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Post-recession London as a whole was given a nod to convert office to residential. The purpose of this? To get empty offices with smaller sized floor plates filled. This was very well received by owners as most property in central London is worth about 4x as much as residential in comparison to being used as office space. What actually happened has not been favourable to the London office market; millions of square feet have been taken from the office market and converted to residential. This has pushed the prices of office space past pre-recession highs and the vacancy rates to hang around 3-4%.
The new policy in Westminster is when an office to residential conversion takes place of more than 30% then there must also be an equivalent amount of commercial floor space provided. In addition, any conversions may be refused if the mix of housing does not outweigh the loss of office space. This will not apply if the office was originally housing.
Teresa Beatty, a commercial surveyor at Morgan Pryce quoted “Westminster has seen a loss in the millions of square feet from residential to commercial development and a lot more to come, this is great news for business wanting to work in this area.”
Teresa is right about the amount of space as 1.8million square feet has already converted, another 1.7 million square feet under constructions and 2.7million with planning applications granted.
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.