Thinking outside the box for a solution to rising office tower vacancies

Office vacancy rates across Australia have hit levels not seen since the 1990s recession, an issue highlighted in a February 13, 2025 article on news.com.au. With traditional office towers increasingly empty and companies shifting to remote work or downsizing post-COVID, many landlords are left wondering if their once well-tenanted spaces will ever be filled.

Here at Shead, we believe the situation is less about recovery and more about long-term strategy. By working proactively, listening to what tenants want and thinking outside the box, we have discovered a silver lining that not only fills these vacancies but transforms them into thriving hubs and sustainable assets with quality, long-term tenants.

This article explains how we are solving this multi-year problem and showcases a prominent case study that demonstrates what can be achieved when landlords, tenants and agents think beyond the status quo and open their minds to other possibilities.?

Properties reimagined – the 13 Spring Street transformation

Over the past few years, we’ve been working with office building owners and landlords, encouraging them to reimagine their properties and converting them for new uses that attract tenants from sectors they might not have ever considered. Examples include tenants from the medical sector, professional services (as highlighted in last month’s newsletter[PP1]?) and the health and wellness industry, all sectors where demand for suitable space is increasing. A notable example in our area is 13 Spring Street, Chatswood, now commonly known as ‘the HCF building’.

Historically, 13 Spring Street was a typical seven-story office tower with floor plates of around 600 square meters. Located on Chatswood’s east side, directly opposite one of Westfield’s main entries, this building once catered to conventional office tenants and had been vacant for an extended period. Today, however, its identity has been completely transformed.

By adapting the building’s operating model, we’ve attracted various medical and health-related tenants, including Qscan Radiology, general practitioners, physiotherapists, dentists and orthodontists. HCF has also taken up tenancy and secured prominent signage on the building as the largest tenant. The private health insurer saw the synergy in locating their headquarters among various health and allied health practitioners. This strategic pivot has not only filled a long-vacant building but has also created a niche medical hub in a prime location.

Overcoming the challenges

Converting an office building into a medical hub isn’t without its challenges. As Bill Geroulis, Director and Head of Commercial Property, explains, “To make these buildings work for a new type of tenant, we had to rethink everything from operating hours to building services. For example, medical tenants require flexibility. So, we adjusted the building operating hours and security and lift functions to run from 7?am until late, seven days a week. Building services like air-conditioning and cleaning also need to be managed differently. And while traditional office tenants simply needed a directory sign, our medical tenants required dedicated areas for prominent signage to enhance their brand presence and help patients find them easily. While incurring extra costs, these modifications are preferable to leaving buildings empty.”

A broader trend

Our experience with 13 Spring Street isn’t an isolated case. We’ve seen similar shifts in other properties across the North Shore, where landlords are increasingly open to non-traditional tenants. Bill believes the demand will only grow with the increasing need for healthcare services. He has also received expressions of interest from some gym and wellness operators about potentially adapting office space to suit their needs.

It’s important to note that our role isn’t about prescribing a one-size-fits-all solution. At Shead, our philosophy is to present all available options. When a landlord or tenant approaches us, we listen carefully to their requirements, whether it’s about size, budget, lease terms or fit-out needs, and make them aware of every available option in the market.

Bill says, “We show our clients what’s out there. Sometimes a space that once housed a standard office can, with a few adjustments, become the perfect location for a thriving medical practice. It’s all about understanding the potential and having the confidence to make that leap.”

The way forward

For landlords grappling with long-term vacancies in office towers, the transformation of properties like 13 Spring Street offers an interesting and very real solution. Medical tenants, professional services and, increasingly, health and wellness providers are proving to be stable, long-term occupants who bring reliable income and an enhanced sense of community to these buildings.

If you’re a property owner wondering how to revitalise your vacant office spaces, now is the time to consider this emerging trend. With the right strategy and the support of a proactive, innovative commercial property agent, you can turn a once-underutilised asset into a vibrant, profitable hub.

Interested in exploring new possibilities for your vacant office suite?

We’re receiving increasing enquiries from businesses looking for suitable space to lease. Contact Bill Geroulis on 0413 100 200 or email [email protected] to discuss the possibilities of finding the right fit for your vacant office space. And if you’re a business looking for space, let us help you locate and adapt the ideal space to suit your needs.