Shops snub mixed-use schemes in London

The aim of mixed-use schemes is to create a more sustainable form of development by combining housing with other uses, predominantly offices and retail, to provide amenities and jobs for the community.

But the Mixed-Use Performance report has found that many are failing to meet these objectives because they cannot secure tenants.

Within mixed-use schemes the long-term vacancy rate for offices is 34% and 27% for shops.

Short-term rates are higher, at 75% for offices and 52% for shops. The research covers schemes that have been finished for between six months and five-and-a-half years, such as the Tally Ho in Barnet, north London.

The report calculates that mixed-use accounts for a quarter of all residential developments finished during the five-year period, with 550 schemes. Residential developers have delivered almost 1 million m2 of non-residential space over the past five years, with office and retail the most popular uses.

Commercial space struggles to find tenants for several reasons. Some space is not in the right location, having been built to satisfy local authority demand, rather than market requirements.

For schemes completed before 2005 the boroughs with the greatest problems letting office space were Camden, Hackney, Lambeth, Southwark and Wandsworth. Those that struggled most to let retail space were Hackney and Lambeth.

Some schemes featured space that had not been well designed for commercial users, as the units were either too small or too large, were irregular in shape or had low ceilings.

The report pointed out that some of the vacant space would be let if local authorities would allow a change of use.

Tim Craine, co-author of the report, said: “Developers are learning more about how to specify and let commercial space, and planners are becoming more sensitive to change.”

But he added that the evidence could provoke policy change.

“It is becoming clear that the policy isn’t working,” he said. “I wouldn’t be surprised if mixed-use policy isn’t tweaked to reflect the marketplace.”