CBRE examines office to residential change of use reforms
Changes to legislation that permits change of use from office to residential “have the capacity to substantially change the character and economic performance of commercial areas,” says CBRE. The firm, which recently hosted a seminar on the changes to permitted development rights, says the new legislation has met with opposition – more than 300 local authorities have applied for exemptions to it, but only 17 have been successful.
CBRE says the new rights bring potential benefits to developers, property owners and investors, despite considerable uncertainties. Nick Belsten, the firm’s Director of London Planning, has cautioned that the reforms are complex, time-limited and do not apply to some of the most sought-after residential areas. “Furthermore we anticipate there being legal challenges surrounding some of the clauses and this in turn leads to concerns for mortgage lenders and investors towards the end of the qualifying period,” he added. Despite this, he says the changes present a good opportunity for developers and investors that are willing to spend the time and effort required to create sellable schemes.
CBRE’s managing director of Residential, Lisa Hollands, notes that the commercial property market is full of opportunities for conversion and the residential market has lots of gaps – “the skill will be in matching the two”.
Alastair Perks, director of Central London Development at CBRE, says the locations where sellable schemes are most likely to be created are Croydon, Reading, Watford, Harrow, Bristol and Manchester. Within London, he identifies Bayswater, parts of Camden and Islington, Wapping, The Highway (Tower Hamlets), Lambeth and Belgravia as places where the reforms will go some way to providing additional housing.
