Data4Lunch: Unlocking the Potential of Adaptive Reuse for CBD Growth

Repurposing outdated commercial buildings into sustainable developments that meet the rising demand for residential, tourism, and modern office space is key to shaping the city's future, says a local business leader.

Speaking at the Adelaide Economic Development Agency (AEDA)’s Data4Lunch event, JLL Managing Director and Head of Capital Markets Ben Parkinson delved into how adaptive reuse can play an important role in a city’s economy.

Mr Parkinson said adaptive reuse should be forward-thinking, innovative and prioritise sustainability because more businesses have adopted net-zero carbon goals and high ESG (Environmental, Social, and Governance) office standards.

“In a post COVID-19 world, what do you want? You want activity.... , you want choice, you want technology, you want ease of access, you want to make sure everything works, and (that there is) flexibility in your office.

“You want collaboration—previously offices were very traditional and rigid, but now they have changed.” 

According to Mr Parkinson, more than half of all office buildings in the CBD were built at least 30 years ago, and most have fully depreciated.

This aging stock, although offering a good return on investment when fully tenanted based on original purchase price, presents a unique opportunity for creative redevelopment.

“We’ve got old office stock in Adelaide; there is no shying away from that, in fact, 53.5 per cent of office stock is considered secondary,” Mr Parkinson said.

“But 77 per cent of vacancies in the CBD are across just 17 per cent of buildings.

“So that says to me there is plenty of opportunity in that 17 per cent, whether that be a conversion to a more modern office or a living sector use … or even student accommodation or a hotel.”

The City of Adelaide, in conjunction with the State Government, runs the Adaptive Reuse City Housing Initiative (ARCHI), which aims to create new homes in underused Adelaide buildings.

It encourages repurposing existing structures to diversify housing options, address housing shortages, unlock revenue potential, improve building performance and revitalise city streetscapes.

The City of Adelaide has a population target of 50,000 residents by 2036, which requires an increase in housing supply.

Adaptive reuse has been recognised as one way to create housing outcomes, with added social, environmental and placemaking benefits.

Speaking at Data4Lunch, City of Adelaide Low Carbon and Circular Economy Manager David Bills said adaptive reuse also incorporates sustainability. 

He said businesses can also take advantage of a range of council sustainability incentives, some of which include cashback incentives for businesses that make green choices more accessible and affordable.

This incorporates solar PV, appliance electrification, energy storage, electric vehicle charging stations, insulation, switchboard upgrades and resource recovery.

“Sustainability is a really serious space for (council) and we think there is a very exciting future,” Mr Bills said.

To learn more about the City of Adelaide’s sustainability incentives, click here.

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