Saving Our CBDs: Architect’s Blueprint Paves Way for Office-to-Resi that Works

In Melbourne’s CBD, where rows of half-empty office buildings stand, architect Callum Fraser sees possibility where others see obsolescence. Now, the founder of Fraser and Partners is challenging the prevailing opinion that converting vacant offices to residential spaces isn’t viable. “I tour the city now and just feel this incredible absence of people and creative business,” Fraser tells The Urban Developer . “And I feel like it’s just waiting to be revitalised.” While Melbourne Lord Mayor Nicholas Reece has spoken about incentivising office-to-residential conversions , Fraser argues the existing regulatory framework prevents meaningful development, despite what he estimates are 30,000 potential homes in the city’s empty office spaces. A report by design firm Hassell, Radical Re-Use: From Office to Home, shows 86 office buildings in Melbourne’s CBD could be converted to residential use “using about half the embodied carbon compared to demolishing and rebuilding on the same site”. Hassell commercial and workplace sector leader Ingrid Bakker tells The Urban Developer that even if just half of these were transformed, developers could create 10,000 to 12,000 new apartments. “There are many reasons that people are not converting those old office buildings,” Fraser says. “Those reasons are not to do with lack of desire. It’s mostly because there are regulations stopping us at every point.” ▲ Fraser says there is a huge amount of building stock that could become a problem if it continues to be empty. Finding opportunity in empty buildings Fraser has created a blueprint that breaks down the cost structure that makes these conversions financially compelling. He says the cost of new homes typically divides into four equal parts: structure (25 per cent), facade (25 per cent), services (25 per cent), and fitout (25 per cent). By preserving existing structures and facades in office conversions, developers could immediately cut build costs by half. At about $6000 a square metre for new construction, a typical 50sq m home costs around $300,000 to build. Fraser’s approach could reduce this to $3000 a square metre or less. A 50sq m affordable housing unit rented at $600 per square metre per week could generate $156,000 over five years, yielding a return on investment of 104 per cent, significantly outperforming traditional office assets with a 60 per cent RoI over the same period. The post-pandemic impact on Melbourne’s office market has created an unprecedented opportunity, with capital values in the CBD declining by an average of 23 per cent between 2022 and 2024. Vacancy rates for A and B grade offices now range from 22 per cent to more than 80 per cent in some buildings, leaving 1.5 million square metres of unleased and underutilised office space ripe for conversion. ▲ Fraser counts a total of 1.5-million square metres of unleased and underutilised office space across the CBD, equating to 31,000 homes of 50 square metres. Fraser says if the authorities removed tax burdens and regulatory barriers, “most of these would be renovated tomorrow”. “We’d be putting dwellings on the ground for 25 per cent of the cost of new construction. It’s a big difference.” Removing regulatory roadblocks Fraser identifies three main barriers to these conversions. First, is BADS—Better Apartment Design Standards—which require energy upgrades when changing a building’s use. “They’re saying, because we built it as an office building, you need to renovate it so that it’s fully up to scratch, which means you’ve got to take all the windows off and throw them out, when they’re doing a perfectly good job of keeping the water and weather out.” The second barrier is structural compliance. “These buildings were built before the earthquake code existed … so you can’t retrospectively adapt them without stiffening their foundations and adding a whole lot of internal bracing “By the time you’ve done that, you might as well pull it down, even though there’s nothing structurally wrong with it.” Fraser says that “if you’re just refurbishing them, you could be handing one of these projects over in six months”. “Quite often, once you strip off all the plasterboard and all the internal fitouts, the structure is great and very modern. And we could supply 31,000 new dwellings if we could leave the concrete the way it is and the windows the way they are. That’s 50 per cent of the cost of supply,” Fraser says. ▲ If we could leave the concrete the way it is and the windows the way that they are. That's 50 per cent of the cost of supply: Callum Fraser. There’s also a compelling environmental case. “New homes contain 314kg of carbon a square metre. So, 1.5-million square metres of stock equates to 471,000 metric tons of carbon—equivalent to 1 per cent of all the trees in Victoria,” he says. The third major hurdle is approval timelines. Research by design firm Hassell suggests conversion projects could be completed up to 12 months faster than demolish-and-rebuild projects if approval processes were streamlined. The state fast-tracking planning approvals for high-density housing developments in selected metropolitan hubs helps, but Fraser believes an abandoned framework could provide the clearer guidelines needed to streamline approvals for these projects. “In Victoria, we used to have an adaptive reuse handbook, and the Melbourne City Council had it. And then they withdrew it,” he says. “Now, in Adelaide, they have a great one. And they are picking up all the projects they should pick up on that we’re not.” Fraser is convinced that with relatively simple regulatory changes, and some demonstrative examples, developers would quickly embrace adaptive reuse. The Queens Road prototype Fraser’s Queens Road proposal involves adapting a largely vacant office building into about 200 independent living units and accommodation for 24-hour support staff. The conversion would maintain the distinctive concrete waffle ceilings and generous heights, turning a liability into an asset. “You get 3.2m ceilings, with a beautiful concrete waffle in them. The windows are a bit smaller, but you get the extra 30cm there in height. And because it’s cheaper, we can design bigger units at the same or lower cost.” ▲ “The city needs new life without new buildings,” Fraser says. His firm has developed an approach to conversions that “retrofits one floor at a time”, maintaining income streams during transformation while minimising disruption. “It doesn’t use every square millimetre of space in a perfect way, but it makes it manageable for existing office tenants, for existing office to work your way out of it,” Fraser says. Fraser says conversions should target three key demographics: young people/students, older people, and new immigrants, housing them near the CBD rather than relegating them to the city’s outskirts. He envisions vibrant mixed communities, citing a real-life example of a Fraser building where he saw young, tattooed people sharing rooftop hot tubs with elderly residents, including an older Australian woman learning Chinese from younger people—creating genuine cultural exchange. Fraser’s designs embrace adaptability at their core. His plans include strategic plumbing layouts that allow for multiple configurations, enabling a single space to function initially as separate studio apartments that can later be combined into larger units. “That’s what the benefits of existing buildings can provide because you’re not stuck trying to reinvent all the design language,” Fraser says. “You don’t invent a new architecture every Monday morning. You can just try to solve this one little thing: how does a building grow and change through time? How does it meet the changing demands of its community that it serves?” At a recent meeting about the Queens Road project, Fraser told developers he could swing a 21-day approval turnaround for the building refurbishment. “They looked at me and laughed, rolled their eyes, and said more like ‘10 to 12 months,’” he says. “But because it’s a refurbishment, and the way we’ve drawn it, in theory, with the regs as they are, we should be able to get an urgent approval.” ▲ An early draft rendering of the Fraser and Partners Queens Road adaptive reuse project. Fraser says the construction industry is at a standstill—talented professionals are stagnating rather than producing and that is dragging out projects due to fundamental structural obstacles in the regulatory environment. “We have a very creative, opportunistic development industry that would all pile in around this opportunity,” Fraser says. “That’s one thing that you can rely upon: their intelligence and their opportunism. And then like having that great industry behind you, trying to solve your social housing problems, that would just do it.”

Saving Our CBDs: Architect’s Blueprint Paves Way for Office-to-Resi that Works

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