Hospitals, care homes and schools were among the alternative uses suggested for the Thames Valley’s swathes of empty offices, when property figures gathered for a round table discussion.
And delegates debated the idea of Local Development Orders (LDO) being given to town centres to speed the process of change.
Rare Commercial Property and iB Architects gathered the panel of professionals at One Forbury Place to debate repurposing of the region’s 16.5 million sq ft of empty offices. See picture caption below for the panel line up.
Jonathan Mannings, managing director of Rare Commercial Property, presented the stark reality of empty space. Central London alone has 20m sq ft of empty, mostly Grade B and C, stock, while there will be 330m sq ft empty in the US by 2030.
“It’s clearly a fairly major issue in a global context, as well as in the South East of the UK.”
He said notable empty buildings in the Thames Valley include 130,000 sq ft Aldermaston Park, set in 139 acres and decaying, while many in Bracknell have been converted to residential.
Wood Group’s expected move from Shinfield Park to 120,000 sq ft at Green Park represents a 50 per cent downsizing – a typical scenario.
Mr Mannings went on: “We are seeing, time and time again, that companies coming into the market are downsizing, most of them by at least 50 per cent, so it’s quite a seismic shift.
“Of all the possible sectors, the medical sector is one which requires a physical presence. This sector would seem to be a great potential source of future occupiers if the existing framework of a building is to be retained.”
Further suggestions included refugee or homeless accommodation or conversion to educational use, due to RAAC problems in schools. Life sciences are one possibility but only in some cases due to floor to ceiling height requirements.
Architect Ian Blake, founder and managing director of iB Architects, said: “Education or healthcare seem the easiest wins. From the practical, architectural point of view, a building like this (1 Forbury Place) is really difficult to turn into resi with its deep floor plates sealed facades.”
His colleague and fellow director Penny Dixon recently had treatment in a medical building which had been a retail unit.
She asked: “Is it essential that hospitals have all their facilities on one site, in one building, or could they portion off various clinics for various things and put them in other places? This was a small clinic with four or five consulting rooms and two little operating surgeries.”
The downsizing by office occupiers was questioned by Charles Gardner, managing director of Goshawk. Hotdesking, he said, is not always working out and 50 per cent reductions in occupiers’ space may be going too far.
He said: “What will take people back to the office is giving them more space, but in a more collaborative way. So they will still be hotdesking but with more space per desk and more breakout space, so I’m not sure it’s a given that the trend towards a 50 per cent reduction in space will last.
“Maybe we’ll look back on this as being a moment in time we didn’t quite get right.”
Making it worthwhile for people to return, he said, is key. When Yell occupied the former Reading Central (now 3 Forbury Place), the gym had a sprung floor – an early example of an employer improving staff facilities.
But Mr Mannings reported that decision makers were not making decisions.
“We’re talking to a lot of occupiers who are saying ‘we just don’t know at this stage’ and a lot of what we’re seeing at the moment is a very lethargic property market. They don’t want to make a decision too quickly, that in 18 months are seen to be completely the wrong decisions.”
The concept of homeworking, cause of much of the empty space, prompted considerable debate.
Edmund Smith, corporate property and asset management surveyor at the University of Reading, argued that in-person working is essential for doing business deals and creating collaboration.
“Businesses are struggling out of Covid. People are wanting to work from home because they’ve got used to it but, actually, the big boys in London are saying ‘no, we want to pull people back’ because they’re starting to realise that the efficiency and profitability of their businesses is being affected.”
Ms Dixon noted the young had got used to homeworking because much of their university studies had had to be done from home. However, Rupert Holtby, estates manager at Greenham Business Park, explained there is a cost.
“It’s our only chance to put across your company ethos and if you don’t have that your company identity is lost,” he said.
But work by REDA had revealed that the true figure of office occupancy in Reading was lower than most people had predicted. Chief executive Nigel Horton-Baker told the meeting: “We are back to probably 30 per cent in terms of average occupancy rates in offices from the work we’ve done.
“It’s a ballpark figure but it’s the 70 per cent that the FD is looking at and asking ‘What are we getting for our rent, rates etc?’”
He suggested there is a need to identify the functions within specific sectors where more people are working in offices.
A new angle on the working from home concept was revealed to the meeting, raising a number of eyebrows. An Eastern European survey showed the top three reasons people liked to work from home was 1) they don’t like their boss, 2) they don’t want to share toilets and 3) they liked to work in their pyjamas.
Mr Smith said recruitment had become difficult since the power is now with employees not employers.
Stefanie Rachmann-Davies, principal engineer with Odyssey, pointed to the difficulty in getting to know new recruits who had joined during lockdown. Those people, she said, found it difficult to gel with the team.
“Now we are strongly encouraged to come back to the office at least three days a week and that works very well.”
Although homeworking reduces car use, Ms Rachmann-Davies said the issue is more complex.
“Transport is one element but people’s mental health is another. As much as people say they like working from home, there’s probably just as large a proportion who don’t like it and don’t want to be stuck in their bedrooms. There has to be a balance.”
Thames Valley Park’s likely new major occupant, Lonza, came up in discussion but there was a question over how that location would be received.
Rebecca McAllister, director of planning for Savills, argued it wasn’t a place for the young. She said: “There’s always going to be a demand, but it’s not going to be out of Thames Valley Park. People don’t generally want to go and work out of Thames Valley Park. They want to be in the town centre, where they can go for a drink after work and get the bus or train home.”
Mr Mannings offered an opposing view: “I think it’s a generational issue There are a lot of people my age who would be very happy to work out of Thames Valley Park. I can drive there really easily, park my car outside the office, go and do my job and, at the end of the day, just go home.
