London Borough of Sutton - Justification for Exemption for Sutton

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London Borough of Sutton Justification for the Exemption of Sutton Town Centre from

Permitted Development Rights for Change of Use from

Commercial (B1a) to Residential (C3)

February 2013

Agenda Item 1229

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Index Executive Summary 3 Purpose of the Document 4 Criteria for Exemption 4 Borough Overview 4 Recent Trends 4 Future Trends 7 Council Planning Policy, Economic Strategies and Infrastructure Schemes 9 Justification for Criterion 1 The Scale of Impact in Absolute Terms 13 Justification for Criterion 2 The Significance of the Adverse Impact at the Local Authority Level or Wider 16 Justification for Criterion 3 The Degree to which there is likely to be a Strategic and Long-Term Adverse Economic Impact 20 Justification for Criterion 4 Whether the Proposed Area of Exemption is The Smallest Area Necessary to Address the Potential Adverse Economic Impact 23 Conclusion 25 Table 1: Vacant Sites within Sutton Town Centre 5 Table 2: Housing Delivery within the London Borough of Sutton 6 Table 3: Forecast Sector Change and Existing Office Employment Share by Sector in the London Borough of Sutton 7 Table 4: Land Values within the London Borough of Sutton by Land Use 13 Table 5: Timeline Change in London Comparison Turnover Ranking 17 Table 6: Floorspace and Vacancy Rates in t 24 Figure 1: Policy DM36 from the Site Development Policies Development

Plan Document 11 Figure 2: Spatial Distribution of Employees working in Sutton Town Centre 18 Figure 3: Sutton Town Centre 2008 Retail Catchment Area 19 Figure 4: Sutton Town Centre 2018 Retail Catchment Area 19 Appendix 23

Agenda Item 12 Page 130

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Executive Summary

The London Borough of Sutton proposes that Sutton Town Centre, as defined on the B and on the accompanying map, be exempted from the permitted development rights for change of use from commercial (B1a) to residential (C3). If an exemption is NOT granted for Sutton Town Centre: Criterion 1

Significant Employment Threat: For the sake of 9,986 sq m of long-term vacant office space, 128,706 sq m of occupied office floorspace in Sutton Town Centre will be jeopardised

Retail and Leisure Opportunities Missed: Chances for the predicted retail and leisure growth in the centre will be threatened by the uncontrolled change to wholly residential use

Affordable Housing Supply Cut: 424 of potential affordable homes will be lost to market housing Criterion 2

Jobs Lost across London and the South East: role as an important employment centre across south London, south west London and the wider South East will be diminished

Regional Shopping Destination Stagnating: position as a major shopping centre for south London, south west London and particularly Surrey will be under threat

The strategy of the London Enterprise Panel will not be met Criterion 3

High Tech Business Growth Stifled: The promotion of a Life Sciences Cluster, in conjunction with the Royal Marsden Hospital and Institute for Cancer Research, is likely to be hampered

Green Business Expansion Stalled: The strengthening of employment in the Green Economy is likely to be jeopardised And, Criterion 4

Tiny Area Requested: It should be stressed an exemption would not preclude residential-led, mixed-use development in Sutton Town Centre.

of meeting its housing targets, it is considered that an exemption from the permitted development rights for a change of use from commercial B1(a) to C3 residential is justified for Sutton Town Centre.

Agenda Item 12Page 131

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1 Purpose of the Document 1.1 The purpose of this document is to justify an exemption for Sutton Town

and on the accompanying map, from permitted development rights for a change of use from commercial (B1a) to residential (C3). The evidence for the justification is set out against the criteria in Annex B of the Chief Planning Officer Letter of 24 January 2013.

2 Criteria for Exemption 2.1 The exemption for Sutton Town Centre is made against the criteria for

consequences at the local authority level which are not offset by the positive

The scale of the impact in absolute terms; The significance of the adverse impact at the level of the local authority or

wider; The degree to which there is likely to be a strategic and long-term adverse

economic impact; and, Whether the proposed area of exemption is the smallest area necessary to

address the potential adverse economic impact 3 Borough Overview 3.1 The London Borough of Sutton is part of the south western suburbs of

London. It includes one of only 12 Metropolitan Centres in London: Sutton Town Centre, as well as six District Centres: Carshalton, Cheam, North Cheam, Rosehill, Wallington and Worcester Park. Sutton Town Centre and the six district centres are the areas with the vast majority of B1(a) commercial space. There are a few smaller offices outside these centres, mainly in

B2 and B8 uses. 4 Recent Trends

Office Demand and Supply and Change of Use 4.1 As requirements for office space have reduced in recent years, the Borough

has successfully managed the change in the amount of office space within the Borough by permitting the development of redundant office stock for other

Business Floorspace Statistics (2012)1 calculated that, in terms of internal floorspace, the London Borough of Sutton lost 17.2 per cent of its office floorspace between 2000 and 2012, equivalent to a decline of 34,000 sq m of internal floorspace.

1 http://www.voa.gov.uk/corporate/statisticalReleases/120517_CRLFloorspace.html


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4.2 In the past four years, the loss of office floorspace appears to have continued at approximately the same rate as the long-term trend. Using gross floorspace figures, the London Office Policy Review 20122 stated that 3,000sq m of office floorspace had been lost between 2009 and 2012, equivalent to 2% of the total stock across the Borough. B1 stock converted to residential development across the Borough over the same period has given rise to 438 housing units (47 completed housing units, 194 housing units under construction and 197 housing units with planning permission but not yet implemented).3

4.3 In Sutton Town Centre, which is the location for the majority of office space,

the Council undertakes its own regular monitoring of the business accommodation and office vacancy rates. Between 2009 and January 2013, a total of 5,591 sq m of office space was lost to other uses leaving a total office floorspace within Sutton Town Centre of 165,399 sq m. Of this total, 128,706 sq m was occupied floorspace and 36,693 sq m (22 per cent) or 23 sites were vacant.4 However, as Table 1 shows, ten sites, 8,504 sq m of floorspace, have been vacant for less than four years and so may be part of the general churn of properties. It is accepted that 5-8% of office floorspace needs to be vacant to allow for the movement of businesses. A further four sites, 18,203 sq m of floorspace, have permission to convert to residential-led, mixed-use developments. In all four cases, it is suspected the lack of available development finance is stalling the sites.

