Australia’s CBD offices transforming into residential
Office space is increasingly being turned into residential, according to JLL’s Pulse report, which notes that the Sydney CBD is leading the charge on this trend.
They noted that there are four points supporting this shift:
- Historically low residential mortgage rates
- Long term undersupply of dwellings
- Rising office vacancies, declining office rents
- Rising levels of offshore interest in the residential market
In Greater Sydney, developers are competing for sites, and demand for residential property is high, with a vast undersupply.
Softening demand for secondary office stock, as prime institutional grade stock becomes scarcer, has seen yields widen between the two. Understandably, office block owners are looking into their residential options and others to buy on the basis of conversions.
In 2013, they estimate that 46,940 square metres of national office space was withdrawn for residential redevelopment. This almost doubles that seen in 2012, with 25,794 square metres recorded, an increase said to be due to Asian influences. This trend is expected to continue over the next year.
DA approved sites for residential conversion in Sydney CBD:
Address | Precinct | Office GFA | Residential GFA | Units | Owner Origin |
19-31 Pitt Street | Core | 7,000 sqm | 4,607 sqm | 19 | Australia |
Goldfields House, 1 Alfred Street | Core | 24,097 sqm | 40,341 sqm | 197 | US 60% Netherlands 40% |
Coca Cola Amatil Building, 71 – 79 Macquarie Street | Core | 9,918 sqm | 12,819 sqm | Australia | |
Hudson House,127-131 Macquarie Street | Core | 12,168 sqm | 12,168 sqm | 12 | N/A - Strata |
161-165 Clarence Street & 304 Kent Street | Western Corridor | 5,408 sqm | 15,902 sqm | 220 | Australia |
The Castlereagh,141-149 Bathurst Street & 209 Castlereagh Street | Mid-town | 1,418 sqm | 4,957 sqm | 54 | China |
York & George, 379-385 George Street & 38-48 York Street | Mid-town | 10,178 sqm | 15,207 sqm | 199 | Australia |
Greenland Centre (Sydney Water Site), 115-119 Bathurst Street | Mid-town | 5,000 sqm | 66,720 sqm | 595 | China |
Source: JLL