According to SHW’s latest market figures, Croydon is set to lose c.1.25 million sq ft of office space through permitted develop rights (PDR).
The good news is that around 1,500 new residential units are already set to be created within the area, with consented PD schemes on major Croydon offices currently standing at just under 1 million sq ft. The bad news is that this is resulting in a real lack of supply for the office sector.
On top of this existing pipeline, schemes currently in planning include Mott Macdonald House, with plans for another 124 residential units, removing a further 70,000 sq ft of office space.
Tom Tarn, Director of SHW, explains the numbers, adding: “With other buildings being identified as ‘suitable for PD’, but not yet in the planning pipeline, totalling 200,000 sq ft, this takes us to c. 1.25m sq ft of potentially lost office stock.”
SHW’s Q3 South East Office Focus report recorded 4.74m sq ft of total, existing office space. Tom adds: “While this new wave of PD could potentially lead to the creation of around 1,800 to 2,000 new residential units in Croydon Town Centre, this move represents a loss of 25% of the total office space. This is roughly equivalent to the total take up over the last decade.”
With just 482,000 sq ft of availability also recorded in the Focus report, the area is already lacking in options for occupiers. Lettings are being completed in the best building as tenants relocate, including Southern Housing which recently moved to Mosaic East and AIG and AECOM both taking space at 69 Park Lane.
Tom concludes: “Vacancy in the best quality buildings is reducing through this absorption, with the poorer stock largely being removed from the market. What this equates to is better rents and terms achievable for committed office landlords, but very few options for occupiers with quoting rents below the mid £30s per sq ft. So now is the time for landlords and developers to bring forward new office space to serve the Croydon market.”