Ageing office towers repurposed for student housing

Colliers Queensland research manager Pragya Sharma says finding a new purpose for an ageing building involves more than simply identifying vacant space. For example, converting an office tower into apartments might seem straightforward, but buildings designed for desks and meeting rooms aren’t necessarily suited to kitchens, bathrooms and bedrooms.

“Adaptive reuse is not simply about whether an older building can physically be converted – it is about whether the building, its location and the end use all stack up commercially,” Sharma says.

Floorplate and layout challenges

Large office floor plans that comfortably accommodate rows of desks can be difficult to divide into self-contained apartments with natural light, ventilation, kitchens and bathrooms.

“An existing office floorplate may look efficient from an office perspective but become much less efficient once you need to introduce windows, balconies, kitchens, bathrooms and separate residential entries,” Sharma says.

Student accommodation can present fewer obstacles because smaller rooms and communal facilities give developers more flexibility when converting existing layouts.

Hotels offer another possibility, although developers must accommodate guest rooms alongside reception areas, kitchens and other facilities.

Location is equally important: buildings close to universities and major transport connections are potentially well suited to student accommodation, while other CBD properties may support hotels or mixed-use developments.

Brisbane’s 41 George Street offers a striking example of how an ageing office building can find a different purpose.

Completed in July, the conversion of the 27-storey former Queensland government CBD office tower has delivered 1182 student beds, making it Australia’s largest office-to-student accommodation conversion.

Rather than demolishing the building, developers Dexus and Marquette Properties retained and adapted much of its existing structure, including the central lift core and facade.

There can be substantial financial benefits in finding new uses for ageing buildings.

Colliers’ research into development opportunities ahead of the Brisbane 2032 Olympic and Paralympic Games suggests adaptive reuse can reduce construction costs by around 20 to 25 per cent compared with new construction, in favourable circumstances.

The potential savings largely come from retaining major structural elements, including foundations, concrete slabs and frames, rather than rebuilding from scratch.

“Retaining those elements can reduce construction costs and materially shorten the delivery timeframe,” Sharma says. “But the construction saving is only one part of the equation. The underlying value of the asset and the end use are equally important.”

Construction savings and feasibility risks

However, the potential benefits of adaptive reuse can quickly disappear if a building requires extensive upgrades or the proposed new use fails to attract sufficient demand.

“Older buildings may require substantial upgrades to plumbing, electrical systems, HVAC, fire safety, accessibility and vertical transport to meet the requirements of a new use,” Sharma says.

Planning restrictions can add complications, particularly when local zoning does not permit the proposed development.

Even if a building can be converted relatively cheaply, the finished property still needs enough demand to justify the investment.

“A building might be relatively inexpensive to convert, but if there is insufficient demand for the proposed end use, the project may still not stack up,” Sharma says.

Despite these challenges, rising construction costs and growing demand for alternative accommodation are encouraging owners and developers to take another look at their existing properties.

Sharma expects adaptive reuse to become increasingly important, although it will remain a selective approach rather than a replacement for new development.

“The next step is for owners and developers to look beyond the traditional office use and consider what the building could become,” she says. “Some assets will be better suited to residential, others to student accommodation, hotels, education or mixed-use.”