4.4 Consequently, there is a residue of nine sites or 9,986 sq m that constitute

long-term vacant sites. Of these sites, three sites (or 56% of the floorspace) are floors within existing office buildings that are otherwise fully occupied. It should also be stressed that there is no planning history on these sites where conversion to residential has been refused. Therefore, as a result of previous planning policy and planning decisions, the long-term office vacancy rate is extremely low at 6 per cent of the total office floorspace in Sutton Town Centre.

Table 1: Vacant Sites within Sutton Town Centre

Vacant Site Floorspace (sq m)

Notes

SITES WHICH HAVE BEEN VACANT FOR LESS THAN FOUR YEARS

137-143 High Street 948

1-7 Mulgrave Court 922

Crest House 408

48-50 Grove Road 252

Unit 8 Tudor Court 223

14 Greenford Road 214

Unit 7 Tudor Court 207

164a High Street 109

Floor(s) of Group House 764

Floor(s) of UCB House 4,457

Sub Total 8,504

2 London Office Policy Review (Ramidus Consulting for the GLA, 2012), figure 8.8


4 Preliminary Results from the Sutton Town Centre Health Check (LBS, January 2013)


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SITES WHICH ALEADY HAVE PERMISSION TO CHANGE USE

South Point 8,528 Permission granted for a residential-led, mixed-use scheme of 254 residential units, retail and office. Permission lapsed

Sutherland House 8,324 Permission granted for a residential-led, mixed use scheme of 96 residential units, retail and a hotel

Herald House 1,107 Permission granted for a mixed use scheme of 6 residential units, retail and office

42 High Street 244 Permission granted of 8 residential units and retail

Sub Total 18,203

SITES WHICH HAVE BEEN VACANT FOR FOUR YEARS OR MORE

Floor(s) of St Nicholas House 2,749 Other floors are occupied

Floor(s) of Watermead House 2,082 Other floors are occupied

John Marshall House 2,055

66-76 High Street 1,111

Centrelink House 768

Floor(s) of Chancery House 758 Other floors are occupied

Smile House 197

46 Throwley Way 167

280 High Street 99

Sub Total 9,986

GRAND TOTAL 36,693

Source: London Borough of Sutton, 2013

Housing Delivery

4.5 Over the past decade, the Borough has exceeded its targets in terms of housing delivery. As the table below shows, the Borough has outperformed its London Plan-set target in seven of the past ten years and, cumulatively has exceeded its target by exactly 1,000 units or 30 per cent.

Table 2: Housing Delivery within the London Borough of Sutton

Year London Plan Target Delivery

2011-12 210 580

2010-11 210 327

2009-10 345 178

2008-09 345 396

2007-08 345 612

2006-07 370 470

2005-06 370 684

2004 370 364

2003 370 288

2002 370 406

Total 3,305 4,305


Recent Trends Key Facts

The London Borough of Sutton has already adapted to the changing market dynamics for commercial space The Borough has lost 17.2% of its office floorspace since 2000


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Between 2009 and 2012, converted office space yielded 438 residential units with planning permission across the Borough

Sutton Town Centre has only a few problem sites in terms of vacant office space In Sutton Town Centre, 36,693 sq m (22% of the total office space) is vacant. However, 8,504 sq m can be attributed to churn, 18,203 sq m has planning permission for conversion to residential use so only 9,986 sq m is long-term vacant.

The London Borough of Sutton has an exemplary record in housing delivery The Borough has exceeded its target by 1,000 residential units over the past ten years.

5 Future Trends 5.1 While past trends show that the London Borough of Sutton has adapted to the

changing market for office space. The Borough is also aware that its planning policies must be suitable for future trends.

Employment Trends

5.2 The London Office Policy Review 2012 forecasts growing and contracting sectors in the commercial sphere and also gives information as to whether boroughs are currently above or below the London average in terms of the proportion of office employment within a particular sector.5 As Table 3 shows, the London Borough of Sutton is relatively well placed to capitalise on

-represented in commercial employment terms in the professional, scientific and technical; information and communication; and administration and support services sectors.

Table 3: Forecast Sector Change and Existing Office Employment Share by Sector in the London Borough of Sutton

Sector Growing (+) or Contracting (-) Sector

Above (+) or Below (-) London Proportional

Average

Finance and Insurance - -

Professional, Scientific and Technical

+ +

Information and Communication

+ +

Real Estate + -

Administration and Support Services

+ +

Public Administration - +

Other Services + -

Source: London Office Policy Review, 2012

5 London Office Policy Review (Ramidus Consulting for the GLA, 2012), figures 7.1 and 7.8-7.14


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5.3 The London Office Policy Review 2012 also makes a forecast for office employment for each borough and in the case of the London Borough of Sutton it predicts a growth of 2,441 jobs between 2011 and 20316, which when converted into gross office floorspace is a growth of 33,437 sq m7 across the Borough. Finally, the London Office Policy Review 2012 also considers this increase of gross office space in terms of pipeline supply (ie floorspace with planning permission) and calculates that current supply is 7% below what is required to meet the 2031 demand.8

5.4 Therefore, it can be concluded that, while past trends have been for a

reduction in the amount of commercial floorspace, in the future the trend within the London Borough of Sutton is for a modest increase in the amount of commercial floorspace and employment.

