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

Overview of the Study

The paper “Office to housing conversion: estimating life cycle environmental and financial performance” is an open‑access article published in the Journal of Physics: Conference Series by the Institute of Physics (IOP) Publishing. The research team—D. Stiernon, A. Böhlke, A. Stephan, M. Bos, and G. Marino—is affiliated with the Louvain Research Institute for Landscape, Architecture, Built Environment (LAB) at Université catholique de Louvain and Saint‑Louis University/ICHEC in Brussels. Their work investigates how converting existing office buildings into residential units compares with demolition‑construction pathways in terms of greenhouse‑gas emissions and economic outcomes.

Life‑Cycle Environmental Findings

Using the TOTEM tool adapted to Belgian conditions, the authors evaluated four scenarios: (1) office renovation, (2) residential conversion, (3) office demolition‑construction, and (4) residential demolition‑construction. The analysis focused on product‑manufacturing phases (A1‑A5). Results show demolition‑construction scenarios have the highest climate impact, while office renovation has the lowest, amounting to only 13 % of the impact of the housing demolition‑construction case. The residential conversion scenario registers 22 % of that impact, and office demolition‑construction reaches 82 %. The study highlights that floors and structural elements dominate the environmental burden, while differences between office and housing use become less pronounced when full life‑cycle phases are considered.

Financial Performance Insights

Benchmarking real‑world projects in Brussels’ European district revealed construction costs ranging from €1,800 to €2,200 per square metre across all scenarios. Despite similar cost ranges, financial returns favor office development. Using a typical rent of €230 /m² year for offices and a 4 % yield, a 10,000 m² office portfolio is valued at approximately €57.5 million. The same size residential portfolio, with €180 /m² year rent, yields a valuation around €45 million. Tax advantages, such as VAT recovery on new developments, further incentivize demolition‑construction of offices over conversion to housing.

Methodology and Data Sources

The study combines on‑site inspections of a representative 11,000 m² office building (Rue d’Arlon 104, Brussels) with data from recent comparable projects. Material selections for walls, insulation, and structural elements were drawn from the TOTEM library and adapted to reflect typical Belgian market practices. The authors also incorporated financial, technical, and legal analyses to ensure a comprehensive comparison of the four scenarios.

Policy and Market Context

Findings indicate that while office renovation offers clear environmental benefits, the financial logic currently drives developers toward new office construction. The authors note that policy measures—such as subsidies, stricter urban‑planning requirements, or incentives for residential conversion—could shift this balance. They also observe a loss of usable floor area (15‑18 %) when converting offices to housing, and an additional loss of a floor in taller buildings due to increased ceiling‑height standards.

Implications for Sustainable Housing

The research provides quantitative evidence that converting existing office stock can substantially reduce embodied carbon compared with demolition‑construction, especially when interior insulation and adaptive reuse are employed. However, without supportive fiscal or regulatory frameworks, the higher market value of office space and the ability to recover VAT on new builds make conversion less attractive to private developers. Policymakers seeking to promote sustainable housing should consider mechanisms that offset the financial disparity, such as tax credits, public‑funded subsidies, or mandates that prioritize adaptive reuse in dense urban districts.