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According to research conducted by Colliers International, at the end of last year approximately 6 million sq. ft. of office space was converted into residential, and this figure is increasing at an accelerated pace. According to Eugene O’Sullivan, Director at Morgan Pryce, “the supply of office space in the West End is particularly low in comparison to the rest of London, in 2014 there was just 180,000 sq. ft. of new space planned – clearly not enough.” The lack of space is putting pressure on rents and Morgan Pryce are seeing clients on a daily basis who are being priced out of central London.
However, a very unusual situation has arisen in St James; last year 20-21 St James Square, SW1, was put up for sale as a residential opportunity. However due to recent, much needed planning constraints from a concerned Westminster and worries over a flooded residential market in the area, the property is now being marketed as a new office development.
20-21 St James Square was acquired by Pembroke Real Estate in 2005 and contains 70,000 sq. ft. of rentable office space and is expected to fetch rents around the £100 psf mark. It was expected to be put on the market at £120 million for sale as residential.
Similar scenes are now expected at 25 Saville Row, W1, as Derwent London is reconsidering plans to turn its Mayfair Headquarters into 58,000 sq. ft. of residential and 5,600 sq. ft. of retail space. Rising rents off the back of a shortage in office stock has made keeping 25 Saville Row as offices seem like an appealing option. Similarly the increased level of residential schemes in the area may be taking the edge of office to residential conversion.
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.