The owner of a Cannon Street office block wants to convert the building into flats after securing just one viewing for the workspace in an entire year.
131-133 Cannon Street, EC4, has six floors of small offices over ground floor retail, but three of the office floors are empty with a third vacant while still on a sub-lease. At over 60%, that void is greater than at any point since 2007.
Now, owner Cardshops has made a change-of-use application to turn the office space into three flats – one studio and two two-bedroom duplex flats. Planning documents lodged with the City of London Corporation suggest the company could boost the value of the block by more than 50% if the application is successful.
A viability statement prepared by Marchmont Chartered Surveyors, which has been letting agency on the property since 2007, said demand for the office space has been falling since 2012. Marchmont’s Kevin Davies said the dwindling demand was caused by smaller tenants often being able to work remotely as well as “a massive shift in the market to serviced offices and trendy business centres”.
“The impact of Covid clearly had an impact during 2020 and 2021 but since the market has opened up enquires have been limited and in the last 12 months, we have only had one serious enquiry which did not result in a letting,” Davies wrote. “That interest went to a serviced office business centre.”
He added that the offices are likely to remain “very difficult to let in the future and are not really suitable as office accommodation in the long term”, noting “small [floorplates] and poor facilities”.
“Interest and enquires in the office has consistently reduced over the last few years,” he said. “We see little prospect of attracting and retaining small businesses now or in the future.”
As an office, the building is valued at about £2.23m. Marchmont said that a residential-led scheme would be valued at £3.45m.
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