Global markets are actively exploring how to repurpose now empty office buildings, as the post covid impacts of work from home and distributed employment take their rising toll. Typically, it is the older style office buildings which are most affected. Owners of premium office property compete more aggressively for premium, large-scale tenants who still want the high performance CBD workspace, while the lower graded buildings are often rendered uncompetitive.
Conversion of office buildings to residential is something being explored in markets from Manhattan to San Francisco to London and also here in Australia, but there are a multitude of challenges in converting floor plates designed for office workers using shared facilities (such as toilets) into multi-tenanted apartments each with their own facilities. These challenges have more merit in markets where housing is blisteringly expensive (think Manhattan or London) but even there, the conversion costs are significant and, in many cases, insurmountable (much depends on the building itself).
But as our cities hurtle toward the addition of over a million new residents, there’s a conversion opportunity which to me makes a lot of sense, and one which could be achieved at lower conversion costs. Think schools. Here’s why.
The latest Queensland Government Statistician’s projections for population growth mirrored those for many of our major cities: a lot more people, in a short space of time. For the Brisbane region alone, their medium series predicts an additional 1.2 million people by 2046.
That figure includes an increase of 630,000 children in the 0-14 age group and while the QGSO notes this cohort will reduce as a share of the overall population (due to our ageing profile), the increase of 630,000 kids is a number that will need to be accommodated.
To keep the math simple, assume 500,000 of that cohort will be school age, and assume a typical school size of say 500 students (averaging across independent schools which can be smaller and state schools which are typically larger). There’s perhaps 1,000 new schools required.
Where will they go? These projections are for the Greater Brisbane area. The predictions for where growth in the school age population will occur within Greater Brisbane vary. In the Brisbane City Local Government Area (LGA) for example, there’s only a predicted increase of 6,610 in the 0-14 year age bracket. (Which is still 13 more schools).
In Moreton Bay, the increase in school age children is predicted to be much higher – at nearly 40,000. And in Logan, the increase is nearly 30,000. That’s a lot of kids and a lot of space to find for a lot of schools within the urban footprint.
The challenge is greatest for areas which are largely built out, but where density is increasing. How do you infill new schools? There just aren’t large chunks of land of several hectares ready to accommodate new schools with sports fields in areas already urbanised.
Back to our repurposed office building scenario. Australia is only starting to get used to the idea of vertical schools, but they’ve been around for a long time. This (below) is picture of the primary school I attended in Hong Kong (where I was born and raised until end of year 6). As I am now officially old, this was obviously a long time ago. The school though, like me, is still standing. Year ones were on level one, year twos on level two, and up it went. (Fun fact: Michael Hutchence of INXS attended this same school at the same time. He was three years older than me, so a couple of floors up). On the roof was a canteen and caged in play area. On ground there were play areas in under crofts, and a couple of basketball courts. No grass. We shared an oval up the road with multiple other schools, each allocated their timeslot. Somehow I managed to finish primary with an education which was possibly two years ahead of what I did in year 7 at primary school in Australia (Kenmore State). The lack of open space didn’t impact my education.
In terms of building size, schools are fairly hungry users of space. Have a look my school in Hong Kong for example. Here in Australia, schools of several hundred students need roughly 10,000 square metres of floorspace. Some, like Brisbane’s new vertical Fortitude Valley State Secondary School, are closer to 25,000 square metres gross floor area (it was designed for up to 1500 students and cost $100m to build).
Now, tell me how many single tenants you’re aware of with a requirement of potentially 10,000m2 to 20,000m2 and who need long term leases, and you might see where I’m going with this.
But why would a school want to occupy an office building in a CBD?
Location is one reason: the CBD is probably the best served in an entire region by public transport – of all forms. That centrality also means the school could be accessed from all points of compass, meaning its physical catchment could be city wide – it isn’t restricted to just one side of the city. Keep in mind that schools have traditionally been based on local catchments: back in the day, kids used to walk or cycle to school. On their own! Now, parents seem prepared to drive some distance to drop little Johnny or Mary at the school gate. Local catchments are becoming less of a consideration, especially in the non-government sector.
Lack of available sites for new schools is another driver. When you simply don’t have the space in infill suburbs, what do you do? Following a well-established trend that is decades old elsewhere in the world by putting schools in central locations is a logical option.
Schools seem to benefit most from proximity of students with each other and with their teachers. Remote learning is unlikely to take off in the same way as remote working, so office buildings which offer that proximity advantage make sense.
Building design is also amendable for school use. Similar to offices, education is primarily a day use function. Shared learning spaces, shared toilets and shared facilities. Fire, building and other relevant codes that are designed for a comparable intensity of floorspace use. (Remember offices at one point got to just 8m2 per person!). No planning reasons why not, and in terms of accreditation by education authorities, potentially easier than some alternatives.
Entire floors could be dedicated to physical education – soft-fall but enough room for half courts for basketball, soccer, gymnastics etc. If outdoor sports is essential, buses take students and coaches to nearby parks and playing fields – just as they do elsewhere in the world. It’s very feasible.
This idea logically suits secondary grade office buildings, and those closest to transit hubs (train and bus) will rate best. Conversion to education use will depend on the building and the needs of schools, but will be less costly than office to residential conversion in most cases. If you are faced with the option of building a new vertical school for $100m+ (provided you can find a site) versus buying and refurbishing an existing CBD office building for less, the sums on the surface at least look interesting.
This could also better suit secondary as opposed to primary schools: we seem too protective of our primary school age kids to consign them to school buses or (gasp!) catching the train, but for secondary school age children, catching a train or bus from your suburban home into the city for school is no different to what office workers have done generations before. The entire CBD infrastructure is designed around this hub and spoke model. If there are fewer office workers needing to make this journey now, then why shouldn’t students take advantage of generations of investment in public transport networks, and the amenity offered in the CBDs? Plus, there’s nothing quite like education to activate a space. And CBDs need activation.
Sure, this isn’t something that will be seized on by multiple schools quickly, but I have no doubt it will happen. It’s already started in fact. You would be surprised at the number of non-government secondary or special needs education establishments already occupying former office space in and around our CBDs.
If a city region is planning to absorb 1.2 million more people (as is Brisbane) in a relatively short space of time within existing urban boundaries, it needs to do much more than talk about just housing. There’s a need for workplaces, for health facilities, and a need for schools (amongst a very much longer list). In our case, potentially 1,000 new schools. Some of that demand will result in much bigger schools in existing locations, and much larger class sizes. And some of that demand might just find its way to a CBD building or two. It only takes a small number of schools to potentially generate demand for tens of thousands of square metres of space.
It’s something worth investigating.
