Islington Council’s affordable workspace policy set to hit new office developments

25 Sep 19 | Lewis Westhoff

Islington Council are currently consulting on a draft affordable workspace policy which is set to hit the commercial office market throughout the borough.


Islington Council are currently consulting on a draft affordable workspace policy which is set to hit the commercial office market throughout the borough.

The draft affordable workspace policy proposes that commercial developments which provide 1,000 sqm or more of Class B1(a) and/or B1(b) of gross floorspace would be required to provide 10% of this floorspace as affordable workspace. This would apply to sites within the Central Activities Zone (CAZ), the CAZ Fringe areas of Angel/Upper Street and Kings Cross/Pentonville Road, along with designated Town Centres and Primary Employment Locations throughout the borough.

The affordable workspace would be leased to the Council at a peppercorn rent for a period of at least 20 years. The Council would then ultimately let the space to an operator from the Council’s affordable workspace provider list.

One of the key characteristics of the draft policy is that it would apply to gross floorspace and not net additional floorspace. This would see the affordable workspace requirement apply not only to new major commercial developments, but also to existing office stock that is being refurbished and/or extended where the resultant gross floorspace is 1,000 sqm or more.

The proposed policy would be the first of its kind in London. All other affordable workspace policies being pursued by other central London boroughs, such as Hackney and Southwark, are based on a discounted market rent requirement only.

The requirement for peppercorn rent is therefore likely to have a noticeable impact on the viability of commercial developments within the borough.

With the draft policy applying to gross floorspace, it may also disincentivise landowners from upgrading and renewing existing office stock to avoid the affordable workspace requirement.

The Council have stated that the reason for the introduction of affordable workspace policy is a result of the rapidly rising land values and the competition between residential and commercial property markets, which has meant rising rents have forced many local smaller businesses to leave the borough. The Council see this policy as being able to secure much needed affordable space for smaller businesses, allowing the Council to nurture and encourage local businesses.

With the Council identifying that 400,000 sqm of new office floorspace is required throughout the borough by 2036, it remains to be seen whether the proposed new affordable workspace policy would jeopardise this being reached.

The Council are currently consulting on their Regulation 19 Draft Local Plan, with the consultation period ending on 18 October 2019.

A number of Iceni’s clients have raised concerns at the proposed affordable workspace policy and we are in the process of preparing written representations to submit as part of this consultation period.

Lewis Westhoff Senior Planner,Planning
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