Cities across Asia are seeing an increasing number of new office blocks: From Marina One in Singapore to the Z15 Tower in Beijing, occupiers have more choices than before. Many companies have also moved to new developments; Line moved its headquarters to Miraina Tower in Shinjuku, Tokyo while JLL Shanghai has relocated to the HKRI Taikoo Hui complex.
Meanwhile, other cities like Hong Kong and Melbourne have ageing buildings in their core prime areas, with many more than 20 years old. “Owners of older buildings can improve asset attractiveness and profile by retrofitting,” says Craig Mason, from JLL’s Project and Development Services. “With occupants increasingly embracing an agile and wider range of workplace strategies, buildings that already have these facilities in place will be in-demand with tenants willing to pay a premium for the space.”
Mason adds that many of today’s tenants are asking for services – such as better indoor air quality, concierge-style facilities and free wireless access – in and around the building to create a networked precinct. Hence retrofitting is about future-proofing – it improves the value of a property as it anticipates tenant demand and improving occupier comfort.
“Not only is the retrofitting method a relatively easy and cost-effective way to upgrade an existing building compared to redevelopment, it reaps a significant benefit for the bottom-line in terms of operational savings by being more energy efficient and reducing water wastage,” he says.
Moreover, retrofitting a building can help change the way people use the building. More open and natural spaces help with employee productivity while traditional office building lobbies can also be transformed to hold third spaces like cafes, stores and lounges.
In the Asia Pacific region, Australia has undertaken several significant retrofitting projects to resounding success. In Melbourne, Rialto Towers’ upgrade has seen 5,000 square meters of new office space as well as large retail spaces for brands like Mercedes Benz to a St Ali coffee house. The new tower is also the centerpiece of a new regeneration project in the city’s King Street district.
Up the coast, Sydney’s Chifley Tower has been recognised with the World’s Best Performance accolade in the Council on Tall Buildings and Urban Habitat (CTBUH) Awards in 2015 after a four-year green retrofitting and upgrading project that was completed in 2012.
“There are many ways a building can be retrofitted and upgraded. You can expand floor plate size, increase green features, upgrade mechanical and electrical specifications, boost facilities such as co-working space and cafeteria areas,” explains Dennis Lim, from PDM International, a JLL design firm. Other works to undertake include investment in acoustics, security, the Internet of Things and lift upgrades.
Lim argues that retrofitting brings out the potential of the building to investors; more importantly it offers the opportunity to maximize plot ratios to increase returns. “For the former DBS Building in Singapore’s Shenton Way, we did extensive research and worked with the owners to enhance the building by creating café spaces on the lobby floor, having indoor landscaping and even upgrades done to the washrooms,” he says.
The building was eventually sold to OUE for S$870.5 million in 2010 and Downtown OUE opened to much fanfare earlier this year. It boasts a retail and F&B component which also houses a co-working space as well as serviced residences.
“When done well, retrofitting showcases buildings at their best. These buildings not only bring greater value to their owners, they make economic and environmental sense,” says Mason. “In this age of climate change, that could be the greatest reward of all.”