A shortage of office space is emerging in the Thames Valley for small firms to move into once they start to expand.
James Finnis, head of south east office agency for JLL, believes start ups who are ready to move on from serviced offices, face a lack of available stock because so much has been lost to office conversions to residential under Permitted Development Rights (PDR).
He believes there have been a number of positive effects of PDR but detects a risk area after so many schemes have been converted.
He said: “In our view it has been a good thing in that it has reinvigorated town centres such as in Bracknell and Camberley and other places, and returned office stock to economic life.
“The question mark is; how far does it go? And when does it become a bad thing?”
He said a careful balance was needed to maintain stock for businesses. His JLL patch runs approximately from High Wycombe to Basingstoke and from Hammersmith to Theale. What he calls the ‘total universe’ of space within that area was around 83 million sq ft but since PDR came in, around 3 – 4 m sq ft has been lost to residential conversions.
But denser use of buildings by occupiers - generally seeing one person per 8 sq m as opposed to 1 person per 12 sq m previously – has been one cause of increased surplus stock, an oversupply which PDR has helped address.
But he argues that eroding that oversupply from the bottom up has had a beneficial effect on quality of remaining stock and office rents. Office buildings he said, required investment to maintain them from cutting the ribbon on day one.
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