Croydon’s office markets are set to benefit from the Chancellor George Osborne’s decision to charge market rents for Whitehall departments.
The move is expected to lead to government departments abandoning costly core locations to more sustainable accommodation, with the Financial Times suggesting Croydon and Stratford are best placed to benefit.
Mr Osborne has announced he is setting up a body to take ownership of government properties and act as the landlord in a bit to raise £1billion. The new landlord will be operational by 2017 with all central government land and property moving to the government property unit by 2021.
The Treasury says the move is aimed at encouraging greater efficiency but a knock-on effect could be freeing up some of London’s historic buildings should departments be forced to relocate in order to meet their budgets. Mr Osborne hopes to raise £4.5billion from the sale of government property and land over the next five years.
The report in the FT said: “Expensive London districts around the Palace of Westminster, which have been home to generations of policymakers, could be abandoned by the government if departments shift staff to cheaper outlying areas of the capital such as Croydon and Stratford.”
Only last month it was announced that Croydon had been earmarked as one of 13 regional centres for the HMRC Revenue and Customs.
Around 2,800 staff will relocate to the offices, probably in 2017, with bosses currently in talks over suitable sites.
The government is already one of the biggest employers in the town with Home Office and Land Registry offices in Croydon and one option would be an upgrade or redevelopment of the existing Lunar and Apollo Houses to create a hub in the town centre.
Several floors are still available in Canmoor and CarVal’s redeveloped Grade A Interchange offices near to West Croydon, although that has been filling quickly in recent months.
Meanwhile, Grade A offices are currently being built by Stanhope and Schroder as part of their Ruskin Square development. An anchor tenant is still being sought for the 10-storey scheme.