Housing Trends

5.5 In terms of housing delivery, the Council is confident about meeting its future housing targets. A 15-year trajectory was calculated when the Core Strategy was adopted in 2009 and there is no reason to amend the trajectory

Five-Year Housing Land Supply Assessment for the period 2012-17 indicates the Council can identify sufficient deliverable sites to meet its future London Plan targets.9

5.6 However, the Borough is facing a major issue with the supply of and demand

for affordable housing. Four factors have contributed to cause a mismatch in supply and demand: (1) a fall in the supply of affordable housing; (2) a rise in the entry level rents for the private rented sector; (3) an increase in the proportion of non-pensioner households, who tend to need affordable housing more than pensioner households; and, (4) a squeeze on available finance for non-pensioner households.10 Therefore, using the Department of Communities and Local Government modelling, the need for affordable housing has risen from 1,047 units per annum in 2008 to 2,558 units per annum in 2011 and, using the alternative market balance model, the need for affordable housing is calculated to be 66% of the current London Plan overall housing target for the Borough of 210 units per annum, ie 140 units per annum.11

5.7 Whichever model is employed, the conclusion is clear: the London Borough

of Sutton, in common with many other London boroughs, has a demand for affordable housing that outstrips supply considerably.




9 https://www.sutton.gov.uk/index.aspx?articleid=2194

10 London Borough of Sutton Housing Needs Assessment (Fordhams & S Drummond-Hay, 2011),

paragraphs 6.49-6.58 11

London Borough of Sutton Housing Needs Assessment (Fordhams & S Drummond-Hay, 2011), paragraphs 11.3-11.8


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Retail Trends 5.8 In 2007, as part of the evidence base for its Core Strategy, the Council

commissioned Savills Hepher Dixon to undertake a retail study. The results of the study forecast the potential of an additional 3,273 sq m of convenience retail and 15,876 sq m of comparison retail.12 The study concluded Whilst there will be some flexibility in terms of the amount of floorspace to be accommodated in each centre, the retail strategy should ensure that the relative positions of the main centre are maintained with no individual centre seeking to capture a disproportionate share of the available floorspace

13 Therefore, there is also scope for an expansion of the retail offer across the London Borough of Sutton, but particularly in the largest of the centres, Sutton Town Centre.

Future Trends Key Facts

A modest rise in office employment is expected with a commensurate rise in office floorspace A growth of 33,437 sq m in office floorspace is projected across the Borough Current supply of office space is 7% below the predicted demand for 2031 across the Borough

The Borough is well placed to capitalise on expansions in the professional, scientific and technical, information and communication and the administration and support services sectors as it is already strong in these sectors

Housing delivery is on target but meeting the affordable housing need is challenging The forecast supply to meet affordable need demand ranges from 140-2,558 units per annum across the Borough

There is potential for an increase in retail floorspace An increase of 19,149 sq m of retail floorspace across the Borough could be accommodated, with the majority going to Sutton Town Centre

6 Council Planning Policy, Economic Strategies and Infrastructure

Schemes 6.1

the London Plan, adopted 2011; the Core Strategy, adopted 2009; the Site Development Policies DPD, adopted March 2012; and, the South London Waste Plan, adopted 2012

12

London Borough of Sutton Retail Assessment (Savills, Hepher, Dixon, 2007), paragraph 7.6 13

London Borough of Sutton Retail Assessment (Savills, Hepher, Dixon, 2007), paragraph 7.7


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London Plan 6.2 London Plan Policy 4.2 (Offices) states that the market for office

accommodation is changing and asks boroughs and other stakeholders support the management and mixed use development and redevelopment of

new development on viable business locations with good public transport, enhancing the business environment, including through mixed use redevelopment, and supporting managed conversion of surplus capacity to a 14

6.3 Specifically, with regard to Sutton Town Centre, London Plan Table A2.1 not

only classifies Sutton as one of only 12 Metropolitan Centres within the Capital but also classifies Sutton Town Centre within Office Guideline B.15

ovision could be promoted as part of wider residential or residential and retail/leisure mixed use development. This would be likely to entail a long-term net loss of overall office stock, partial renewal on the more commercially attractive sites and the managed change of use of

16 The categorisation of Sutton Town Centre as an Office Guideline B centre has subsequently been confirmed by the

London Plan Annex 2 category B status should be maintained, but the market 17

Core Strategy and Site Development Policies DPD

6.4 The Core Strategy supports the strategic direction of the London Plan with regard to office conversions. It drew on evidence from the Sutton Employment Land and Premises Review

18 The Core Strategy stated that there were opportunities for new office space through mixed use development in Sutton Town Centre and in the District Centres.

