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Convert obsolete offices and create 11,500 new homes say LSH Research

wantspacegotspace.co.uk - Convert obsolete offices and create 11,500 new homes say LSH Research11,500 new homes could be created by converting 7.4m sq ft of the UK’s obsolete office stock – according to Lambert Smith Hampton’s latest research, Office Market Review 2013: Addressing obsolescence.
 
If converted, these new homes would fulfill 25% of the total recently pledged by the Deputy Prime Minister, Nick Clegg.
 
LSH’s research analysed 32 regional markets and found that 27% of total regional availability is obsolete (11.7m sq ft) and of this stock 7.4m sq ft is suitable for conversion.
 
Explaining why we have so much obsolete office stock Ian Leather, regional director of office agency, said: “Modern workplace trends have changed office occupier’s requirements – they need flexible, open plan space and crucially less of it. In the last 20 years, the amount of allocated space per person in an average UK office has halved.
 
“Office occupier requirements will continue in this vein, meaning any stock that does not meet modern workplace trends is unlikely to ever be let again and while not every obsolete building can be converted a fair proportion could be.”
 
He added: “In the past, getting planning permission to convert an office into residential accommodation could be costly and time consuming. This is no longer the case in England following the government’s recent announcement that they will allow office space to be converted without planning permission.”
 
The incentive to convert is greatest in London, where the gap between office and residential values is highest. However, the gains to be made from conversion are substantial across the UK. Average capital values for UK residential space are approximately £155 per sq ft, compared to average secondary and tertiary office values which range from £30 to £80 per sq ft.

Our top five centres from the 32 we analysed, where there are buildings in the right locations, with suitable layouts and residential demand are:
1.     Birmingham
2.     Edinburgh
3.     Nottingham
4.     Slough
5.     Manchester
 
Ian said: “Put simply, obsolete office space is a drag on our market and offering investors and developers little or no value. However, the return from converting to residential accommodation is far greater and with the headache of planning permission now removed from England the conversion route is an obvious step for any investor or developer and would go some way towards providing additional homes for our already over-crowded nation.”

Posted by The Editor (wantspacegotspace) on 19th April 2013 (updated 26/04/2013)

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