<
https://www.theguardian.com/australia-news/2025/oct/12/converting-empty-office-blocks-apartments-appears-over>
"Two years ago, state and local governments pushed to fast-track conversions of
near-empty offices into much-needed apartments to alleviate a housing crunch.
The promised panacea never eventuated.
Momentum to create homes out of empty offices has faded even as office
vacancies rise and housing shortages intensify.
Developers have not submitted a single application to turn an office into
housing in central Melbourne since 2023. Just one successful application has
been made in the CBD of Sydney, the country’s most unaffordable city.
Towers have proven expensive to refit and landlords have instead kept their
properties in the office market, awaiting either a return of workers or
government funding to make conversions stack up.
One landmark 2023 study found Melbourne had 86 city office blocks ripe for
redevelopment and converting just half of those would yield up to 12,000
apartments. The Victorian government promised to help facilitate the conversion
of the offices.
But commercial landlords have been dissuaded by the higher costs of conversion,
according to Ingrid Bakker, who led the research as principal at architecture
firm Hassell.
“In Melbourne, where there are a lot of buildings that are sitting quite empty,
we still haven’t really got that sort of traction yet,” Bakker says.
The owner of one of the office blocks instead chose to lease to new commercial
tenants after Bakker’s team found a refit of one of the 86 would barely break
even for a developer, with an estimated profit margin of 0.05%.
“There aren’t any developers out there that go: ‘Oh yeah, that fits with my
business plan, I want to make point-zero-something per cent profit,’” Bakker
says.
No applications have been made to create housing in any of the other 80-plus
towers, let alone the rest of the city’s 5m sq metres of CBD office space,
according to the City of Melbourne.
Commercial landlords at the other towers identified in the proposal have
instead refurbished the existing offices, continued leasing to business tenants
or withdrawn properties from the market."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
