A new report has indicated to Simon Morris that millions of pounds worth of London commercial property is currently sitting empty in certain areas of the city. This is despite the fact that in certain areas of Central London, quality commercial property stock is in short supply.
Demand for London commercial property reached unprecedented heights in 2015. According to the Wall Street Journal, 11 million square feet of office space is currently being constructed in Central London. However the amount of office space available to lease in the district has sunk to a 14-year low.
But research conducted by Get West London shows that £26 million worth of commercial space is sitting empty in Brent, North-West London. The publication found that there are a total of 949 offices, warehouses, shops and other properties that currently have no tenants in the borough. Together, it would cost £26.8 million to rent these properties for one year.
The most expensive property on the list was Entoria House on Cumberland Avenue, near Central Middlesex Hospital. It would cost £1.05 million to rent the space for a 12 month period. Entoria House was followed by a former Wickes branch near Wembley Stadium; this space has a rent tag of £825,000 per annum.
The study also revealed that 55 of the 949 properties that are sitting empty in Brent would cost more that £100,000 each to rent for 12 months. Furthermore, eight properties are listed as having been empty since April 1994, 20 since the year 2000, and almost 200 have been left without tenants since 2010.
The shortage of commercial property in the UK’s capital city has forced developers to refit derelict old buildings for modern tenants. For example Pentonville building in Islington, which the government said they would sell to developers earlier this year.
Before a developer takes on a new project they need to calculate whether the cost of renovating an old building will outweigh the returns they can accrue from renting it out to tenants. The right developer with the right plan could turn these empty spaces into lucrative commercial property assets.