A new lease of life for London's old offices

Property: From gin distilleries to police stations; monasteries to match factories, the capital's homehunters are moving to some unlikely conversions. Felicity Cannell reports

Residential development in London is very big business. And one of the most profitable developments is the conversion of obsolete offices. Over 100 major office conversions have been, or are in the process of being, completed in central London since 1993, potentially creating around 3,800 homes.

4.4 million more homes are needed to meet demand nationwide by year 2016 according to the Department of the Environment, with most affected being South and Eastern Regions. In London, alone, more than 500,000 will be needed, roughly equivalent to six additional boroughs.

Housebuilders are calling for the release of more green belt land, and the environmentalists claim that there is plenty of opportunity within urban areas to meet the demand. The Government's planning policy requires 75 per cent of projected housing development to be in towns and cities. David Goldstone, Chairman of Regalian said, "If we are not to dig deep into green belt land, we have to find the opportunity of redeveloping existing buildings."

Towns and cities are the centre and structure of civilisation and unless we experience a sweeping cultural revolution, they will remain so, despite the technology to communicate and work away from them. Making towns and cities more attractive places to live in is the Government's preferred approach to meeting the expected housing demand nationwide. Environment Secretary John Gummer said: "We need to give serious consideration to the current problems and apparent disadvantages of living in the city. We must therefore make towns more attractive places so that people want to live in them. This means better housing, less crime, a high standard of education and decent surroundings."

Apparent disadvantages aside, central London has become a hip place to live. "There is a cultural cachet to living in John Major's 'cool city'," says Geoff Marsh of London Residential Research. "London is booming as a world city. The influx of foreigners, not just heavyweight bankers, but footballers, restauranteurs, artists and the like, has brought us back from the suburbs. Foreigners have taught us how to live in cities." There are also the practicalities. Time is short, commuting is expensive, and in the late Eighties and early Ninties London property became historically cheap. Central London property is still a bargain. An apartment in a newly devloped block with lift, 24-hour porterage and parking, ranges from pounds 70,000 for one bedroom to half a million for a three-bed penthouse.

From this paper's former offices in City Road to a listed gin distillery in Camden; from the old Islington Police Station, complete with cells (converted!) to a former monastery in Poplar; all have provided successful development material. And thanks to the present Government's attitude to health and education, many schools and hospitals have also been released into developers' hands.

The high costs of some of these conversions has an obvious impact on the eventual sale price. For example, Gilbey House, Camden Lock, a former Gin distillery developed by Regalian, had a floor space of 150,000 sq ft. After necessary structural changes to provide sufficient light for residential apartments, the total floor space was almost halved. However, for the vendor 150,000 sq ft of redundant office space has even less value.

Apartments in the White House on the South Bank, formerly the Shell Downstream Building developed by Galliard Homes, went on sale on 15 March. 81 apartments were available, and by Sunday 78 had been sold. Just over half of these went to buyers in Hong Kong, either as straight investments or for family and holiday use.

John Parker, of Brian Lack & Co, started selling to investors from the Far East in 1985. Now, in the aftermath of the Hong Kong stockmarket boom, spare money is pouring into Europe. Singapore is following suit, and John Parker expects the next influx to come from Malaysia. Westfield College in Hampstead has been sold to Singapore investors who are developing it into 196 apartments.

Planning authorities often insist upon a 25 per cent share of affordable housing. Developers are not keen, as this basically means subsidised housing and increases the cost of the remaining 75 per cent, as well as dealing with prejudices against mixed tenure communities. Also car parking requirements are heavy - an office block needs significantly less parking space than a residential block. But within central London, as with other major European cities, car usage should not be such a problem as with out of town developments.

Restoring life to areas of inner cities after office hours is a welcome by-product of development east of the centre. The Corporation of London does not want large-scale residential developments within the commercial core, but is encouraging conversions on the City fringes - an effective way of preserving some of the more attractive office blocks which are now totally redundant as modern workplaces.

David Goldstone of Regalian, says. "There is a need to make use of redundant buildings which do not reflect well upon the reputation of a major international financial centre."

So where are the developers in force? In Marylebone Road, Marathon House, a Sixties office block , is being developed into 106 apartments. In Clerkenwell developments include the Lexington Building in City Road, and the Paramount Building in St John Street. Shoreditch, a cheaper alternative, remains dominated by the one-way traffic system, but has an enormous number of empty warehouse and studio space, thanks to crippling business rents in the late 1980s.

Spitalfields with its fringe art galleries, and fringe artists, is struggling to solidify its place as "Bohemian central", but certain developments have sold out. Further south "the pretty bit" on the river, from St Katherine's Dock through to Limehouse, is still seeing the most intensive residential development activity in London. The Docklands market has shown a strong recovery over the past 12 months, particularly around Wapping. Riverside views remain a hefty carrot, although many involve craning your neck round the balcony.

The Isle of Dogs and Canary Wharf possess some of the most stunning, innovative architecture, complemented by the Docklands Light Railway. A visitor emerging from the Limehouse Link tunnel is presented with the development of a 21st century metropolis, which is progressing solidly and steadily.

South of the river, one of the boldest and bravest residential developments, in the opinion of London Residential Research, is that of Alexander Fleming House at the Elephant and Castle, purchased by St George last year. This early 1960s office block will provide 422 apartments, many of which, in the developer's opinion, will be affordable in the real sense - ie to private buyers, not subsidised tenants. Alternatively do it yourself is now a viable option. For example, a 19-unit office block south of Westminster Bridge has recently been converted back to a stunning georgian family residence. Many local authorities are sympathetic to small-scale private residential conversions from office use as long a strict regulations regarding future use are adhered to.

New developments have been heavily influenced by the USA, incorporating leisure facilities - health and fitness centres, bars and restaurants. The Bow Quarter, E3, was initially marketed as American living in London. The former Bryant and May matchstick factory has one- and two-bedroomed galleried apartments, from pounds 65,000, sold by LMD (0181 983 5755).

At the other end of the price range Peninsular Heights, on the Embankment SE1 has one- and three-bedroomed apartments from pounds 430,000. This certainly has uninterupted views of the river and, despite the British traditional dislike of tower blocks, the price goes up along with the lift. The difference here is that the lift works. (Regalian 0171 493 9613.)

In a rare development on the other side of town, on the Harrow Road, close to Westbourne Park underground station, loft space above offices is being sold, still in original condition, from pounds 177,500 for 1300 sq ft. The agent, Spectacular Lofts, considers a minimum of pounds 20,000 is needed for conversion. (0171 724 4404.)