The Square Mile has been evolving for quite some time. While it remains a centre for business, there have been lots of changes to make it a better spot for tourists and visitors. The area is also dealing with the challenges of changing working habits. Plus, demands from businesses have changed dramatically when it comes to the quality of the office space they want. All of this is having a massive impact on property investment in the City of London.

The issue

The main cause for concern is the situation is leaving a number of older properties in limbo. Businesses want “prime” quality offices. These are modern, full of amenities, and highly energy efficient. The Government is also pushing for offices to be greener and comply with higher standards by 2030.

However, it would cost a substantial amount for owners of old buildings to update them to these standards. With questions over demand, a number of them are not willing to commit to updating. High interest rates and financial pressures also make many owners wary of committing. As a result, the assets become stranded. Around 20% of buildings in the area are at risk of this.

Fast track

The City of London is looking to help rectify the situation. The plan is to begin fast tracking planning applications for converting older offices. This means that it could become quicker to get approval for projects. It would save time and costs to make projects more viable.

However, there is an important thing to note here. Currently the plan is only to speed up the process for proposals that are “sympathetic” to the identity of the Square Mile. So, there will be more support for things like converting old offices into hotels, university space, and research facilities. They will also support plans that help make the area more of a destination for visitors, including cultural uses such as galleries.

What the plan doesn’t do is look at speeding up proposals to convert old offices into housing. In fact, there is some hesitation for encouraging these projects. The fear is having more people living in the area could limit the planning and delivery of high rise office developments in the future. It would mean these projects have to deal with stricter constraints on noise and light if there were more residential buildings.

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It will be interesting to see what happens with the plans to speed up change of use proposals. The City of London Corporation will make the final decision and may choose to reduce how much evidence developers need to provide. At the moment they must sufficiently justify that a switch will be beneficial. Reducing the burden here could speed up preparing applications, reviewing them, and making decisions.

At Finefair Ltd we appreciate that you can find some of the most impressive options for property investment in the City of London. There could be even more in the future if older buildings get the updates they need. Change of use can be good in many cases, especially when it creates brand new amenities.

If you are looking at investments and need some help, you can contact us. We offer a range of services, including portfolio management, guaranteed rent, and more.