Article | Adaptive Spaces
Repurposing: How UK cities are evolving
May 28, 2025 5 Minute Read
The UK’s office market is one of the most competitive and well-established in real estate, accounting for 37% of the UK’s total real estate investment since 2003; the highest proportion of any real estate sector. UK office-based employment currently stands at 11.8 million and the major city office markets tracked by CBRE encompass 383 million sq ft of office stock. London is the largest of all the markets, accounting for 234 million sq ft of this office stock. But there are 8.7 million employees working in office-based sectors outside of London and 149 million sq ft of office stock which is situated within the UK’s regional cities. Office transactions outside of the capital have accounted for 37% of investment volumes in the sector since 2015; averaging c.£7 billion per year.
Despite a backdrop of economic and political uncertainty in recent years, the office sector has remained relatively resilient. It has remained the dominant sector in the UK by real estate investment performance (transaction value) in the last five years (26%). But the dominance of offices is reducing compared with a decade ago, when volumes accounted for 44% of total UK real estate investment. This is due to the growth of other sectors in the UK rather than a structural change in office market activity. There has been an emergence of new segments such as multifamily housing, boosting residential investment volumes to £11bn per year on average during the last five years.
This trend reflects the ongoing housing demand and supply imbalance recognised by the Government, which underpins its 1.5 million house building target. Similarly, investment in industrial assets increased significantly following the sector’s surge in occupational demand around the pandemic. Industrial and logistics accounted for 22% of total UK property volumes in the last five years, followed by the living sector at 21%.
The office challenge and case for conversion
Despite being a relatively resilient sector, office markets globally are facing challenges. Both landlords and occupiers have become increasingly focused on the quality of their buildings, driven by the growing importance of sustainability and the re-calibration of office attendance post-pandemic. Consequently, while well-located, high-quality and amenitised office stock has performed strongly, poorer quality offices and secondary locations have struggled to sustain occupational demand. As a result, there has been an increasing polarisation by quality across the market. Although there are some initial signs of rebalancing supply with new development completions and return to office mandates, secondhand offices still dominate the availability in Central London and key regional cities, accounting for 71% of the market. In contrast, space which is newly developed or comprehensively refurbished and is ready for occupation accounts for 18% of total supply; within which, there are only 13 buildings with more than 100,000 sq ft available.
Refurbishment is increasingly becoming the focus to restore this imbalance, as demolishing and building new offices becomes more challenging due to tightening planning restrictions and economic viability. Particularly in CBD areas, some secondary assets are being repositioned to support the relative scarcity of best-in-class office stock. There are even some examples of repurposing non-office buildings to support the demand for high-quality offices. A notable trend in recent years is the transformation of large department stores into offices and mixed-use destinations, such as the reimagination of Manchester’s former Debenhams, Birmingham’s former John Lewis, and several schemes currently under construction on London’s Oxford Street.
Increasingly, lower quality offices that have remained unlet for long periods are being repurposed for other uses. Particularly where office demand is weaker, or there is a demand-supply imbalance for other asset types, converting excess offices to other uses could be the best option. Although this can be costly, it can provide an economically viable solution, particularly where the structural form of an office building lends itself to becoming another use.
The extent of conversion underway
Our previous research showed a large quantum of office transactions being purchased with the intention of changing the use in Central London and this trend has continued. From 2022 to 2024, a total 3.3m sq ft stock was sold for £2.5bn, with the intention of conversion to a range of alternative use types; notably to life sciences, hotels, student accommodation, and residential assets.
The data for key UK regional cities demonstrates similar trends. From 2022 to 2024, ten of the UK’s largest regional office markets have seen 2.6m sq ft of office stock purchased with the intention of change of use (£0.9bn of transactions).
Figure 1: Office buildings bought with the intention of changing use* in key UK cities, sq ft and value, 2022-2024
*Charts based on sq ft and purchase price data available
Outside of London, Cambridge has seen the greatest degree of intended office conversion, following £439m worth of sales during this period. This total largely reflects the sale of £328m of office stock in one year (433,278 sq ft) during 2022. The value of buildings traded in the Oxford market was also relatively high, with seven deals over the three-year period totalling c.£211m (358,107 sq ft). Meanwhile there were nine transactions in Leeds totalling 425,353 sq ft, but at a lower value of c.£69m.
