Can the vacant office spaces in Sydney’s city centre be a solution to alleviate the housing crisis? – Top

New data shows persistently high office vacancy rates in Sydney’s city centre, prompting some to question whether empty spaces could be converted to provide much needed housing.

The latest figures from the Property Council of Australia reveals more than one fifth of office spaces in Crows Nest, St Leonards, Parramatta and North Sydney is sitting empty.

Office vacancies also remain high in the CBD, rising slightly to 11.5 per cent.

The Property Council’s NSW Executive Director, Katie Stevenson, said that’s due to more office space coming onto the market while demand remained weak, particularly in non-CBD business zones.

“We’ve seen higher levels of supply and when that’s combined with periods of weaker demand, it’s given us a very slight shift in vacancy rates for Sydney,” Ms Stevenson said.

Data shows vacancy rates for offices across Australia are at the highest level since 1995 — with only the Gold Coast and Canberra recording single digit scores.

Demand in the Sydney CBD is also in negative figures over the past six months, in a city that historically has businesses seeking more than 15,000 square metres of work space.

Strong appetite for conversions

The trend has some experts questioning whether those empty spaces could be converted into homes, taking some of the pressure out of the tight housing market.

Doug Southwell from architecture firm, Scott Carver, worked on the conversion of a 1970s commercial building on the edge of Hyde Park into residential apartments.

He said his firm had been fielding a rising number of inquiries from developers about potential conversion projects.

“It’s certainly become very popular as a topic, particularly with reduced demand for commercial space in CBDs, with work from home and other changing patterns,” the architect said.

Mr Southwell said office buildings were often well located and have high ceilings.

He also said reusing an existing building was typically quicker than building from scratch – an important factor in a tight housing market.

‘No silver bullet’

Converting these buildings into living spaces is not without its challenges.

Mr Southwell said office buildings aren’t constructed with liveability in mind, meaning creative solutions were often needed to get natural light and air into the centre of the building.

“It certainly relies on careful analysis of the existing structure, the orientation of the building, and seeing if there’s clever ways of extending it appropriately,” Mr Southwell said.

Professor Philip Oldfield, Head of the School of Built Environment at UNSW, agreed that as a housing solution, it’s “no silver bullet”.

He agreed that most office buildings have deep internal rooms with no natural light or ventilation.

“If we convert in wrong buildings, you’re going to end up with bedrooms with no windows,” Professor Oldfield said.

But Professor Oldfield said converting suitable buildings could be part of a broader solution.

“You’re going to provide some additional housing which we desperately need, but you’re not going to solve a crisis,” he said.

A more sustainable option

Professor Oldfield said one major benefit was sustainability.

“Cement is responsible for eight per cent of all CO2 emissions around the world. If cement was a country, it would be the third highest emitting country, behind China and the USA.”

Where those conversions are practical, he said the government should step in to incentivise developers.

“I think we should provide some kind of incentives, be they financial or floor space ratio, so you can add more area, more profit onto them,” Professor Oldfield said.

But the expert said new buildings can be future-proofed by ensuring they’re designed in a way that can be easily adapted from office to residential, and vice versa.

“Too often, we build buildings for now, forgetting they’re going to have a 50-to-60-year life span,” Professor Oldfield said.

“We have to remember that we’re designing for a very uncertain future and the office market could change quite dramatically, like we found in COVID.”