Re-use pays dividends in the long run

Catherine Carter | Friday, 6 March 2009 6:00 AM | Add Comment

Growing office vacancies in Canberra, which have in part occurred because of the ‘flight to quality’ as major Commonwealth tenants look to move to energy efficient A Grade office space, raises the question about what to do with some of the older B and C grade buildings.

Much the same issue arose here about a decade ago, and the then Chief Minister introduced policies which allowed adaptive re-use of redundant existing buildings, such as the Jolimont Centre, which is now the Novotel, the Wales Centre which is now the Waldorf Apartments, and other sites, which became serviced apartments.

The adaptive re-use policies introduced included a waiver of the development application fees, remission on the change of use charge and stamp duty concessions on lower-prices apartments.

The benefit was that otherwise under-utilised buildings provided housing and other much-needed facilities in the city, increasing inner-urban population density, offering greater diversity in housing choice and relieving transport pressures because people lived closer to their workplaces.

The environmental benefits in recycling, rather than demolishing existing redundant buildings are obvious. An added environmental gain was in reduced energy costs for these renewed buildings (air conditioning in residential apartments was no longer left on all day, as it had been when they were offices, for example).

Canberra will gain if our redundant B and C grade buildings can be adapted – especially if they will provide affordable housing alternatives. But the current situation is more complicated for owners who might want to change the use of their office buildings than it was before. Upfront costs can be prohibitive, unnecessarily so, when you consider that relaxing these charges will not reduce government revenue. The experience of ten years ago shows that.

Last time, the ACT Treasury found that short-term, foregone revenue, lost when the upfront charges on changing use were reduced, was paid back within a couple of years, because of the extra rates from apartments, and the duties paid when they changed hands. So, the Territory's revenue continued to grow from these adapted buildings over time.

The Property Council would like to work with the Government, before vacancies rise too high, to identify initiatives which encourage adaptive re-use and redevelopment of ageing buildings, for a variety of purposes including residential, hotels or student accommodation.

Have your say.

Catherine Carter | Friday, 6 March 2009 6:00 AM | Add Comment

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