Mon, 31 Jul 2017
NEWBURY could run out of available office space within the next 18 months, a new report has revealed.
A lack of development, coupled with the use of Permitted Development Rights (PDR) to convert existing offices to residential units has left the town dangerously close to having no marketable office space left to offer to new or expanding businesses.
According to property consultants Lambert Smith Hampton Newbury has the lowest office availability rate in the whole of the Thames Valley, with just two per cent currently on the market.
And based on current take-up rates, this equates to only 1.5 years’ supply – also the lowest in the region.
West Berkshire Council has admitted it is “concerned” over the diminishing level of office space and is looking at ways to restrict conversions.
The Thames Valley Office Market Report calculates the available supply (76,000 sq ft) has fallen by more than 75 per cent since 2010.
One reason cited for the drop is the continued conversion of offices to residential units under PDR.
Such conversions have seen more than 100,000 sq ft of Newbury office space taken off the commercial market in the last year alone.
The PDR planning legislation, introduced by the coalition Government in 2013, means developers do not need to submit a planning application to change the use of a building from business to residential.
However, the changes have now seen developers move on from smaller town centre office spaces to larger business parks and industrial estates, such as Newbury Business Park and Overbridge Square Business Park.
Council spokeswoman, Peta Stoddart-Crompton, said: “Diminishing office space is a concern for West Berkshire. In part, this could be due to the Government directive to convert office space to residential, which does not require planning permission.
“However, the council has written to the DCLG (Department for Communities and Local Government) to express those concerns and introducing Article 4 (which would give the council power to restrict PDR) to prevent too much of this kind of development could be an option we consider for the future.”
The report also cites a lack of new development in the town as a reason for the low office space supply, with no new construction in Newbury since 2011.
Senior surveyor at Lambert Smith Hampton and author of the Thames Valley Office Market Report, Hannah Bennett, said some PDR conversions can help improve the office stock as long as those that are lost are replaced.
She said: “A large number of buildings that have been converted are of poorer quality and that is a good thing.
“That stock being taken out of the market is the poorer stock.
“The changing requirements of businesses has meant that a lot of the current offices aren’t suitable.
“The point is occupiers are seeking higher quality stock and that’s why you need that new stock coming through – or refurbishments of existing stock.”