The intended use for the conversions also varies across the cities. For example, the leading trend in Oxford and Cambridge has been change of use to life sciences; demonstrated by the purchase of c.1m sq ft for conversion across the two markets. Moreover, the transactions in these two cities alone mean that life sciences ranks as the largest sector for intended office conversions in the regional UK cities during the last three years. This, combined with the even larger component of office to life sciences transactions in London, aligns with the clustering of life sciences demand within the Golden Triangle. Office conversions have helped bridge the supply gap in the life sciences sector, which had been constrained by a limited pipeline until this year.
In Birmingham, the dominant alternative use type has been education. All but one of the recent sales resulted from education providers themselves purchasing offices to convert into new facilities. The driving transaction was the £25m (189,053 sq ft) acquisition of Birmingham City Council’s previous headquarters at 10 Woodcock Street, which they intend to use for schools in business, law, and vision sciences and a new Aston Integrated Healthcare Hub. As a thriving university city, the remaining sale was an office asset due to be converted to student accommodation.
In Edinburgh, all five offices purchased with the intention to change use were expected to change to hotels – including the purchase of Capital House by Whitbread and of 9-10 St Andrew Square, which is expected to become a Point A hotel subject to planning consent. This is not surprising, given that Edinburgh has repeatedly received more inbound overnight visitors than any other UK city outside of London. Room occupancy levels are high, hitting 84.5% in hotels in 2024 and c.91.7% in guesthouses / bed and breakfasts in 2023. Combined with the intended conversions in London, repurposing to hotels accounts for the second largest alternative use for offices – following life sciences – across the full sample of major UK cities.
Across the UK’s regional cities, converting offices to residential was the second largest alternative use, with 0.9m sq ft of space sold for intended conversion. This trend was seen broadly, across more than half of the cities in our analysis. Given the UK’s well-documented housing shortage, it’s no surprise that office to residential conversions are being explored as a potential opportunity to boost the country’s housing supply.
Figure 2: Office buildings bought with the intention of changing use* in key UK cities, sq ft, by alternative use type 2022-2024
*Charts based on sq ft and purchase price data available
Wider market dynamics
Despite this recent spate of conversion, change of use transactions are still only visible on a limited proportion of the total office stock. Oxford and Cambridge were the only cities where volumes accounted for a notable proportion of the existing stock; 8.5% and 6.4%, respectively. In the remaining markets, sales bought with the intention of changing use have represented less than 4% of stock.
Figure 3: Offices purchased with the intention of changing use*, as a % of total market stock in key UK cities, 2022-2024
*Charts based on sq ft and purchase price data available
There are several reasons why these proportions may be relatively low yet there is still a large amount of secondhand office space being marketed across Central London (15m sq ft) and the UK’s major regional cities (15.6m sq ft).
The period between 2022 and 2024 has been defined by weak investment volumes and high construction costs for most asset types, which might have contributed to the modest number of intended conversions.
Additionally, there are multiple reasons why conversion is not always the best way to repurpose secondary offices. For example, there can be protections in local plans or sector-specific requirements (such as desired office floor-to-ceiling heights or second staircases requirements) which impact viability. There is still demand for high-quality offices which needs to be met, and as occupiers continue to bring their employees back to the office, there is scope for this to increase further.
Some existing owners may have repurposed their properties without a sale taking place, so there are instances of conversion which won’t appear in our transaction data. Nonetheless these decisions are likely to have been limited by the same high construction costs and viability constraints. These examples have not significantly impacted the market yet, as there remains an over-supply of low-quality offices.
While a widespread trend shift is unlikely, we anticipate that there will continue to be individual scenarios where conversion is applicable. In 2025, there have already been further sales and more assets placed under offer subject to planning. A boost to the broader investment market could further stimulate the conversion of offices where circumstances are favourable.
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