A PLUSH office block in a gated courtyard is set to be converted into up to 50 flats after being sold for a seven-figure fee.

Russell House in Brighton is set to be converted into flats after being sold to residential developers well in excess of its initial £7.5 million price tag.

The 34,000 sq ft property, which was only refurbished in 2012, is the latest city centre office space to be converted into housing.

A report lost year revealed that 800,000 sq ft of office space had been lost to residential within two years of a national relaxation of planning laws - despite local restrictions aimed at preventing wide-scale loss.

Property agents Stiles Harold Williams said there was “very strong interest” and several bids by both residential developers and office investors for the freehold of the Grade A office building close to Churchill Square.

The office was most recently occupied by Bupa Global until an international reorganisation of the health insurance giant.

Emma Hards, associate for Stiles Harold Williams, said the city is currently experiencing the lowest amount of office availability for the last ten years which was causing difficulties for expanding occupiers in the city.

She added that a vast amount of the available stock is not Grade A quality and that Russell House would now play a part in helping to meet the city’s housing shortage instead.

Property consultant Ed Allison-Wright said Russell House might have been less attractive to commercial buyers due to its distance from the railway station and large size which have required it to be broken up into smaller spaces.

But he argued it was not necessarily more profitable for developers to convert commercial space into residential.

He added: “In general though, this should be the exception and shouldn’t be seen as setting the tone.

“The city centre needs to be populated with high quality office space otherwise it will become dormant and no one wants that, not even residential landlords would want that.

“What has happened with low quality commercial space being converted to residential, it has boosted the market to the point that we have developers talking about speculative office development for the first time since 2008.”