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Business, Housing

Lambeth Council plans to protect office space

Lambeth Council is proposing a measure that would protect valuable office space from being turned into residential units.

Lambeth has a high number of small businesses and is increasingly popular with start-ups and more established companies but the council warns the loss of office space directly undermines the borough’s potential for economic growth and development, including scope for business expansion, job retention and creation.

The council proposes introducing what’s known as an Article 4 direction which would protect designated areas including Brixton and parts of Clapham from ‘permitted development rights’ introduced by the government which has already seen the loss of vital office space, in some cases forcing businesses out of the borough. The direction means people would have to apply for planning permission to change use of an office to housing in the designated areas.

Lambeth supports the creation of more housing to meet and exceed its housing target, and believes there is sufficient land to meet that need. Housing is not appropriate in office clusters and in some areas occupied by light industrial or waste services, where there can be an impact from noise, dust or smells . There’s also no control over the quality of housing created under permitted development rights and the council cannot secure affordable housing on those sites.

Cllr Jack Hopkins, Cabinet member for Regeneration, Business and Culture said: “Lambeth needs homes and jobs but the government’s scheme risks us losing valuable employment space and having poor quality housing which is no win for anyone except speculative developers. Businesses can’t grow and nor can our local economy if we lose space for people to work and end up with substandard accommodation like beds in sheds.”

One high profile example of prior approvals for change of use from office to residential is
The Piano House in Brixton: a long-standing and well-regarded hub for flexible and low-cost small business space, fully occupied by a range of mainly creative sector firms.

Despite being protected as a Key Industrial and Business Area the majority of the B1(a) floor space has received prior approval for change of use to residential under the permitted development right. Lambeth Council believes Article 4 protection will provide a ‘ring’ around areas designated for employment, office and business space. The proposal will be discussed by Cabinet on July 11th.

Notes to Editors:
London: There is approximately 1.5 million square metres of office floor space in London that could potentially be lost in prior approvals. Using the assumption of one job per 16 square metres, this equates to space for 93,750 jobs. Based on occupancy data provided by London boroughs on prior approvals up to 31st March 2015, 38 per cent of these would have been fully occupied at the time consent was requested, representing 35,600 jobs. A further 18 per cent are recorded as part occupied.
Figures from London boroughs indicate that approval has been granted for at least 100,000 sq m of wholly occupied office floorspace between May 2013 and April 2015, and 834,000 sq m total office floorspace has been lost.

Some boroughs have reported that the permitted development right has had an impact on land values for scarce office stock, threatening the viability of office redevelopment and refurbishment even in areas where there is clear demand.

Lambeth: Since the introduction of the original permitted development right in May 2013, Lambeth has received 235 prior approval applications for change of use from office to residential. Of these 137 (58%) have been approved, 75 (32%) refused and 23 (10%) withdrawn. For the period to April 2015, the approvals would equate to the loss of approximately 14,000 m2 of B1(a) office floor space and the creation of 508 new residential units, if all the approvals were implemented (by March 2015, the rate of implementation for those granted since May 2013 was 73%).

At an employment density ratio of 10.8 square metres per worker (source: London Office Policy Review update 2014), the loss of 14,000m2 of B1(a) floor-space equates to 1,296 jobs.

The areas proposed are:
1. Clapham North Industrial Estate Key Industrial and Business Area (KIBA)
2. Durham Street/Oval Way KIBA
3. Eurolink Business Centre KIBA
4. Kennington Business Park KIBA
5. Lion Yard KIBA
6. Park Hall Trading Estate KIBA
7. Shakespeare Road Business Centre KIBA
8. Southbank House and Newport Street – Part KIBA
9. Stannary Street KIBA
10. Timber Mill Way KIBA
11. Brixton Town Centre Overview
12. Brixton Town Centre North West
13. Brixton Town Centre East
14. Brixton Town Centre South
15. Clapham Sites

Lambeth Business Survey 2015
Lambeth Council undertook a detailed survey of 381 businesses based in the borough in 2015 which found approximately 47% of respondents had been trading in Lambeth for more than 10 years at the time of the survey. 87% of respondents thought it likely or very likely they would still be trading in Lambeth in three years’ time, while 7% thought it unlikely or very unlikely.
6 out 10 businesses (61%) rated Lambeth as a ‘good’ or ‘very good’ place to do businesses, only 6% rating Lambeth as ‘poor’ or ‘very poor’ as a place to do business and one in three as average. This showed an improvement on the previous 2011 Lambeth Business Survey, when 38% rated Lambeth as ‘good’ or ‘very good’ and 22% as ‘poor’ or ‘very poor’.
Good transport links (30%), being a generally ‘good location’ (29%) and being close to central London (21%) were considered strengths of Lambeth as a business location.
Reflecting Lambeth’s (and London’s) highly skilled and diverse labour pool, the majority of respondents (66%) said they do not face any challenges when it comes to recruiting.
Approximately 60% were planning to grow their business over the next three years, 35% were planning to maintain the existing size of their operations, and only 2% were planning to reduce the scale of their operations. In terms of the number of staff they employ, 21% of respondents said it had increased over the past 12 months, 9% said it had decreased and 69% said it had stayed about the same. Looking ahead, 32% of respondents anticipated an increase in the number of staff they employ to increase over the coming 12 months, 63% anticipated no change, and only 2% to decrease. These figures are similar to those reported in the 2011 Lambeth Business Survey where 60% expected to see growth and 5% to reduce the scale of their operations.
Lack of office space or difficulty in finding commercial units ranked 5th amongst responses. This issue was most frequently raised by those in the ‘Information, Communication, Property, Finance and Insurance’ sectors (9%).

Lambeth Employment Land Review Update Atkins February 2013
Employment forecasts identify a net growth of 11,600 additional B Use Class jobs under the Baseline Scenario, 4,100 under the Lower Growth Scenario and 16,200 under the Higher Growth Scenario.
In all scenarios the job growth is anticipated to be largely in the B1 class jobs (office based jobs), whilst B1(c) and B2 jobs (general industrial and manufacturing jobs) are forecast to decline.
This translates into additional need for B1 (a) employment floor-space in the period to 2026. In gross terms, this ranges from 82,700 sq m under the Lower Growth Scenario, up to 166,300 sq m under the Baseline Scenario and 268,500 sq m under the Higher Growth Scenario.
Demand for office floor-space is equivalent to a 10-33% increase in the overall stock of B1 (a)/ (b) premises. Much of the potential B1a floor-space is in the Vauxhall and Waterloo Opportunity areas and the Town Centres. This provides office based premises of over 1,000 sq m and is likely to meet the needs of those businesses that require large Grade A office accommodation.

Despite the large amount of potential floor space that could come forward, protection of existing B1a floor space will continue to be important. In particular protection of existing premises in KIBAs and other smaller sites will help to provide a choice of flexible and affordable accommodation for SMEs.

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