Residential Conversion Case Study
With Permitted Development rights extended beyond April 2016, offering freehold premises for residential conversion can prove an attractive option for owners.
And as the following Brown & Lee case study shows, residential conversion is an excellent alternate strategy for buildings that prove difficult to let, for reasons such as dated specification or location problems…
In mid 2015, Brown & Lee received an instruction to market, on a leasehold basis, a 6,000 sq ft self-contained office close to central Milton Keynes. The premises was within a 10-minute walk of the railway station and main city centre amenities and came with ample private parking, but vehicle access was only via a residential area.
The location, parking and layout made it a very good prospect for a tenant, and our initial marketing produced a number of strong leasehold requirements. Unfortunately, the access through the residential area proved to be a very strong detrimental factor, enough to prevent any serious leasehold proposals. Previous attempts to let office space in an adjacent building had also met with similar objections.
When it became clear that Permitted Development rights would be extended beyond April 2016, the instruction was reviewed with the client and we offered the buildings on a freehold basis to conversion specialists. This change in direction generated good interest, and in fact resulted in a ‘bidding war’ between two parties – initially for the detached building, and later extended to include the part vacant, part let, adjacent building. Eventually a deal was struck on a short exchange and delayed completion contract but without any subject to planning conditions.
The sale price was almost £2 million, which represented £125 per sq ft for approximately 11,000 sq ft of vacant office accommodation, plus some short term commercial income.
The purchaser was pleased to obtain good quality stock for conversion to residential accommodation. The switch in sales strategy provided a welcome option for our client to dispose of a property that had proven difficult to let, for a very realistic price.
If you are considering an alternate strategy for a commercial premises, why not discuss options and ideas with your local Brown & Lee specialist?
Submitted by: Brown & Lee Milton Keynes