‘Crazy, hazy days are gone’: Consensus Capital outlines £50m office conversion plans
Andrew Montague, head of Consensus Capital Property, outlines his £50 million programme to convert disused offices into social housing
Why are you converting empty offices into affordable housing?There are a lot of unused office spaces around the UK in prime city centre locations. Many have reached the end of a 20 or 30 year lease and require significant investment to be brought up to standard.
We see that as an opportunity to acquire the building for a relatively low square foot value and then put it on a long lease to a registered social landlord (RSL).
Why partner with RSLs? There are so many developers that have gone under in the past decade. The reticence of banks to lend means speculative residential development is left to the big housebuilders or people with specialist funds.
We are going down a unique funding route, which allows us to fund land and develop it on the back of a residential lease with an RSL.
What projects are you working on now? We have 20 flats in Perth and 48 units in Edinburgh city centre on site. We have a further 15 sites in various stages of planning spread across Glasgow, Edinburgh, Galashiels, Birmingham, Bristol and Greater London. The two main architecture firms we work with are HTA and EMA Architecture and Design.
Which offices are best for conversion to residential? We’re pretty flexible but floorplates need to be rectangular with windows on both sides. We look at areas of between 140m² and 7,500m².
What are the main challenges? One of the main challenges is single-aspect development, planners don’t like that. But there is the argument we are taking a defunct building back into use.
How do you choose your architects? Are fees a factor? We are looking for very proactive professionals. Both HTA and EMA bring land deals to us and we have also had help from them with finding an RSL. We are not living in an era where you can charge fees of 6 or 7 per cent of construction cost because we are not making the same money people were making in those crazy, hazy days. For 48 flats in Edinburgh the design and build fee was £100,000 in total – that’s a good rate for a small firm.
Will permitted development rights for office-to-residential conversion make your job easier? I’m hopeful, but there is normally a big time gap before policies are implemented. It won’t improve our margins, but it will allow us to get on and start quicker.
How do you see the programme evolving? We are looking into converting offices into care home spaces.