6.5 Core Strategy Policy PMP6 (Sutton Town Centre) promotes a balance of uses

and development including an expansion of retail and leisure uses and increase in the range and quality of the retail offer, enhanced office provision, development of a balanced and socially inclusive night-time economy and

-95% of the predicted growth in comparison floorspace within the Borough to be

19 In terms of the district centres, Core Strategy Policy PMP7 (Other District Centres and Local Centres) promotes the intensification of housing, shopping, retail, community and leisure facilities in Wallington, Rosehill, North Cheam and Worcester Park and expects a

14

London Plan (GLA, 2011), pages 116-117 15

London Plan (GLA, 2011), page 280 16

London Plan (GLA, 2011), page 285 17

London Office Policy Review (Ramidus Consulting for the GLA, 2012), paragraph 4.5.57 18

London Borough of Sutton Core Planning Strategy (LBS, 2009) paragraph 5.54 19

London Borough of Sutton Core Planning Strategy (LBS, 2009), Policy PMP6


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consolidation of the role of district centre in Carshalton and Cheam, where historic and cultural assets constrain excessive development.20

6.6 Site Development Policies DPD Policy DM36 (Office Provision through Mixed-

Use Conversion or Redevelopment) states directly how the Council currently deals with the conversion of commercial B1(a) uses to residential C3 uses. The policy is reproduced in the box below:

Figure 1: Policy DM36 from the Site Development Policies Development Plan Document

Policy DM36 - Office Provision through Mixed-Use Conversion or Redevelopment The Council will not grant planning permission for proposals involving the loss of existing office accommodation unless: Marketing Requirements

-let the accommodation have been

fully explored, both in terms of the existing layout of the building and as smaller/more flexible office units at appropriate market rents;

purposes; Development Requirements The proposals provide for a mixed use development that:

on site when the existing premises were fully in use, unless it can be demonstrated that such level of provision would not be viable;

, adaptable office floorspace capable of meeting the changing needs of small/business units;

residential development.


6.7 The justification for the policy explains that mixed-use schemes are the most

appropriate vehicle for upgrading office space and that mixed use schemes also provide employment in the retail and leisure sectors. The justification adds that the retention of 50% of previous employment levels is flexible, will vary between sites, is merely an indicative figure and will be kept under review.21

6.8 Therefore, planning policy is clear and unambiguous. The Mayor of London

and the Council consider that mixed use development is the most appropriate strategy, particularly for Sutton Town Centre, but both the Mayor and the Council are willing to be flexible in terms of what the market can provide and the constraints of particular sites.

6.9 In response to the economic climate, the Council has revised its Economic Development Strategy and the Council has raised the profile of economic

20

London Borough of Sutton Core Planning Strategy (LBS, 2009), Policy PMP7 21

London Borough of Sutton Site Development Policies DPD (LBS, 2012) paragraph 3.306


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officers, to promote business growth. A number of priority projects have been identified, including:

Creating a Life Sciences Cluster - To capitalise on the growth plans of the Institute of Cancer Research and the Royal Marsden Hospital, just to the south of Sutton Town Centre;

Strengthening Town and District Centres To create traders associations and networks, encourage Business Improvement Districts and business incubator sites; and,

Growing the Green Economy To join up the growing number of green business services in Sutton

6.10 Therefore, providing new or enhanced employment opportunities within Sutton

Town Centre and the district centres is a major Council priority.

Infrastructure 6.11 In terms of Public Transport Accessibility Levels (PTALs), Sutton Town Centre

and the district centres are quite well connected. Sutton Town Centre has a PTAL of 6a, which is the second highest that can be achieved in London, Wallington has a PTAL of 4 and most of the other district centres have a PTAL of 3. The Council is determined to improve public transport accessibility still further and so has been lobbying Transport for London, Network Rail, First Capital Connect and Southern for transport improvements. The lobbying has been largely successful:

Southern have agreed to increase capacity on their trains which serve Cheam, Sutton and Carshalton;

The Thameslink (First Capital Connect) service will continue to connect with the Eurostar terminal and the Council is making a case for a doubling of the frequency. This service stops at Sutton and Carshalton; and

Transport for London are undertaking feasibility and modelling studies with regard to extending the Wimbledon-Croydon Tramlink service to include Sutton and Rosehill. The Tramlink extension to Sutton is likely to bring many potential benefits to Sutton Town Centre in terms of business development as the original line did for Croydon when it was opened in 2000.

6.12 Therefore, Sutton Town Centre, in particular, and the district centres, to a

lesser extent, are highly desirable and sustainable locations for uses which attract a large number of people movements. The additional infrastructure that may be developed in the near future means that the centres, and particularly Sutton Town Centre, will be even more attractive for such uses.

Plans and Strategies Key Facts

The Mayor of London, the Council and the latest research all suggest mixed-use development is the appropriate approach in Sutton Town Centre

Sutton Town Centre has potential to accommodate significant retail growth

Current planning policy allows for the conversion of offices to residential provided the offices are genuinely vacant


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Current planning policy allows for flexibility in the proportions of uses in

mixed-use development

The Council has identified opportunities for increased economic activity in the life sciences sector and the green economy and is actively promoting these opportunities

The Council has lobbied for major infrastructure improvements on the basis of a vibrant mixed-use Sutton Town Centre and to assist a vibrant mixed-use centre

7 Justification for Criterion 1: The Scale of the Impact in Absolute Terms 7.1 Since residential land values are considerably higher than office land values,

the introduction of permitted development rights for the change of use from B1(a) to C3 will have the effect of pricing out office developments from Sutton Town Centre and the other centres. The Council has undertaken a brief survey of land values across the Borough for (1) flats and maisonettes per square feet, based on recent sales of properties within the Borough, including two sites which have been residential-led conversions of offices; (2) office space per square feet, based on currently marketed offices within the Borough; and (3) retail space per square feet, based on currently marketed shops within the Borough. The details of the survey are shown in the Appendix but a summary of the findings is shown in Table 4.

Table 4: Land Values within the London Borough of Sutton by Land Use

Land Use Range of Land Value (per sq ft)

Date of Survey

Residential £247-£402 Sept 2011-Jan 2013

Office (based on 9% yield) £167-£194 February 2013

Retail (based on 5% yield £206-£648 February 2013

London Borough of Sutton, 2013

7.2 As Table 4 shows, office land value is considerably lower than residential land

value. Retail land value for small to medium-sized shops is more variable as location plays a key factor in value. Therefore, the introduction of permitted development rights for B1(a) to C3 conversions will be a significant market incentive to dispose of office space for other uses.

