Designing thriving office buildings whilst vacancies are high

As Australian capital cities continue to experience rising office vacancy rates, some old office buildings are receiving a new lease on life and in return, achieving high occupancy, despite the state of the struggling sector.

As Australian capital cities continue to experience rising office vacancy rates, some old office buildings are receiving a new lease on life and in return, achieving high occupancy, despite the state of the struggling sector.

We sat down with our National Managing Partner, Nik Tabain, to discuss how adaptive reuse can bring buildings to life, exploring the design philosophy and strategies implemented at a recently completed Gray Puksand project on Melbourne’s once booming St Kilda Road, which has since achieved high occupancy.

Adaptive reuse refers to the process of retrofitting an existing building asset to serve a new purpose, using the existing structure and floor plates to provide a sustainable alternative to demolition and new construction there is a growing opportunity for established office towers to be repurposed to meet the changing demands of the modern workforce.

“Most commercial buildings have a lifespan of 50-60 years, and much of the stock in major Australian cities is coming to the end of this window.

This gives us a multitude of opportunities to breathe new life into these buildings and deliver innovative, contemporary commercial spaces designed to meet the current and future needs of 21st-century work.”

Working within the confines of an existing building can pose a number of challenges throughout the design process. Many aging assets require extensive structural remediation to meet current construction codes, while established floorplans and infrastructure offer limited flexibility in design compared to a new build.

Whilst the process can impose limitations; they are far outweighed by the environmental and social benefits. According to JLL Australia, adaptive reuse projects typically achieve carbon emission savings of 40%-70% compared to new projects, offering the construction industry, one of Australia’s largest polluters, a sustainable and future-focused solution to meet the demands of Australia’s growing population.

Through the preservation of facades and architectural features, adaptive reuse can also help maintain the cultural and historical value of prolific older buildings whilst maximising the social and commercial value of the asset in the modern market.

Our adaptive reuse of 412 St Kilda Road is a seamless blend of history and innovation, resulting in a contemporary commercial building that has achieved a high tenancy of existing levels. This is a particularly notable achievement in a commercial corridor currently experiencing an all-time high vacancy rate of 25.5%.

412 St Kilda Road has been home to the building’s sole tenant, Victoria Police since its completion in the early 1980s. Their move to the current headquarters in Spencer Street left the building in desperate need of revitalisation.

“There was an empty brutalist tower sitting on the fringe of St Kilda Road, right opposite the soon-to-be-completed Anzac Station public transport interchange. With this unparalleled location, we saw the opportunity to transform the building into a premium commercial offering.”

Gray Puksand embarked on a design transformation of the entire building, repositioning it as an A-grade experience for tenants. The project included the introduction of state-of-the-art amenities, new end-of-trip facilities, a business lounge and a café.

A key accomplishment of the refurbishment was the delivery of a further 4,200 square metres of Net Lettable Area (NLA), ensuring the ongoing commercial viability of the building. This was achieved through the addition of 2 new floors on top of the building, as well as by converting 3 levels of existing car parking into office space.

As our cities’ outdated and underutilised commercial towers increasingly struggle to retain tenants, adaptive reuse emerges as a compelling solution to the challenge of high office vacancy rates.

“412 St Kilda Road’s exceptionally high rate of occupancy speaks volumes about the value of adaptive reuse in the current property market. It demonstrates a clear demand for well-positioned commercial spaces that cater to the evolving needs of modern businesses.”

According to Nik, the process can offer commercial landlords a future-proof way to enhance property values and attract a diverse mix of tenants, ensuring a steady stream of rental income in the face of turbulent industry conditions.

“Embracing adaptive reuse is a forward-thinking solution that will promote the financial and social prosperity of Australia’s commercial property landscape for years to come,” he concluded.

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