CoStar News's teams across the UK, France and the US looked at how offices are being redeveloped into alternative uses across their respective countries.
Click here to read the French update and here to read the US.
The redevelopment of offices for alternative uses has been arguably the most far-reaching and visible change to the UK's real estate in the past decade.
Driven by an ongoing crisis in providing homes for a fast-growing population alongside seismic changes in demand, swathes of offices have been turned into something else. The COVID-19 pandemic and working from home jet-propelled the trend with offices becoming homes, hotels, shops, labs, sports centres and even wedding venues. All of this has been encouraged by two factors in particular – a radical loosening of government restrictions on redevelopment, and more recently, tumbling values for offices.
The evolution
The then-ruling Conservative Party's drive to make redeveloping offices as homes easier began in 2013 with the introduction of Use Class Order changes to favour Permitted Development Rights for office-to-residential development.
According to initial figures from the Department of Levelling Up, Housing and Communities, this unlocked a wave of conversions that have averaged around 12,000 new homes a year in England and, at its peak, saw 17,751 delivered in 2016-17 via changes of use from offices. An Lambert Smith Hampton review of the figures last year found 60% of all of these conversions have been in Greater London, the South East or the East of England, but the total number delivered each year has dwindled by more than half since that peak in 2017.
That is partly because PDR rights initially lacked built-in safeguards to protect the quality of the converted homes, particularly in terms of space and natural light. The rights were amended in 2020 to include a requirement that conversions provide adequate natural light, and national space standards have applied since 2021.
By 2023 the government relaxed regulations again so that commercial buildings, regardless of their size, can now be turned into homes without going through the full planning process. That led to an initial record spike in applications to local planning authorities.
As important are the recent falls in investment values for offices, particularly for secondary stock, in the wake of the Covid-19 lockdowns and the move towards hybrid working.
Lambert Smith Hampton research last year found residential values per square foot were on average 53% higher than office values across the wider South East and East of England area. That gap had widened significantly following the sharp repricing of office values seen since late 2022, and LSH said in particular large margins to secondary office values have emerged in many locations.
CBRE reports that from 2022 to 2024 in central London, a total 3.3 million square feet of office stock was sold for £2.5 billion, with the intention of conversion to a range of alternative-use types, notably life sciences, hotels, student accommodation, and residential.
The data for key UK regional cities is similar. From 2022 to 2024, CBRE says 10 of the UK’s largest regional office markets had 2.6 million square feet of office stock purchased with the intention of change of use, translating to £900 million of transactions.
What is clear is the trend has not slowed in 2025, and office investors, developers, landlords and agents all see plenty of reasons to be positive about it.
BNP Paribas Real Estate says major investment in converting offices to alternative uses in the South East of England, plus demand, means take-up is "nailed on" to be the highest in three years in 2025 and many towns have set new record rents.
It says there were £285 million of offices traded in the third quarter, a 35% increase against the second quarter of 2025, with much of this driven by alternative investors attracted by the very low capital value per square foot for some acquisitions.
Hugh White, head of national investment and a senior director, says in the first three quarters of 2025, 41% of stock traded was going to alternative uses in what he calls the "great clear-out".
"That is the reality we are in. But there is a huge disparity between the prime end and the rest. The alternative uses that are being turned to are everything – that is all levels of resi, and all forms of industrial. In one example it was a supermarket."
As another example, CoStar data finds a wave of office-to-residential conversions is reshaping Leicester’s city centre in the east Midlands, as developers respond to structural change in the office sector and rising demand for housing. Leicester ranks among the UK’s fastest-growing markets. Meanwhile, demand for offices has weakened. Net absorption, the change in occupied space, has been negative by more than half a million square feet, while vacancies have tripled since the onset of Covid-19.
In central London, Felix Rabeneck, director, central London investment at Savills, says office-to-alternative use investment has continued to be a big part of the market in 2025. "Approximately 21% of investment in the City of London and around 14% in the West End has been for alternative use, although that is square footage rather than value."
But Rabeneck says it is a positive, as it is taking stock out of the market that was redundant as offices. "It is repurposing for alternative uses such as hotels that are re-energising the area, particularly in the City.”
Charles Curtis, founder of investment adviser XR Real Estate, says there have no doubt been success stories. "However, now that optimism is meeting reality. Mounting challenges face developers such as an increasing number of Article 4 directions restricting residential conversions, escalating build costs, higher finance and holding costs, the end of Help to Buy, and the new Gateway 2 legislation all making schemes harder to deliver. With costs continuing to rise, developers and landowners alike need to work together with a clear view of where values now sit. A pragmatic approach on both sides will be key to unlocking viable projects in the current market.
"If we put the above disconnect aside, probably the biggest hurdle to overcome is the inherent conflict of interest many councils face. They’re under pressure to deliver more housing, yet at the same time, those redundant office buildings often generate far more income in business rates than they would as residential units paying council tax. Until this imbalance is addressed, unlocking the full potential of permitted development will remain an uphill battle."
Landmark examples
The Currys headquarters
Electronics retailer Currys recently surrendered the lease of its 150,000-square-foot headquarters in Acton in London.
The move is being hailed as a major win by the group and its landlord. Frost Meadowcroft, which advised Currys, says the work began with the group rolling out a flexible working policy for 1,500 employees during lockdown. The retailer has reported increased productivity, improved employee satisfaction and significant cost efficiencies.
As part of this, it signed an agreement for 400 workstations with WeWork at 10 York Road in Waterloo, one of the first times a major company in the UK switched entirely to a flexible office provider. To support regional hubs, Currys also refurbished spaces in its stores as flexible workspaces for staff.
Currys separately concluded the lease surrender with landlord Imperial College London. Imperial has been pursuing a major residential development on the site and has also announced a meanwhile use partnership with Sciopolis that will see 55,000 square feet of the offices repurposed into a hub for science and technology ventures.
Simon Kibble of Frost Meadowcroft says the outcome represents a positive result for all parties: "That's Currys realigning its space requirements for a hybrid future, Imperial College advancing its innovation strategy, and West London gaining a new science and technology ecosystem."
8 Canada Square
Qatar Investment Authority and Canary Wharf Group are working on plans for what they are describing as the world's "largest transformation of an HQ office tower into a sustainable mixed-use building" at 8 Canada Square, the building vacated by HSBC at the Docklands financial district.
Kohn Pedersen Fox last year won a global competition to be architect on the 1.1 million-square-foot tower. Initial plans propose a mix of workspaces, leisure, entertainment, education and cultural attractions.
BT Tower
MCR Hotels bought London’s iconic BT Tower from BT Group for £275 million with plans to repurpose the Grade II-listed structure into a hotel.
The tower at 60 Cleveland Street has a net internal area of circa 213,000 square feet.