7.3 The impact of the pricing out office uses could be significant not only in terms

of employment levels across the Borough and particularly in Sutton Town Centre but also the impact could also affect other use classes, the type of

promote new business sectors and infrastructure provision.


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Impact on Office Employment 7.4 The impact on office employment has the potential to be dramatic in Sutton

Town Centre for potentially very little gain. As Table 1 shows, ten sites have only recently become vacant, four sites (including the two largest vacant sites) already have planning permission or the principle established to convert to residential-led, mixed-use developments, leaving nine sites which may classed as vacant for structural reasons. Of these nine sites, three sites, 56% of the long-term vacant floorspace, comprise floors otherwise occupied office blocks and the total floorspace of the nine sites is 9,986sq m.

7.5 Since there has been no attempt by the owners of the long-term vacant sites

to redevelop their sites, the introduction of permitted development rights may not provide an incentive for the owners of the long-term vacant sites to change use but the introduction may provide the incentive for disposal of some of the 128,706 sq m of occupied office space.

7.6 The loss of a large amount of office floorspace would also have a knock-on

effect oleisure and retail sectors.

7.7 As the Council has already identified the long-term vacant office sites, it considers a more appropriate approach, than introducing permitted development rights for change of use, would be for the Council to continue to approach the landowners of the long-term vacant sites to outline the opportunities and possibilities that are available to them.

Impact on Retail and Leisure

7.8 The introduction of permitted development rights for B1(a) to C3 also threatens other land uses. The conversion of whole office blocks to residential use precludes the opportunity for Sutton Town Centre, and the District Centres, to develop their retail core.

7.9 As mentioned above, the London Borough of Sutton Retail Study identifies a

potential for 19,119 sq m of retail space by 2017 (3,273 sq m convenience and 15,876 sq m comparison)22. According to the Core Strategy23, 17,000-18,200 sq m of this additional 19,119 sq m is expected to be in Sutton Town Centre with the remainder in Wallington Therefore, the potential to maintain and develop Sutton Town Centre as a retail destination could be severely compromised by the introduction of permitted development rights for change of use from commercial (B1a) to residential (C3). The effect would be considerably smaller in Wallington.

7.10 Furthermore, the introduction of permitted development rights from B1(a) to

C3 will threaten the development of leisure uses within Sutton Town Centre and the district centres. The Council considers the development of leisure uses to be an important policy in maintaining and enhancing Sutton Town Centre as a Metropolitan Centre within London, especially as the High Street

22


London Borough of Sutton Core Strategy (LBS, 2009), Policies PMP6 and PMP8

Agenda Item 12 2

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retail sector is facing fierce competition from internet retailing. The London Borough of Sutton Retail Study, even though it was published in 2007, noted that town centres were under threat from the growth of internet shopping and

Town centres will need to adapt and become more leisure orientated. 24 Core Strategy Policy PMP6 (Sutton Town Centre) also promotes the growth of leisure uses in Sutton Town Centre.

Impact on Housing Development

7.11 As stated above, following extensive research and consultation prior to its Core Strategy, the Council was able to develop a robust 15-year Housing Trajectory which showed the Council was able to meet its long-term regional housing targets. Furthermore, the Council has a history of strong housing delivery and has demonstrated a sufficient number of deliverable sites in its Five-Year Housing Land Supply Assessment for the period 2012-17.25 However, there is a mismatch between the supply and demand for affordable housing. The introduction of permitted development rights would mean a considerable loss of potential supply of affordable housing as the Council would not be able to secure any affordable housing as part of the permitted development change. As a consequence, the Council targets for affordable housing would become even more challenging.

7.12 In numerical terms, given that the housing supply from converted office blocks

over the Core Strategy period is 1,247 housing units26 and the Council seeks a Borough-wide target of 50% affordable housing27, the introduction of permitted development rights jeopardises the delivery of potentially 624 affordable housing units. In Sutton Town Centre, the introduction of permitted development rights for B1(a) to C3 potentially jeopardises 424 affordable housing units. The Council believes that the short-term boost in housing supply, that the introduction of the permitted development rights is intended to bring about, may not lower house prices overall but will instead exacerbate the existing shortage of new affordable dwellings in the Borough and London as a whole.

7.13 Finally, there would be no control over the mix of housing development

dwellings and number of bedrooms to promote mixed and balanced communities.

Criterion 1 Key Facts

128,706 sq m of occupied office floorspace in Sutton Town Centre is being jeopardised for the sake of 9,986sq m of long-term vacant office space

The loss of mixed-use sites threatens the expansion of the retail offer in Sutton Town Centre in particular, and Wallington thereby jeopardising the

24


https://www.sutton.gov.uk/index.aspx?articleid=2194 26

Site Development Policies DPD (LBS, 2012), pages 99-101 27

Site Development Policies DPD (LBS, 2012), paragraph 3.233


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vitality of Sutton Town Centre and Wallington

The loss of mixed-use sites threatens the development of leisure uses,

vitality and offer in the face of internet shopping competition

The introduction of permitted development rights jeopardises the delivery of 624 affordable housing units, 424 of which are in Sutton Town Centre

8. Justification for Criterion 2: The Significance of the Adverse Impact at

the Local Authority Level or Wider

Impact on Employment in the South and South West London Sub-Regions and the South East

8.1 With a major junction on the south-east/south London rail network, Sutton Town Centre has been an obvious choice for the location of commerce and business and, particularly, office uses. Figure 2 shows that Sutton Town Centre draws its employees from across the London Borough of Sutton, a significant number from Croydon, despite Croydon Town Centre being seen historically as an office centre, and other London boroughs such as Merton, Kingston, Richmond-upon-Thames, Wandsworth, Lambeth, Southwark, Lewisham, Bromley, Bexley and even Camden. In terms of the wider south-east, commuters are drawn to Sutton Town Centre from Epsom, Dorking, Horsham, Woking, Redhill, Reigate and the Gatwick area.

