has been converted into non-commercial use since the planning changes were implemented in April 2013. With the policy due to expire in a year’s time, already an increase has been noted in the rate of London offices allocated for residential use, and this acceleration is expected to continue in order to capitalise on the high residential property values. Whether the scheme will be extended past the 30 May 2016 date remains to be seen.
The Central London take-up pattern has been mirrored in other parts of the country, with Manchester seeing its strongest take-up since 2001 and Edinburgh’s highest take-up on record. However, the rest of the country have not escaped the effects of the permitted development rights either, with 8 million square feet of office space leaving the market outside Central London in the last two years, with 1 million of this in Bristol alone. Other areas that have lost a significant amount of total office space are Hemel Hempstead, Watford and Slough.
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.