More than 100,000sqm of CBD office stock could be the key to bringing down Perth’s retail and office vacancy rates, which remain the highest in the nation.
According to research by commercial real estate agency JLL, converting office buildings with vacancy rates of more than 30 per cent that had little to no leasing activity during a three-year period into residential apartments could significantly boost the CBD’s core population, which lags behind every other capital city in Australia.
It has identified 110,000sqm of Perth CBD office stock in centrally located precincts that could be converted to provide 1570 new apartments and house about 2500 people, which would make the city centre a more vibrant precinct while also addressing housing supply issues plaguing the State.
According to JLL, Perth’s current position as the 12th-most liveable city globally could be improved by an increased CBD population, which is markedly lower than higher ranking cities including Melbourne and Sydney.
“Considering Perth ranks highly as one of the most liveable cities in the world, Perth’s CBD office and retail vacancy rates are both significantly higher than cities that appear above Perth in the Economist Intelligence Unit’s Global Liveability Index,” WA managing director of JLL Angelo Amara said.
JLL analysed unlettable office buildings in the Perth CBD and assessed unused existing buildings located above existing ground-floor retail stores in the city centre that could create residential dwelling stock. It found about 11 per cent, or 205,500sqm, could be observed for adaptive reuse purposes, such as residential activation.
While almost 50 per cent of the stock is in the East Perth precinct where there is already a significant portion of residential housing, JLL economist Ronak Bhimjiani said about 110,000sqm of Perth CBD office stock was situated in more centrally located precincts, which could effectively provide an additional 1570 new apartments housing 2500 people.
JLL Research also identified empty, unused spaces in heritage buildings above existing retail amenity that had the potential to become 350 apartments or housing for 600 people.
Mr Amara said partnering with existing owners on solutions that might allow them to retain their stakes on the ground floor while getting creative with what was up above had not been explored as widely as it could be.
“Strata-titling neglected upper floors of assets and encouraging consideration and completion of the base building works to make this viable needs to be given serious thought,” Mr Amara said.
“As this month’s A Moveable Feast event organised by Activate Perth demonstrated, there is considerable pent-up demand for new experiences and ways to interact with the malls. During the event, it struck me how much more vibrant and active the precinct would be with a captive residential population and the inevitable food and beverage influx that would follow.”