Take a lift down to the basement at Mirvac’s EY Centre at 200 George Street in Sydney and you see something unusual.
Whilst much of the space is used for car parking, part has been transformed into an urban farm which features vegetable patches, a hydroponic vertical farm and a vertical ‘Farmwall’ (with each such element growing their own varieties of herbs and leafy greens).
The farm also provides mushrooms which are grown in coffee ground waste saved from landfill. Workers are encouraged to tend the farm and also to learn about growing their own food. Produce is sent to nearby cafés, including Mirvac’s own internal café in the building. The farm was created by Mirvac in conjunction with natural urban food processing ecosystem startup Farmwall.
As well as helping the environment, the farm has helped to foster and improve connections among Mirvac’s own workforce. Company staff not only enjoy planting but they get to interact with their colleagues in a less formalised setting, Mirvac head of office and industrial Campbell Hanan told the Sydney Morning Herald in May.
Such an example highlights a growing trend whereby commercial office landlords are reimagining and repurposing basement space as demand for car parking amongst employees declines.
This drop in demand for car parks stems from multiple factors. Greater infrastructure investment means public transport options will be more readily available going forward. A focus on ‘well-being’ is seeing increasing numbers of people walk or ride to work. Flexible working arrangements and remote working mean fewer staff are coming into offices. For those that do use vehicles, ride sharing and car sharing options means fewer bring their own cars. Local governments are discouraging new car parking spaces – the City of Sydney wants to halve new parking space provision by 2030.
Because of this, Victoria Tavendale, general manager asset management, office and industrial, says landlords are looking at how basement space can be better used.
In Mirvac’s case, the company has transformed an old bank vault at its 367 Collins Street building in Melbourne into end-of-trip facilities with showers, WCs, secure lockers and change rooms. The building now has 201 car parking spaces as well as 200 bike racks, 452 lockers and 22 showers.
As well, the company is changing the structure of its contractual agreements to enable greater flexibility for tenants in the number of spaces they lease. It is also partnering with third party operators to introduce casual car-parking options and providing apps to tenants to ensure seamless car parking bookings and management.
“A number of factors are causing a fundamental shift in the tenant demand for car parking in commercial buildings in Australia…’ Tavendale said via email. “…As a result companies now require less car spaces for their employees and are looking for a more flexible solution to manage the car spaces they do have.”
Josh Brydges, locations and transport planner for Australia’s largest car sharing service GoGet, agrees. As the cost and hassle associated with driving to CBDs increase, Brydges says many people will opt instead for public transport or car share services. As a result, much of the underground parking space constructed over recent years is becoming redundant and landlords are seeking to use this space more effectively.
As an example, he points to a partnership which GoGet has entered into with Dexus, whereby the former provides the latter with car share services across their portfolio. Under this arrangement, GoGet vehicles are stationed at various points within the basement at Dexus’ offices. Commercial tenants and their staff are able to reserve and use these using an app on their phone.
From tenants and their employees, this enables access to vehicles when needed without having to bring their own car. It also enables vehicles to be chosen according to the need of the occasion – a Mercedes for luxury or an SUV where more leg room is required.
For Dexus, this provides a value-add service to tenants and reduces the number of vehicles needing to be accommodated overall.
In another example, Brookfield has set up ‘green garages’ in parts of its commercial portfolio across Sydney, Melbourne, Brisbane and Perth. These feature electric vehicle charging stations., where hybrid electric Mitsubishi Outlander vehicles provided through GoGet are stationed. For Brookfield, this not only enables it to provide a car share service to tenants but also to enhance its sustainability credentials across its portfolio.
“What we are seeing already is that especially in some of the buildings that were built years ago, we saw quite a significant amount of parking,” Brydges said. “A lot of those parking spots are now becoming redundant. To utilise the space more effectively, they (landlords) are having to introduce new services and new ways of working with their carparks.”
All this raises questions about strategies which landlords should adopt.
First, Brydges says, landlords should think about the overall number of spaces which need to be provided – which may not be as many as would have been the case in years gone by. This could deliver significant savings where, for example, extra levels to accommodate parking do not need to be dug out.
To avoid tenant disappointment, part of these spaces could be repurposed for car share or end of trip facilities.
Brydges says parking space that is provided should be designed in a flexible manner to enable entire spaces to be repurposed as autonomous vehicles grow in popularity and thus space requirements for car parking are further reduced in the future. This includes level floors and heights which are adequate to cater for potential different uses.
Finally, there are new services. Central Park in Sydney reduced its parking footprint by half compare with traditional parking arrangements, for example. Whilst some of this space has been given to car share, part is used for recycled water.
Tavendale agrees about the need for flexibility to accommodate future uses This could include gyms, yoga rooms or fitness centres, movie theatres and bars, extra tenant storage, larger end-of-trip facilities, moving building facilities and service systems from roofs to car parks to make room for future deliveries by drone, ecommerce distribution centres for truck or even drone deliveries, maker spaces to test innovative ideas, and art galleries or studios.
She points to the example of Avalon Bay Communities, a developer which is building a large residential complex in Los Angeles. To accommodate potential future uses, the car park will have floors which are level rather than inclined and ceiling heights which are higher than those of typical car parks to enable space to be converted into shops of a gymnasium if demand for car parking declines.
As fewer people take their own vehicles to work, demand for basement car parking space will decline.
For landlords wishing to maximise the value of their space, this present a significant opportunity.