8.2 Therefore, a significant loss of office space within Sutton Town Centre could

have a detrimental effect on the economies of south London, south west London and the South East or could displace commuters into the centre of London putting pressure on already overstretched rail and road infrastructure.

Impact on Retail Patterns in the South and South-West Sub-Regions and the South East

8.3 The inability to grow Sutton Town Centre as a retail destination could have an impact beyond the Bdesignation as Metropolitan Centre within London. As Table 5 shows, Sutton is a major destination for comparison good spending and is expected to remain a prominent comparison good retailing centre. It is only overtaken in the standings by White City, a Westfield development, Stratford, another Westfield development, Elephant and Castle, a major regeneration initiative, and Canary Wharf and Camden Town. Against other outer London shopping centres, it will maintain its position relatively.

8.4 In addition, Sutton Town Centre holds a significant market share in terms of

shopping destinations across south and south-west London and the South East. Figure 3 shows modelling which states that it is likely that 50% of shoppers in Sutton Town Centre are from the red area, 80% of shoppers in Sutton Town Centre are from the red and blue areas and 90% of the shoppers in Sutton Town Centre are from the red, blue and green areas. Therefore,


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Sutton Town Centre has a high proportion of shoppers from the London Borough of Sutton and parts of the London Boroughs of Merton and Croydon as well as the Surrey district of Reigate and Banstead. Sutton Town Centre is also likely to attract a certain number of shoppers from large parts of Surrey and from across south London. Figure 4 shows this influence across south London and the wider South East is expected to be maintained in the future.

8.5 The introduction of permitted development rights from B1(a) uses to C3 uses

schemes including retail uses. With constraints on the growth of the retail tant sub-regional shopping

destination is threatened and the existing retail uses and their employment are also threatened.

Table 5: Timeline Change in London Comparison Turnover Ranking, 2006-2031

Centre Name Class 2006 Rank 2031 Rank Change in Rank 2006-2031

West End International 1 1 No change

White City Additional - 2 -

Knightsbridge International 2 3 -1

Stratford Major 40 4 36

Croydon Metropolitan 4 5 -1

Kingston Metropolitan 3 6 -3

Bromley Metropolitan 5 7 -2

Kings Road East Major 8 8 No change

Ilford Metropolitan 6 9 -3

Romford Metropolitan 7 10 -3

Elephant and Castle District 216 11 205

Canary Wharf Major 15 12 3

Camden Town Major 14 13 1

Sutton Metropolitan 10 14 -4

Uxbridge Metropolitan 9 15 -6

Battersea Additional 278 16 262

Brent Cross Additional 19 17 2

Wood Green Metropolitan 12 18 -6

Harrow Metropolitan 11 19 -8

Croydon Purley Way Additional 13 20 -7

Consumer Expenditure and Comparison Goods Retail Floorspace in London (Experian for the GLA, 2009) Table 46, Page 86

Policy of the London Enterprise Panel

8.6 The London Enterprise Panel is the Local Enterprise Partnership for London and is chaired by Kit Malthouse, the Deputy Mayor of London for Business and Enterprise. In October 2012 at a special strategy meeting of the London Enterprise Panel, Malthouse presented Future?,28

this was to be achieved through improvements to skills and employment, support to SMEs, science and technology and infrastructure. He added that, in the European Cities Monitor, London came only 10th in the rankings of the Availability of . While Malthouse was surveying the situation at the strategic, regional level, it should be closely with those of the Council which wishes to promote the life sciences

28

http://www.london.gov.uk/moderngov/mgAi.aspx?ID=6579


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sector and the green economy. Therefore, the desire of the Council to retain o ensure

employment uses are not crowded out by housing development would appear

Figure 2: Spatial Distribution of Employees working in Sutton Town Centre

Source: Commuting Patterns in London by Qualification Level and Employment Location

(GLA Economics, 2009) Appendix B


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Figure 3: Sutton Town Centre 2008 Retail Catchment Area

Consumer Expenditure and Comparison Goods Retail Floorspace in London

(Experian for the GLA, 2009) Appendix 13, Page 341

Figure 4: Sutton Town Centre 2018 Retail Catchment Area

Consumer Expenditure and Comparison Goods Retail Floorspace in London

(Experian for the GLA, 2009) Appendix 13, Page 341


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Criterion 2 - Key Facts

Sutton Town Centre is an important employment centre for commuters across south London, south west London and the wider South East

Sutton Town Centre is an important retail destination, which could be expanded through mixed use development, for south London, south west London and particularly the wider South East

Economic Development Strategy, which economy, aligns with the strategy of the

Deputy Mayor of London for Business and Enterprise and the aims of the London Enterprise Panel. However, for the rebalancing to be successful, new business sectors should not be crowded out by housing development

9. Justification for Criterion 3 The Degree to which there is likely to be a

Strategic and Long-Term Adverse Economic Impact

Impact on New Employment Sectors 9.1 The loss of office space supply could have a long-term strategic impact on the

two areas of business the Council is currently promoting, namely the life sciences sector and the green economy, and on incubator units generally29. A lack of available office space across the Borough, and particularly in Sutton Town Centre, could result in a lack of available office space for these sectors

compromised. 9.2 In terms of life sciences, the Council intends to promote and assist the

nationally recognised Royal Marsden Hospital and the Institute for Cancer Research already have a large campus to the south of Sutton Town Centre and both organisations have plans for expansion. The Royal Marsden Hospital, which transferred many of its activities to Sutton following a major fire at its Chelsea site in 2008, has indicated it intends to retain many of the transferred activities in Sutton. Meanwhile, the Institute for Cancer Research is part-way through an £8 million investment programme in new scientific initiatives involving new staff and equipment. The Council believes there is scope for Sutton Town Centre to become a base for companies servicing and supporting the Royal Marsden

9.3 However, a lack of future office space puts this long-term strategy, which is

focused on a high-value growth sector of the economy, at risk.

