The evolution of office real estate in the UK
As part of the Moore LOCATION 2022 newsletter, Ian Matthews provides an overview on how office real estate has evolved and is now being used in a different way. Listen to his audiocast now.
Following the pandemic in 2020, the need and purpose for offices has changed. We have seen many businesses review their real estate portfolio as more people are now working from home, whether full-time or hybrid. As a result, many organisations are looking for a smaller space than their previous office, to cater to the hybrid way of working. This is often their headquarters, to be used as a destination for collaboration when needed.
Even though there may be a reduced number of people working in offices, there is still demand for prime office space. Especially in London, where the historically high rental yields have remained steady throughout the pandemic and now, as we recover. This change means that there is also a lot of vacant commercial real estate. Consequently, we have seen a surge in office conversions to residential real estate through Permitted Development Regulations (PDRs). Depending on the development type, the VAT for conversions and repurposing may be charged at 20%, 5% or 0% so it is important that you get the right advice and paperwork in order. This applies to all stages, from acquisition, to development and through to final sale.
Read a previous insight on this topic contains further information on the VAT for office to residential conversions here.
London is the second most expensive commercial location in the world, following Hong Kong, but there is a vast amount of opportunity to invest in UK real estate at present. Get in touch if you would like to discuss any of the matters in Ian’s audiocast.