London’s office-to-resi frenzy appears to have fizzled out, just four years after the introduction of permitted development rights.
New stats from Colliers, published today in the FT, show developers started on just 178,000 square feet of conversions in the capital last year, down from 534,000 in 2015, and the massive 873,000 recorded in 2014.
Whatsmore, developers have withdrawn applications for another 343,000 square feet that had been earmarked for the resi market, up from just 69,000 square feet last year.
Brought in during 2013 and given permanent status in 2016, PDRs were meant to help with the housing shortage; thing is, developers are currently seeing office space as a better bet, said David Hanrahan, director and co-head of London offices at Colliers: “This was very much in vogue when central London residential values started to motor, but now there’s an oversupply of high-end residential in central areas and when developers sit down and do the numbers, actually, office space is looking more promising.”
In June of last year, Sadiq Khan announced plans to bring in “more control” over resi conversions after City Hall published data on how much office space had been lost since 2013 (an estimated 1.5 million square metres); going by these latest figures, he need not have bothered…