Backlash as office conversions push businesses out of Tunbridge Wells

    Calverley House

    The economy of Tunbridge Wells could be at risk if ongoing losses in office space are not reversed leading business figures have warned.

    The fact that changes to planning laws which make it easier to convert office space to residential use were made permanent has helped exacerbate the shortfall, meaning firms are finding it harder to move into Tunbridge Wells or relocate within it, they claim.

    Successful applications for a ‘change of use’ to convert offices into housing within Tunbridge Wells remained steady at around ten per year from 2013 – when the government said it would ‘temporarily’ relax Permitted Development Rights covering office to residential conversions – until the end of 2015.

    However, in May this year the government said it would make these rights, which allow building owners and investors to effectively skirt the majority of planning criteria, permanent.

    One surveyor told the Times that since the rules were made permanent, his firm has seen: ‘an increase in the number of property owners converting offices into residential units’.

    Figures suggest this is indeed being borne out, with ten applications that have either been permitted or are pending permission being submitted up to September 1.

    The most notable of these is the plan to convert Calverley House into 112 housing units.

    This alone would result in the loss of 37,081.67 sq ft (3,445 sq m) of office space in the heart of the town, which is currently home to around 60 businesses.

    And local business leaders are beginning to worry it could be starting to impact the ‘vibrancy’ of the town’s economy.

    Ron Roser, Chairman of chartered surveyors Caxtons Commercial and Langton Business Services, said what was going on in the market was the reversal of earlier trends.

    “The pendulum which a decade or two ago had swung decisively in favour of converting residential property into offices – at which point there was concern about the town centre becoming a ghost town outside office hours – has now swung to the opposite side,” he said, adding: “The present major demand by investors seems to be for properties with residential potential, often including some retail element.”

    Mr Roser believes the relocation of Cripps to its new site in Royal Wells Park could see ‘half the road’ returned to residential usage after permission to turn the law firm’s former offices into 21 flats was given prior approval in September.

    Gary Jefferies, of Panoramic Wealth Management, said his own experience of moving his business into the town last year had revealed ‘precious little’ office space available.

    This was due to a number of factors, he added.

    “The growing trend of commercial property in Tunbridge Wells being converted into residential is reducing the stock of commercial units in the town. Coupled with this is the added problem that much of the available property offered was not for a sufficient period of time.”

    He believes most established businesses need ‘at least’ three years or longer as the disturbance and cost of moving can prove prohibitive.

    Furthermore, he suggested businesses with three or four staff are going to need an office of at least 500 sq ft, but much of the offered space is ‘significantly larger’ and often landlords are not looking to split the area.

    He continued: “In the modern world of the internet, the perceived need for commercial outlets is declining, making matters harder for smaller businesses to survive.

    “Nationally, there is talk that the high street in towns will return to places where people live, as businesses are then based in out of town sites.

    “My own concern for the town is that the business community becomes fragmented and we lose our commercial focus as businesses relocate out of town. This could reduce commercial activity, particularly Monday to Friday, and create an even bigger commuter base, leaving behind a midweek ghost town.”

    Tyson Sheppard, a Chartered Building Surveyor at Bracketts in Tunbridge Wells, said the firm had seen an increase in the number of property owners applying for change of use.

    But he believes the conversion of office buildings to residential increases the supply of ‘much-needed housing’ in the town.

    “The conversion of office units to residential brings otherwise vacant properties back into use, which has
    a number of advantages.

    “There is a boost to the local economy as more people are using the local shops, bars, restaurants and facilities, it increases the vibrancy of town centres during evenings and weekends, and results in increased footfall in town centre locations.”

    TYSON SHEPPARD: CHARTERED BUILDING SURVEYOR AT BRACKETTS

    “The nature of town centres is changing as property owners are taking advantage of relaxed planning legislation and converting otherwise vacant, and sometimes derelict, office space into residential use.

    “Young adults are living with parents longer, the age of first-time buyers is increasing, and house prices continue to rise. The conversion of office buildings to residential therefore increases the supply of much-needed housing.

    “Profitability, as well as planning policy, continues to affect the decision-making process of property owners considering how to best utilise their real estate assets.

    “Historically, fully-leased commercial buildings generally yielded higher returns on investment than residential. However, some landlords have struggled to let their offices, particularly in town centre locations, resulting in properties being vacant for months, and sometimes years.

    “Tenants often prefer out of town business estates, and the large floor areas of the vacant town centre offices are too large for small companies.

    “Given recent changes in planning legislation, which now allows B1(a) office units to be converted into class C3 residential properties without full planning permission, these vacant premises may now have a better future as their owners are being provided with the flexibility of considering conversion to residential. This can provide part of the answer to the lack of construction of new houses.

    “The conversion of office units to residential brings otherwise vacant properties back into use, which has a number of advantages.

    “There is a boost to the local economy as more people are using the local shops, bars, restaurants and facilities, it increases the vibrancy of town centres during evenings and weekends, and results in increased footfall in town centre locations.

    “The conversion works are still subject to the Building Regulations, which means the thermal efficiency of the building fabric is increased, which has a positive environmental impact. Since Permitted Development Rights for office buildings were made permanent earlier this year, we have seen an increase in the number of property owners converting their offices to residential units.

    “We have been involved with several schemes within the last 12 months, and are due to commence another two shortly.”

    ANDREW METCALF: MAXIM PR

    Andrew Metcalf, a Director of Kent Invicta Chamber of Commerce and head of Maxim, a Tunbridge Wells-based PR agency, said: “As a company that lost our offices for residential when our former landlord secured a change of use, we know first hand how difficult it is to find suitable office space for a small business like ours.

    “The hard economic reality is that residential space is worth more than commercial property.

    “If it’s easy for a landlord to switch uses, you can understand why they do it. This is an unintended consequence of changes in government planning policy.

    “The economic imperative is that the town needs a thriving business community with companies of all sizes.”

    CRAIG STRONG: CAPITAL CURRENCIES

    “It is a tricky situation, and compounded by investors/developers able to achieve higher yields on residential rather
    than commercial.

    “We have had first-hand experience in Lonsdale Gardens where the developer got ‘change of use’ and probably, quite rightly, decided that residential was the way to go forward.

    “The trouble is that long term there will be an impact on the town centre, where business will be forced out to the periphery, resulting in decreased revenue for shops, restaurants, cafés and pubs.

    “It is short sighted, but if the loophole is there then, as always, things will be exploited to the full – why wouldn’t you?”