As a result of Peterborough’s excellent transport links straight into central London, the city has become increasingly popular with buyers looking for relatively low house prices away from the rat race. The introduction of Permitted Development Rights (PDR) back in 2015 has been instrumental in boosting Peterborough’s residential offer as second hand office buildings continue to be converted to residential use. However, with city centre demand for office space at a high and with very little stock remaining what might this mean for the city’s commercial future?
Since the introduction of PDR, approximately 600,000 sq ft of city centre office space has been sold with the intention of converting it for residential use, equating to approximately 15 per cent of Peterborough’s total office stock. For the most part, PDR was put in place to help remove tired and second hand stock from the market by finding an alternative use for buildings that would probably have become obsolete otherwise. But, with little to no commercial development in the pipeline, it has meant that the rapidly declining office stock is yet to be replaced.
PDR deals aside, the largest city centre letting last year was the RNIB taking just over 19,000 sq ft at Midgate House. As a result, there is now only one city centre building, Stuart House, which can offer occupiers space of this size or more. However, with more 180,000 sq ft of city centre requirements currently out in the market, it is likely that businesses will have to go elsewhere to find what they are looking for.
Furthermore, with competition fierce for remaining space, Grade A city centre rents have started to creep up, rising from £12.50 per sq ft to £13 in the last couple of years. This is only set to continue given the current climate.
Often, a severe lack of supply acts as a catalyst for further development, but this is not currently the case. Peterborough City Council has recently released a new Local Plan to determine the city’s future and ultimately, the Council’s land allocation for commercial use will determine whether Peterborough can remain a successful business centre.
With existing Peterborough-based companies facing limited expansion opportunities, coupled with restricted numbers of new entrants into the local office market due to the shortage of suitable stock, it’s a crucial time for one of the East of England’s largest cities.
Read more: Regional Office Market Report