I see three to five commercial property deals each week. My angle is to explore whether it is possible to convert part or all of a commercial building to residential use, under Permitted Development Rights (PDR).
The maths has been quite compelling. The capital value and rental value for residential space per square foot is usually much higher than the capital value and rental value of commercial space per sq ft - hence the attraction of converting to residential.
Permitted development rights for converting office space to residential use were first introduced in 2013. In the first two years of these rights coming into force, the greater London area has seen a loss of around 834,000sqm of office space.
Just a few years ago, the supply of office space exceeded demand and in many areas there was even a glut of vacant offices.
The idea behind these permitted development rights was to allow building owners to convert vacant office buildings to residential use with the minimum of red tape. However, the rules were drafted in a way which made no distinction between occupied and vacant office accommodation.
Therefore, vibrant towns which have both a strong residential and office market, have seen building owners convert fully occupied office buildings to residential use.