Permitted Development of Commercial Offices?

Permitted Development of Commercial Offices?

PD rights were introduced in May 2013 in an attempt to simplify the planning process, and encourage residential developments to improve the economy. But it’s the conversion of offices into residential units that has proven especially popular in some areas of the country, especially so in Hertfordshire – and particularly within Stevenage.

office-conv1Stevenage Borough Council was among the first local authorities to apply to protect its commercial office buildings in the prime commercial areas. But even with these areas of protection in place, a significant number of buildings in Stevenage have been converted to residential accommodation, via Permitted Development (PD) legislation.

Whilst some of the 400,000 sq ft that falls under this protection included stock that was a challenge to let, the council’s intervention has also resulted in many highly lettable buildings being taken out of the commercial property market, and is influencing the values of some remaining stock.

THE KNOCK ON EFFECT
A large amount of commercial office space within Stevenage now converted or demolished under the PD scheme. Consequently, the remaining stock is increasingly limited, and the knock-on effects are hard to ignore as both rental and capital values increase significantly. In the three year period since the new Permitted Development rights, there is some evidence of freehold units doubling in value.

The most recent changes to the Permitted Development Order are unlikely to have such a dramatic effect as the original, nonetheless once the market is fully aware and understand them, further effects on commercial units are inevitable.

To highlight the latest legislation, please see below a brief list of the main changes under the Town and Country Planning and General Permitted Development (England) Order 2015:

CHANGES IN THE USE CLASS ORDER

* B8 to C3 for a period of 3 years from Storage & Distribution to Residential, up to a limit of 500 m sq.

* Amusement Arcades & Casinos to C3 Residential up to 150 m sq of floor space.

* PD Right to change of use from A1 to A2.

* Betting Offices and Pay Day Loan Shops removed from A2 and are now Sui Generis.

* A1 & A2 Betting Offices, Pay Day Loan Shops & Casinos to A3 Restaurant. Size Limit up to 150 m sq limited for 2 years.

* PD right for A1 & A2 use to Assembly & Leisure Use D2 up to 200 m sq.

Of course, all of these Permitted Development rights are still subject to a prior approval process. Additionally, there remains specific exclusions in terms of location within the country, and timings on prior uses to permit for a Change of Use.

For further advice regarding offices please contact mike.phoenix@brownandlee.com, and for development and planning contact daniel.musgrove@brownandlee.com