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Friday, October 06, 2006
Mixed-use failing to deliver
Everyone knows that the only way to do development now and get it through the raft of policy and guidance is to do mixed-use. Apartment blocks have retail on the ground floor, office buildings have retail on the ground floor, big schemes mix it all up with residentially-led ones still finding room for retail, offices and live-work. All in the cause of sustainability, local shops and local jobs, less travelling and less fumes.

Except it seems that we haven't figured out how to masterplan and design all this new space to make it attractive to the market. About one-third of the commercial space in new mixed-use developments in London is lying empty, a report by London Development Research has revealed.

Within mixed-use schemes the long-term vacancy rate for offices is 34% and 27% for shops. Short-term rates are 75% for offices and 52% for shops. The research covers schemes that have been finished for between six months and five-and-a-half years.

The report calculates that a quarter of all residential developments finished during the five-year period, are mixed use, totalling 550 schemes. Residential developers have delivered almost 1m m2 of non-residential space over the period.

Commercial space struggles to find tenants for several reasons. Some space is not in the right location, having been built to satisfy local authority demand rather than market requirements. Some schemes featured space that had not been well designed for commercial users, with units that are too small or too large, irregular in shape or with low ceilings.

The boroughs with the greatest problems letting office space were Camden, Hackney, Lambeth, Southwark and Wandsworth. Those that struggled most to let retail space were Hackney and Lambeth. The report pointed out that some of the vacant space would be let if local authorities would allow a change of use.

“Developers are learning more about how to specify and let commercial space, and planners are becoming more sensitive to change. It is becoming clear that the policy isn’t working,” he said. “I wouldn’t be surprised if mixed-use policy isn’t tweaked to reflect the marketplace.”


Anonymous Ben Jones said...

An interesting report. A lot of the "other" floorpsace in the resi schemes we work on lies empty for years. The floorspace is usually included as a token gesture, as a sop to the LPA. Quite often the developer includes it as a "loss-leader" in the site viability and then is quite happy to sit on it until someone signs up to a significant lease at a good income. Developers are not solely to blame, however. The LPA will often insist on token commercial floorspace in mainly residential schemes just to be able to tick the "mixed-use" box, even when there is a lot of existing empty floorspace in the area. The policy justification for this is usually that they are "protecting employment floorspace for future demand".

3:34 pm  

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