29

http://sutton.moderngov.co.uk/documents/s25742/Opportunity%20Sutton%20Economic%20Growth%20Programme%20-%20the%20Priority%20Projects%202.pdf


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9.4 With regard to the green economy, the London Borough of Sutton has a long -developments

BedZed. A recent survey by Innovas Solutions for the Greater London Authority, entitled The London Low Carbon Market Snapshot, ranks the London Borough of Sutton as the 5th highest London borough for Low Carbon and Environmental Goods and Services employment by percentage30, with 5.7% of its working population involved in the Low Carbon and Environmental Goods and Services.31 The Council believes that this already constitutes a cluster and intends to foster networking and provide business assistance to help the cluster strengthen and expand. However, a lack of readily available, affordable office space may inhibit this strategy.

9.5 In terms of both the life sciences cluster and the green economy, most of the

companies involved are, or are likely to be, small or start-ups. Therefore, the relatively low office rents compared to the rest of London make locating in Sutton financially attractive. A lack of available and reasonably priced office space would compromise both these sectors and Sutton Town Centre has unique factors which would enable them to grow.

Impact on Housing, Retail and Leisure

9.6 Currently, the London Borough of Sutton offers a variety of housing types and tenures, which results in a mixed and balanced resident population. However, a significant number of flatted developments puts this balance at risk. The introduction of permitted development rights for the conversion of B1(a) uses to C3 uses could result in developments being built without conforming to the

standards. These include not providing developments in accordance with the Mayor of Lo standards for amenity space, play space, lifetime homes, wheelchair accessibility and sustainable construction and design. Instead, the change would result in a high number of small, private residential units and the occupants would be likely to work

centres.

9.7 Furthermore, it should be noted that the London Borough of Sutton 2011 Housing Needs Assessment found that three of the four household types in most need of housing in Sutton were those with children: lone parent families, 2+ adults with 1 child and 2+ adults with 2+ children. Developments not built

y to be suitable for children.32

30

Services comprise the following sub-sectors: Carbon Finance, Geothermal, Alternative Fuels, Wind, Building Technologies, Water and Waste Water, Photovoltaic, Alternative Fuel Vehicles, Waste Management, Biomass, Recovery and Recycling, Energy Management, Additional Energy Sources, Environmental Consultancy, Hydro, Air Pollution, Renewable Consulting, Contaminated Land, Carbon Capture and Storage, Noise and Vibration Control. Environmental Monitoring, Marine Pollution Control, Wave and Tidal 31

The London Low Carbon Market Snapshot (Innovas Solutions for the GLA, 2011) and http://www.nomisweb.co.uk/reports/lmp/la/2038431891/report.aspx 32

London Borough of Sutton Housing Needs Assessment (Fordhams & S Drummond-Hay, 2011), Figure S3, page ix


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9.8 -term impact as they would cease to function as centres and, instead, become dormitory settlements with residents using the retail and leisure offers of where they work rather than where they live.

Impact on Education Provision 9.9 Even though the accommodation is unlikely to be unsuitable for children, any

increase in the number of children within Sutton Town Centre is also likely to put a severe strain on education provision and financial resources.

9.10 Across the Borough, schools are having to deal with a large increase in demand for school places as a result of: (1) a trend of continuing high levels of birth; (2) a trend of in-migration to the Borough, which is based on the high

ools in School League Tables; and (3) a trend of fewer children being educated in the fee-paying sector.

9.11 School Capacity Return 2012 identified that

the central wards of Sutton, which include Sutton Town Centre, were the areas where the shortfall between supply and demand for primary school places was most acute. In the central wards, comparing 2004 and 2011, there was a 31.6% increase in births which would result in a shortfall of 295 primary schools places (10 forms of entry) in central Sutton.33 There would also be a latent effect in secondary education across the Borough with at least 4 forms of entry to secondary education required in 2016-17 and possibly 21 forms of entry to secondary education required by 2020-21.34

9.12 Therefore, any increase in the number of school-age children in Sutton Town Centre will exacerbate an already acute situation in terms of primary, and to a lesser extent secondary, school places.


Life Sciences Cluster , in conjunction with the Royal Marsden Hospital and Institute for Cancer Research, is likely to be hampered by a lack of office space

the green economy is likely to be jeopardised by a lack of office space

start-ups in the above sectors, and generally, as rents rise

settlements with little retail and leisure provision

33

School Capacity Return (LBS, 2012), page 8 34

School Capacity Return (LBS, 2012), page 1


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The type of housing likely to be provided from the introduction of permitted development rights would not address the household types in the London Borough of Sutton in the greatest need of housing

Sutton Town Centre is already the location of most acute primary school place need and education providers may not be able to accommodate any increase in school age children

10. Justification for Criterion 4 The Proposed Area of Exemption is the

Smallest Area Necessary to Address the Potential Adverse Economic Impact

Justification for Sutton Town Centre 10.1 The Council is proposing that Sutton Town Centre is exempted from the

permitted development rights for conversion from B1(a) to C3 use for a number of reasons. It has a relatively small amount of long-term vacant office stock, only 9,986sq m out of a total office floorspace of 165,399sq and is the focal point of the growth to deliver the Coun . The Mayor of London and the Council both believe that the most appropriate approach to dealing with the long-term vacant office space is to promote mixed-use development through the development management process. Sutton Town Centre also has the greatest potential for retail and leisure growth and this opportunity would be the lost as a result of the introduction of the permitted development rights.

