MANY office blocks built in the 1960s and 1970s have become obsolete and are likely to be recycled for other uses, such as apartments, hostels or hotels, according to a study by the Society of Chartered Surveyors (SCS). But it suggests tax incentives might be provided to accelerate this process.
Dublin already has at least one notable example of "office block recycling". Davitt House on Mespil Road, built in the late 1960s, used to be the headquarters of the Department of Labour. After a period of vacancy, it was stripped out and turned into the Mespil Hotel, pitched to cater for the business sector.
The SCS study says residential conversions - whether for apartments, hotels, student housing or hostels - tend to be the most viable form of recycling and will increasingly be considered as an option for more marginal "first-generation" office blocks which are proving increasingly difficult to let.
First-generation offices in Dublin account for almost 6.5 million square feet, or nearly half of the total volume of office space built in the city since 1960. Many of these buildings are vacant or will become vacant because they can no longer meet the needs of modern office users.
Market forces, Government decentralisation and the withering of 35-year leases taken out by the State are also factors in the vacancy equation, according to the SCS study. This is not unique to Dublin; the phenomenon of older office buildings falling idle has become a pattern in most cities abroad.
It has been spurred on by a new trend among office occupiers to reduce their space requirements through tele-working, "hotdesking" (desk sharing) and flexi-time arrangements. A 1994 survey of 300 companies in Britain found that 20 per cent of them had already introduced some sort of desk-sharing policy.
"Advances in fire safety legislation have also occurred over the intervening decades and accordingly, many of the 1960s/1970s buildings now fall far short of current requirements," it says. Many of them need refurbishment, "both to replace worn-out services and to relaunch them on the rental market".
This has been happening, of course. Over the past 10 years, numerous office blocks in Dublin have undergone major refurbishment and, in some cases, virtual reconstruction. The latest examples include St Martin's House, on the corner of Waterloo Road, and Prize Bond House in Lower Mount Street.
The SCS study focuses on recycling older office blocks for apartments, hostels or nursing homes "as these are the areas in which it is predicted that the greatest demand will exist in the future". But it says such conversions require an imaginative approach in estate design and marketing terms.
For recycling to be viable, "a realistic valuation of the current worth of unlettable, obsolete office buildings is necessary to allow a critical analysis of possibilities for added value in alternative use". In other words, freehold owners - usually financial institutions - should not overvalue their vacant office space.
"Traditionally, owners are reluctant to consider `entrepreneurial' approaches to recycling their properties and prefer to seek a re-let (the it worked before, so it will work again mentality)", the study says, adding that this is often due to a "forlorn hope that the property could have long-term value potential".
As a result, "recycling tends to be overlooked in favour of varying degrees of refurbishment, ranging from minimalist to complete strip-out and refurbish, to demolition and rebuild in extreme situations. Given the right economics, this option can often appeal because a higher plot ratio can sometimes be achieved".
A building's potential for recycling depends on a number of factors; for example, a deep floor plan would need to be broken up by inner courtyards to provide natural light and ventilation for new residential units. Other issues include fire safety, soundproofing and the ease of installation of plumbing and sanitation.
The SCS study examined one five-storey office block from 1973, with 22,500 square feet of space, to see if recycling would be viable. Designs were prepared to turn it into a student residence containing 63 single rooms and 14 double rooms, with retail space at street level, at an overall cost of £900,000.
It concluded, however, that the building would have to be purchased at a very nominal sum for the venture to be a success. Nonetheless, the SCS said certain factors - such as location, building size and layout - could "completely change" this equation, making the option of recycling more viable.
"Recycling is a specialised, marginal undertaking which can only be done on an individual property basis to suit a particular need or niche at a particular time," according to the study. Further research was needed to establish whether specific tax incentives could be justified to offset the high costs of converting to residential use.
One could argue for a similar study to be carried out on multi-storey car-parks, now the biggest single category of development under construction in Dublin.
One of the key questions about many of them is whether they can be converted to other uses in, say, 20 years time when car access to the city centre is bound to be heavily restricted.
