STAR (Sustainable Temporary Adaptive Reuse) Toolkit: Innovation for Value Creation in Commercial Property

Source abstract

The Covid pandemic has affected society in many ways. In the built environment, it has impacted how buildings are used and by whom. These changes have affected market behaviours as owners look to reposition assets and meet altered demand paradigms. Changes to work praxis following Covid, particularly working from home (WFH), have affected commercial office values in central business district (CBD) markets. This has resulted from companies needing less space and taking advantage of discounts on higher‐quality office space. With incentives increasing and rental growth stagnating due to decreased demand, particularly in lower‐grade assets, capital values have declined, and the investment market has slowed. In response to these shifts, efforts to rejuvenate the commercial property sector in Australia include the development of the Sustainable Temporary Adaptive Reuse (STAR) toolkit. The STAR toolkit developed a series of resources that enable owners to assess the short‐term reuse potential of an asset. The aim of the toolkit is to reduce vacancy and drive uplifts in rental income, through temporary adaptive reuse. This article demonstrates the capacity of the STAR toolkit to help reposition an asset by sustainably reusing some, or all, of the vacant space. The approach provides a strategy for owners to improve usage and rejuvenate assets, creating value uplifts and income stream security in challenging market conditions.