Office owner plans resi conversion after ‘non-existent’ recovery

The owner of a London office, most of which has been empty for years, looks set to join the list of landlords turning vacant workspace into homes. Hatton Garden Properties has submitted a change-of-use application to the City of London Corporation for the second and third floors of 15-17 Black Friars Lane, EC4. The proposal would create two new homes in the four-storey building. The ground floor is let to Harry’s Pizzeria Bar, while the first floor has been let to architecture firm IDL, which expects to take advantage of a lease break next year. The 1,034 sq ft second floor has been vacant since January 2020 and the 873 sq ft third floor since August 2021. The asking rent has been almost halved over the past two years to about £26 per sq ft. A marketing report from Pearl & Coutts said that although marketing conditions were “strong” prior to the onset of Covid-19, the pandemic “had a disastrous effect on the market”. It added: “Although the initial ‘lockdown’ reduced demand, recovery in this specific area has been challenging and non-existent.” “Our endeavours to date have not been productive and we have failed to let either of the floors,” the agents said. ”Feedback from any viewings that have taken place have suggested the layouts of the floors are quite challenging to maximise office layout due to the shape of the floor plates.” The firm added: “We have found that interested parties are having a greater choice. The area of search appears to be wider with less emphasis being put on a specific location. Generally, tenants are given a lot more opportunities within the city, which puts pressure on our ability to complete lettings. In addition, would-be movers from other office units where they are facing lease expiries are being seduced by their existing landlords to stay by offering very appealing terms. The area has attracted many residential occupiers to the area who have been impressed by the quiet enclave of the vicinity.”