Offices in high-rise buildings are being replaced with homes

August 11, 2015

The demand for residential property is seeing developers snap up ageing commercial buildings in prime lower north shore locations to convert them into luxury dwellings.

The increasingly lucrative residential real estate market means developers can expect stronger rental yields from apartments than office spaces, despite strengthening commercial occupancy rates.

Milsons Point and North Sydney have witnessed this trend, with several significant office acquisitions in the past year that are now earmarked for conversion.

Formerly the 1980s Tower Life building, Bridgehill Residences comprise 125 apartments.

According to a CBRE ViewPoint report from May, up to 60,000sq m of office stock could be withdrawn from North Sydney alone over the next five years.

In Milsons Point, the 1980s Tower Life building at 80 Alfred St was converted into the luxury Bridgehill Residences, with residents to move in by the end of this month.

Meanwhile, up the road, “88 Alfred Street” — a 123apartment development from Cbus Property converted from the now defunct Vibe Hotel — was recently released to the market.

The now-defunct Vibe hotel in Milsons Point is being transformed into ‘88 Alfred Street’.

Despite being an often challenging process, transforming commercial building in prime locations into apartments has numerous benefits, Bridgehill managing director Yibin Xu said.

“A new apartment with good views can be worth seven times more than what the space was worth as a dated office,” Mr Xu said.

“Another plus is that the infrastructure and related services are already in place, (and) then there are the environmental benefits… It’s far kinder on the environment to re-use as much as possible.”

The North Sydney CBD skyline is dotted with high rise building.

Despite their recent popularity, commercial to residential conversions are not a new phenomenon.

In 2009, the former Eagle House building at 118 Alfred St was converted into North Residences.

Prior to that, the former Yellow Pages House in Glen St was converted into Azure apartments and the Sharp building in Lavender St into Latitude, where Nicole Kidman owns a penthouse.

North Sydney Council’s director of city strategy Joseph Hill said the redevelopments are the result of planning initiatives, some of which were established as early as the late 1990s.

A penthouse apartment in the North Residences at 118 Alfred Street, Milsons Point, which was formerly owned by INXS guitarist Tim Farriss.

“At the moment the residential development is bang on where we planned to be,” he said.

“We’ve planned for it well, and now we’re going to have a very diverse and resilient North Sydney.”

About 1,400 dwellings have been approved and/or constructed under these plans in North Sydney alone.

“Particularly for the North Sydney centre, it provides a very good balance between commercial and retail — you get a real mixed centre with residential on the fringe,” Mr Hill said.

Originally published by Daily Telegraph