The London Property Alliance, which represents the capital’s real estate developers and investors, has called for offices in core business districts to receive critical economic infrastructure status.
It argues that a lack of supply in prime office space could undermine the UK’s service industry, which accounts for 81% of UK GVA and 83% of UK employment, according to recently published government figures.
The move would give offices the same status as data centres and gigafactories in planning policy.
Charles Begley, chief executive of the LPA, said: “Modern, sustainable and amenity-rich offices are critical in attracting talent and ensuring businesses are well placed to operate and compete globally, but securing planning consent has become increasingly challenging.
Responding to the recently concluded consultation on the National Planning Policy Framework, the LPA highlighted a sharp fall in the number of office developments in central London.
The number of major applications across London’s central business district, known as the Central Activities Zone (CAZ), was down by 54% in 2023 compared with 2013.
This, the LPA argued, is worrying considering that data from Knight Frank shows that vacancy rates for grade-A office space are at an all-time low of 0.6% in the City and 0.4% in Westminster.
The LPA said that designating offices in the CAZ as critical infrastructure would help address this shortage, while also boosting productivity and growth.
Such a change would complement the recommendations made in a report by Arup published by the LPA earlier this year. It argued that a more “balanced and flexible” approach to planning in central London would enable an additional 41m sq ft of office space to be delivered by 2045 and generate an additional £101bn GVA.
Begley added: “The government should not miss the opportunity to help reverse this trend, which is acting as a drag on growth.”
Photo © Marc-Olivier Jodoin/Unsplash
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