The challenges facing vacant office block retrofitting

With high office vacancy rates and Melbourne’s aged population set to nearly double by 2036, adaptive re-use of vacant offices into retirement living could help Melbourne be more supportive of its older residents. 

But the only example of such a development in Melbourne is The Alba, which saw the developer Australian Unity convert the commercial office space into the city’s first high-rise retirement home.

The 15-story facility, located in South Melbourne and now transformed into 155 residences, successfully opened its doors in 2023 however there was a range of construction challenges faced by the developer. 

For similar developments to go ahead in Southbank and in other areas of the City of Melbourne, some industry leaders argue planning authorities need to redefine regulations for adaptive re-use. 

Australian Unity living sector developments head Sarah Mahmoud said that The Alba was a complicated project because of having to take the existing conditions of the building into account when designing and implementing the facility’s necessary alterations. 

One of the biggest challenges according to Ms Mahmoud was trying to understand what changes needed to be made to the building that would also meet the current Australian building code of requirements, which is written for constructing new buildings. 

“The building surveyor and the engineers needed to make lots of judgment calls on what needed to be updated and what was suitable to remain in place,” she said.

“The challenge with that is that we're really quite reliant on the consulting team.”

Ms Mahmoud said that getting approval for the development from the City of Port Phillip was made easier due to a lot of the building’s footprint and car parking provisions already being in place. 

However, for similar developments to go ahead more frequently, she said there needs to be a greater level of guidance surrounding what must be done to comply with the present building code. 

A report published by the multinational architecture firm Hassell outlined ways that Melbourne’s vacant office buildings could be turned into residential buildings.

The report found that there are roughly 90 buildings that were ripe for adaptive re-use in Melbourne's CBD, and should half of these be converted to residential purposes, up to 12,000 new homes could be supplied. 

In order to make adaptive re-use a widely used practice the firm suggested introducing site-specific discretion within the existing Melbourne Planning Scheme Amendment C270. 

This would involve an overhaul of the central city floor area uplift scheme to reduce incentives for new office floor area and introduce significant new incentives, such as increases in building heights, for adaptive reuse developments on a case-by-case basis.

Introducing this amendment was one of Nick Reece’s Lord Mayoral electoral commitments, alongside a suite of policy changes to “turbo-charge” the conversion of city offices to homes. 

If re-elected, Cr Reece promised to slash council rates for successful office-to-residential conversions and to provide a dedicated end-to-end Planning and Building Assessment Service for any office to residential conversions, including a tailored pre-application service.

He also announced that for the first five projects he would deliver a grant that would be based on how much upfront embodied carbon is saved. •