profile and much investment money comes from China , which is heating the property market here . Furthermore there is an enthusiasm in Asia to convert and take a little more risk than Australians might . The current Greenland development in the CBD is a prime example . The agent noted the imminent supply in Barangaroo lead to oversupply in lower Grade B and C office stock in 2016 and 2017 . He concurred with the developers that Highest and Best Use is what determines the use noting that , currently hotels are popular office conversion projects in the CBD . Sydney has high visitor numbers and the major tourist destinations of the Harbour Bridge and Opera House are within walking distance . The biggest risk perceived by the valuer / agent is timing the market cycle , so that your project is ready at a time when demand is high and gave example of buildings which hit the market during the GFC and had to accept much lower rents and purchase prices than estimated 2 to 3 years earlier .
With regulatory issues such as planning and heritage , the developers felt there is considerable variation in approach and context from council to council , which can be hard to account for . Changes to the procedures and more uniformity would help to encourage more conversion adaptation . Shortening planning procedures , would help as heritage building projects are very protracted currently . Overall heritage was perceived as an emotional area to deal with which could be positive or negative for developers with potentially higher exposure to risk . One interesting debate was whether heritage is a societal responsibility or an individual one ? Developers perceived that businesses want to maximise their returns so if that means demolition then a building will be demolished , whereas if society values the building , and there was a fund to offset the lower profit resulting from retention , that might work . Again the sustainability attributes such as retention of known and appreciated buildings and landmarks , retention of embodied energy were not considerations or important .
Both developers and the valuer felt that social and environmental variables are not as important in this market as economic and legal ones . As the developers stated although people feel good about sustainability , but they are not prepared to pay extra for it . As embodied carbon in Sydney is not factored into environmental assessments such as Green Star , the argument regarding retention of existing buildings is not so strong as it could be . The agent agreed embodied carbon is not discussed . There is a perception that every developer ‘ green washes ’ their developments which implies a superficial weak sustainability is achieved at best , and that ironically the argument for retained embodied carbon within the existing structure is being missed in this market . Significantly the developers we spoke to acknowledged that inter-generational equity is important . However the current Australian government does not regard sustainability as important , and the developers felt there has to be a push from the population for sustainability to be valued . The valuer also noted sustainability is not high on buyer ’ s agendas in the CBD residential market .
Technically , plan shape , and the location and number of columns affects ability to accommodate residential units in office conversion projects . The agent noted high construction costs currently due to under supply and high demand in the market . He also noted that older buildings typically pre 1980 have asbestos in them , which adds further to risk , cost and time delays . The valuer thought the location of the service core was important as it can affect the number and size of apartments in a conversion project which again comes back to economics and profits . Again , all attributes raised by interviewees were not considered in the context of sustainability and are very limited given the potential range of attributes identified in Table 2 above .
Sustainability and office to residential conversion adaptation in Sydney 771