Home Office?

Planning consents for the conversion of offices to residential buildings in the West End is on the increase.  Last year schemes totalling more that 2 million sq ft of conversion were granted, significantly up on the 202,000 sq ft in 2010.  Values of West End conversions are being quoted at the £3,000 per sq ft mark as against £2,000 per sq ft for office space and a number of office building are currently on the market to attract residential developers to drain even more for the pool of available commercial space.  It is thought the demand is, yet again in the London residential market, being driven by demand from “overseas buyers” with the kudos of Mayfair and St. James’s being too great an attraction to resist.

Westminster Council would appear to be keen on this latest trend, showing limited resistance to the movement to convert.  Indeed, new planning regulations may make it even easier to carry these out without the need for a change of use consent.  The trend will continue to put the squeeze on the West End commercial occupier, those creating and bringing wealth into the capital on a continuing basis.  Rental levels on refurbished space in Mayfair are already breaking the £100 per sq ft level and, with a narrowing range of choice as new developments hit an all time low, there will be continual upward pressure on the limited vacant space available.

This is all very well for the present as the Capital’s residential market continues to resist the national trend of stagnation and even regression in housing prices.  Where there’s a fast buck to be made, why not?  When the economy turns, (and it has to doesn’t it?) the time lag to address the requirement for more commercial accommodation will be significant. Apart from the obvious lack of acreage in the West End, and they’re not making any more of that, the timescales to prepare and develop either new build, conversions or refurbishment will mean that the shortage of available space will be with us for some time to come.

Not all is doom and gloom on this front, however.  There are those who welcome the return to original usage of some fine buildings, with period features once again being brought back to a life they were originally intended for.