“If what you are saying was adopted on every occasion we would see empty business parks around the town and you would see everybody wanting to come in and we are not seeing that.”
But trying to rescue office buildings, according to UK Property Forums managing director Matthew Battle, is the wrong mindset.
“I don’t know why you’re getting emotional about them. They’re gone, they’re dead, move on. They shouldn’t be offices, they’ve come to the end of their natural life cycle.
“When the architects designed them, they probably had 20-30 years. We’re beyond that now, just move on. It’s ok. There are buildings within Green Park that are going to need to be recycled because they’ve come to the end of their life and that’s ok. Its natural evolution.”
The University of Reading, he said, needed to get more engaged in creating demand since the big IT companies have largely gone.
The subject of recycling of buildings, as opposed to redevelopment, was picked up by Mrs McAllister. She said Savills is producing a report on the subject. Few local authorities know what to do since Government guidance is lacking, she said.
Mr Gardner argued that offices could be converted to care homes.
“These buildings have lots of lifts, which you need in care homes. They are not hospital-sized lifts but they are well-lifted so you can get wheelchairs up and down.
“In many of the buildings there are reasonably flexible floorplates and common areas so you can see how they could be converted to that use.
Dementia care requires greater security, he said, but the concept would help relieve bed blocking in hospitals. He added: “And these places don’t need to be in town centres necessarily and are not great traffic generators.”
What’s been lacking since the days of the Property Services Agency, according to Mr Mannings, is any form of Government body, where an empty building can be registered for Government or social need.
The meeting heard that research by REDA showed the eye-opening scale of change likely in Reading town centre.
Mr Horton-Baker had been part of a years-long study which showed, while there are currently around 5,000 people living in the town centre, that figure could increase eight-fold over the next few decades.
“Potentially, by our 2050 Vision period, there’s going to be about 30,000 – 40,000 people living in Reading town centre. That blew my mind.”
He envisaged fewer office workers along with the increased number of residents. He said: “There’ll be lots of people living and commuting out. They will want health services, education services, they’ll want retail, they’ll want local shops, so it will come back into its own, but it will be a different town centre to what we know now.”
But he urged caution in the rush to convert offices to other uses.
“We get all excited about the reuse of office space but then we could find we haven’t got any office space because it’s all been turned into different things. So you need that mix of uses and we have to protect our Grade A offices.”
Building in the flexibility for future conversion was emphasised by Mr Smith but the slowness of the planning system presents obstacles. Mr Gardner pointed to Local Plans taking so long they are often out of date by their completion. Another key document, Reading Borough Council’s Employment Needs Assessment, is, said Mrs McAllister, sure to be out of date.
The problem of the snail’s pace of the system prompted the proposal of a radical solution for town centres.
Mr Holtby said: “We are very lucky at Greenham, we have an LDO. Planners have their input at the start but they are then cut out of it, so we can get on with it.
“Outside of that, it would take us four years to do anything. Nothing would be happening at Greenham or Milton Park if it were not for their LDOs.”
Mr Blake proposed LDOs for town centres, prompting a broad consensus among the panel.
Mr Holtby said: “You need to get one town centre to do it and prove the point and others will then adopt it.
“West Berskshire Council got the comfort to agree an LDO for Greenham from seeing Milton Park – they went and had a look.
“We had to take them through that and, obviously, we had to pay a significant amount, but were it not for Milton Park proving the route and saying ‘it’s ok, we’ve not been tarnished by giving up a little bit of control’, we wouldn’t be where we are.”
The proposal could overcome issues of risk averse landlords, unwilling to take decisive action on their empty offices, according to Mr Gardner.
“The planning process is increasingly expensive and uncertain so there’s quite a lot of reason to sit on your hands as a decision maker, which results in these offices just being left there because, as soon as you take a decision, it involves spending some money and if it doesn’t work out, then someone is going to say ‘hold on a moment, how did we get to that decision?’”
At Greenham the LDO served to de-risk development.
Mr Holtby said: “What we did at Greenham was say to an occupier, ‘tell me what you want and we can deliver it in 21 days’. It’s not me applying for planning, it’s me notifying the council.”
Mrs McAllister added: “That’s what a Local Plan is meant to do. But look how difficult that is – and it doesn’t help that Government says it’s going to amend NPPF and takes forever to do it.”
One problem which slows the system was highlighted by Mr Blake in his work on Neighbourhood Development Plans.
In his experience, people involved in parish councils and stakeholder groups are those with time to do it but are not necessarily fully representative of a wider community and don’t always see the bigger picture.
His colleague, Ms Dixon, explained it directly. She said: “That means it’s a very narrow bunch of people who get to have a say in what happens. And by the time the plan gets implemented, they will no longer be there and we are stuck with their plans.”
Mrs McAllister summed up the generational divide in people’s approaches to getting involved in development and planning at parish councils and stakeholder groups.
“The young like change but they don’t go, middle-aged like things to stay as they are and the older generation want to go back to when they could buy their bread next door.”
Image shows (clockwise from bottom left): Edmund Smith, corporate property and asset management surveyor for the University of Reading; Penny Dixon, director of iB Architects; Rebecca McAllister, director of planning for Savills; Rupert Holtby, estates manager for Greenham Business Park; Charles Gardner, managing director of Goshawk; Jonathan Mannings, managing director of Rare Commercial Property, Lewis Pearson, surveyor for Rare Commercial Property; Nigel Horton-Baker, chief executive of REDA; Ian Blake, managing director of iB Architects; Matthew Battle, managing director of UK Property Forums; Stefanie Rachmann-Davies, principal engineer for Odyssey.
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