10.2 Furthermore, the majority of the new affordable housing units from the

conversion of offices to residential-led, mixed-use development are expected to be in Sutton Town Centre. Sutton Town Centre also has an excellent Public Transport Accessibility Level and so is the appropriate location for employment uses. Future transport infrastructure improvements will also be

not preclude the conversion of offices to residential-led, mixed-use development. The exemption will allow the Council to continue to manage land use change as it has done successfully in the past.

Consideration of Other Centres

10.3 The Council considered requesting an exemption for its other centres. However, on reflection, it has decided not to pursue exemptions for locally specific reasons.

10.4 As Table 5 shows, office floorspace in Carshalton and Rosehill only contribute

a small amount of the total District Centre floorspace and so any office floorspace loss would Worcester Park had no vacant floorspace when the centre was last surveyed and Cheam had a low vacancy rate of 9%. The Council considers that these centres would retain their office employment regardless of the introduction the permitted development rights. North Cheam had a high vacancy rate but this was due to a single, large office block which had planning permission (now lapsed) to convert to a residential-led, mixed-use development.


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10.5 The Council had considered that Wallington would benefit from an exemption.

When surveyed, it appeared to have a large amount of vacant office space but, as with North Cheam, this was due to a single, large office block. This office block has since been converted into residential-led, mixed-use development. Furthermore, Wallington does not have the affordable housing, economic development, transport and infrastructure evidence that Sutton has to support an exemption.

Table 6: Floorspace in 2008

Centre B1 Vacant Floorspace

(sq m)

B1 Total Floorspace

(sq m)

% Vacant Floorspace of

Total B1 Floorspace

% of Total B1 Floorspace in District Centre

Carshalton 243 718 33 9

Cheam 650 7,182 9 36

North Cheam 3,234 8,286 39 31

Rosehill 0 424 0 3

Wallington 12,598 43,837 29 69

Worcester Park 0 2,153 0 10


10.6 Consequently, the Council considers Sutton Town Centre is the only

appropriate area for an exemption. The exemption area is only 57.94ha, which is 1.32% of the total Borough land area.


Sutton Town Centre has only a small amount of long-term vacant office stock but the proposed change could give rise to a disproportionate effect on existing occupied office space

Sutton Town Centre has the greatest opportunity for leisure and retail growth

Sutton Town Centre will produce the majority of affordable housing units from office conversion

Sutton Town Centre is the focus for economic development, public transport and infrastructure improvements

An exemption would preclude residential-led, mixed-use development


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11. Conclusion 11.1 Given the evidence presented in terms of past and future trends, the Mayor of

current B1(a) stock and other uses, it is considered that the criteria for an exemption from the permitted development rights for a change of use from commercial B1(a) uses to residential (C3) is justified and met for Sutton Town Centre.


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APPENDIX

Table A: Land Value Calculations for Flats and Maisonettes

Location Date Sale Type of Property Sale Price Area Land Value

Canon Court Wallington

May 2012 1 bed £151,995 404sq ft £376/sq ft

Centrale Hackbridge

May 2012 1 bed £178,000 550sq ft £323/sq ft

Centrale Hackbridge

May 2012 1 bed £189,995 550sq ft £345/sq ft

Genesis House Sutton

May 2012 1 bed £162,000 410sq ft £395/sq ft

Genesis House Sutton

May 2012 1 bed £165,000 410sq ft £402/sq ft

Canon Court Wallington

May 2012 2 bed £182,000 592sq ft £307/sq ft

Centrale Hackbridge

May 2012 2 bed £230,000 836sq ft £275/sq ft

Centrale Hackbridge

May 2012 2 bed £232,500 806sq ft £285/sq ft

Hamptons Worcester Park

September 2011 2 bed £270,000 725sq ft £372/sq ft

Nicole Lodge Carshalton

November 2011 2 bed £240,000 750sq ft £320/sq ft

Nicole Lodge Carshalton

November 2011 2 bed £250,000 750sq ft £333/sq ft

Manor Road Sutton

May 2012 3 bed £370,000 1,500sq ft £247/sq ft

Bracken House Sutton

January 2013 3 bed £310,000 876sq ft £354/sq ft


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Table B: Land Value Calculations for Offices

Location Date of Advertisement Rental Value Land Value

with 8% yield Land Value


with 10% yield

Chancery House Sutton

February 2013 £17.50/sq ft £218.75/sq ft £194.44/sq ft £175/sq ft

Old Inn House Sutton


Tudor Court Sutton

February 2013 £16.00/sq ft £200/sq ft £177.78/sq ft £160/sq ft

126 Carshalton Road, Sutton


Century House Cheam

February 2013 £16.00/sq ft £200/sq ft £177.78/sq ft £160/sq ft

Kent House Cheam


Source: London Borough of Sutton and centro.co.uk, 2013

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Table C: Land Value Calculations for Retail

Location Date of Advertisement Rental Value Land Value



with 6% yield

London Road North Cheam

February 2013 £10.30/sq ft £257.50/sq ft £206.00/sq ft £171.67/sq ft

Cheam Road Sutton


London Road North Cheam


Manor Road Wallington


Banstead Road Carshalton


Rose Hill Rosehill


Grove Road Sutton


Cheam Road Sutton


Stonecot Hill Sutton


Source: London Borough of Sutton and centro.co.uk, 2013

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London Borough of Sutton - Justification for Exemption for Sutton

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