Over the last three years, BCIS has received a number of office block to residential conversion projects. In 2013 the subdued office market, combined with the political desire to promote the delivery of new homes throughout the UK, led to the Government introducing new rules, which allowed for the change of use of offices to residential without the need to obtain planning permission.

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The new rules were to apply until 30 May 2016, but in October 2015, the Government announced that from April 2016 the temporary permitted development rights would be made permanent. However, applications were also required to deal with the impact of noise from commercial premises on the intended occupiers of the development. Also, converted housing did not have to meet affordability or disability standards set by local authorities for new build.

The following two projects submitted by Trident Building Consultancy Ltd and Poole Dick Associates respectively, show comparisons between the cost of an office conversion and a new build block of flats similar in size and number of units:

Prospect House: Conversion of office building to eight flats

This scheme involved the conversion of a 362m2 three-storey brick construction 1980s office block, providing 7Nr one bedroom, two-person flats and 1Nr studio flat. The building cost is £1,177/m2 (rebased to 2Q2017 and UK mean location factor), compared with the average of £1,262/m2 for similar office to residential conversion projects. The contract period was 22 weeks.

Superstructure, at £380/m2 includes:

  • Making good existing floors
  • Staircase alterations and new staircases
  • Pitched roof alterations and repairs
  • Repairs and redecorations to external windows and doors
  • Stripping out internal walls. Metal stud partitions with Gyproc Soundbloc
  • Timber doors

Finishes, at £224/m2 include:

  • Relining masonry walls (external) with plasterboard on metal stud and insulation. Ceramic tiles and emulsion.
  • Stripping out raised floors. Chipboard on 50mm Kingspan K3 insulation floor. Carpets to communal areas/stairs and bedrooms. Limestone tiles to bathrooms/showers and engineered timber floors to kitchens/living rooms.
  • Stripping out suspended ceilings. Plasterboard, skim and emulsion.

Fittings and furnishings, at £134/m2 include:

  • Kitchen cabinets, shelving, clocks and noticeboards

Services, at £363/m2 include:

  • Stripping out sanitaryware and installation of new sanitaryware
  • Kitchen appliances
  • Stripping out mechanical and electrical installations. Installation of heating system to flats, power and light

External works, at £88/m2 include:

  • Refurbishing pavement, railing decoration and signage
  • Upgrading water and electrical supplies
  • Bin store

The £/m2 figures include preliminaries, at 7% of the remainder of the contract sum excluding contingences, apportioned by cost.

Wellington Road: Nine flats

This scheme involved the construction of a 510m2 three-storey block providing 9Nr one bedroom, two-person flats for affordable rent. The building cost is £1,225/m2 (rebased to 2Q2017 and UK mean location factor), compared with the average of £1,267/m2 for similar flats projects. The contract period was 39 weeks.

Substructure, at £146/m2 includes:

  • Pile foundations

Superstructure, at £374/m2 includes:

  • Facing brick and block cavity walls
  • Staircase
  • Timber stud and block partitions
  • Timber doors

Finishes, at £224/m2 include:

  • Plasterboard, skim and emulsion wall finishes
  • Plasterboard, skim and emulsion ceilings

Fittings and furnishings, at £25/m2 include:

  • Kitchen cabinets

Services, at £199/m2 include:

  • Sanitaryware
  • Mechanical and electrical installations

External works, at £216/m2 include:

  • Site preparation, roads, paths, paving and landscaping
  • Drainage
  • Services

The £/m2 figures include preliminaries, at 27% of the remainder of the contract sum excluding contingences, apportioned by cost.

Office conversion versus new build

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While the difference in cost between conversions and new build is nominal in this example, the developer spent more on fitting out and servicing the conversion. The conversion was completed in a shorter contract period.

The change in planning rules has had an unintended consequence; a recent CBRE report commissioned by the British Council for Offices (BC) found that while it had improved house building output, office conversions had caused a shortage of mid-priced office space, particularly in London.

BCIS would like to thank Trident Building Consultancy Ltd and Poole Dick Associates for providing the data and everyone who submits projects to be published online. If you would like to talk to BCIS about submitting data, please contact Metin Mustafa on +44 (0)20 7695 1518 or email data@bcis.co.uk

Cost analyses are available as part of the BCIS Online service.

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