Office to housing conversion: estimating life cycle environmental and financial performance

The resource titled "Office to housing conversion: estimating life cycle environmental and financial performance" is published by the Journal of Physics: Conference Series and authored by D. Stiernon, A. Böhlke, A. Stephan, M. Bos, and G. Marino. This research focuses on the environmental and financial implications of converting office buildings into residential spaces, particularly emphasizing the life cycle assessment of such projects.

Cities across Europe are increasingly facing the challenge of converting office spaces into housing. Brussels has been a pioneer in this area, with significant conversions starting as early as the 1990s. By 2018 and 2019, about 20% of the annual housing floor area built in Brussels stemmed from these conversions, transforming over 1 million square meters into residential space.

The study employs a case study approach to assess the life cycle greenhouse gas emissions and financial performance across four different scenarios: (1) renovating an office building, (2) converting it into residential use, (3) demolishing and constructing a new office building, and (4) demolishing and constructing a new residential building. This method provides a robust framework for understanding the environmental impacts associated with each option.

The case study examines a specific office building located on rue d'Arlon in Brussels, built in the 1960s and spanning approximately 11,000 square meters. The building has been vacant for nearly 20 years and lacks finishes and technical equipment. The analysis focuses on how variations in renovation strategies and demolition methods can affect both environmental and financial outcomes.

Results indicate that the demolition-construction scenarios are the most environmentally damaging, with office renovations having the lowest impact. Specifically, the office renovation scenario accounts for only 13% of the greenhouse gas emissions compared to the housing demolition-construction scenario. Meanwhile, housing conversion emits about 22% of the emissions from the most impactful scenario.

From a financial standpoint, the benchmarking reveals that the cost of operations across different scenarios does not vary significantly, typically ranging between €1,800 and €2,200 per square meter. However, converting an office building to residential use is often viewed as less attractive financially. The analysis shows that developers tend to favor office projects due to higher market values and rental yields, which can significantly influence their investment decisions.

The study highlights that the valuation of office projects is generally more favorable than that of residential conversions. For example, an office building might be valued at €57.5 million based on an average rent of €230 per square meter per year, whereas a similar residential building could be valued at €45 million with an average rent of €180 per square meter. These market dynamics suggest that without regulatory intervention or public support, converting office spaces into affordable housing may not be a viable solution.

The findings underscore the complexities of balancing environmental goals with financial realities in the context of urban development. Despite the potential benefits of converting office buildings into housing, various factors, including market valuation and project complexities, must be considered. The study suggests that strategic interventions could facilitate more housing projects through office conversions, particularly in urban centers like Brussels.