Life sciences and residential boost repurposing of offices in the UK

Due to market demand in the life sciences and residential sectors, 548,128 m2 of UK office space was sold for repurposing between 2022 and 2024, totaling £3.44 bn (€4.10 bn), according to CBRE research.

Offices - CBRE

This shift reflects a decline in office investment, down from 44% of total UK real estate investment a decade ago to 26% in the past five years. 
The growth of multifamily housing has driven up residential investment to an average of £11 bn (€13.1 bn) annually over the past five years.
Consequently, many long-vacant, lower-grade London offices are being converted for new purposes. Between 2022 and 2024, 306,580 m2 of such office space, valued at £2.5 bn (€3.0 bn), was sold for conversion into life sciences facilities, hotels, student housing, and other residential properties.
Beyond London, Cambridge leads in office conversions by square footage, followed by Leeds and Oxford. Life sciences facilities account for the majority of these conversions, with approximately 92,903 m2 repurposed in Oxford and Cambridge, and 111,484 m2 in London. 
In Birmingham, education facilities are the main conversion target, with educational institutions purchasing most of the properties, while Edinburgh saw five office buildings sold for hotel conversions.
The remaining cities in the report (Aberdeen, Bristol, Glasgow, Leeds, Liverpool, London, and Manchester) saw a combined 111,484 m2 of office space purchased for residential conversion. CBRE's research indicates that residential development is the most common repurposing of office space across the UK.
Colin Thomasson, head of UK Investment Properties at CBRE said: “Our research underscores a significant shift in the UK real estate landscape. Repurposing secondary office assets into vibrant, multifaceted spaces where office demand is weaker, or there is a demand-supply imbalance for other asset types such as living or life sciences, is a viable solution to satisfying demand.”
Simon Brown, head of UK Office Research at CBRE added: “Conversion to other asset types is not the only answer to repurposing secondary offices, as the office market itself is clearly becoming more polarised. The ability to source, and secure, grade A office space is acutely difficult for occupiers, who often find themselves turning to the development pipeline for a solution. Building quality and office location are of the highest priority and, as such, secondary office space presents opportunities for those that are happy to refurbish, as opposed to build.”