The transformation of offices into housing in search of economic balance

Rueil 2000 office building district, in the Paris region: dusty facades, ghostly halls, vegetation beginning to make its way through the steps leading to the motionless revolving doors.

A stone's throw away, the real estate company Novaxia, which specializes in urban recycling, demolished a 1990s building that had been vacant for at least two years.

Dilapidated and very energy-intensive, the building was "unrentable" and too complex to transform without demolition, according to Joseph de Loÿe, who is overseeing its reconstruction into a hotel residence.

The city of Rueil-Malmaison is experiencing a vacancy rate of over 20% of its office buildings, well above the 10,5% of empty offices in the Ile-de-France region, calculated by the Immostat group.

At the same time, an advertisement for a rental property in Hauts-de-Seine attracts an average of 25 applicants, according to the digital real estate agency Manda, and rental pressure is just as high elsewhere in the Paris region.

It was this observation of "increasing office vacancy and ever-increasing demand for housing" that led the Minister for Housing, Valérie Létard, to launch a plan in March to transform vacant offices, which could represent "tens of thousands of potential housing units."

In Lyon, Icade, the real estate subsidiary of the Caisse des Dépôts et des Consignations, has begun converting a 15-story tower, where the former headquarters of the nuclear group Areva-Framatome was located, into 100 apartments, 45% of which will be social housing.

"30% more expensive"

"The tower lent itself to a change of use," Eric Gibeaux, regional director of residential development in Lyon, explained to AFP: a size that wasn't too large, centered around a load-bearing core that made it easy to knock down all the other walls and recreate apartments, a high price per square meter in the Part-Dieu station area to offset the cost of the work, and a supportive municipality.

"Renovation costs 30% more than building a new building. There are many constraints to consider, and it's difficult to find an economic balance for this type of building," he laments.

Renovating existing buildings nevertheless has the advantage of saving concrete and therefore considerably reducing carbon emissions, which makes it the preferred option for recycling empty buildings.

"However, it is impossible to convert all empty offices into housing," warns Eric Gibeaux, particularly when the building is too deep, which would deprive certain rooms of windows or sufficient light.

According to a study by the Regional Observatory of Business Real Estate in Ile-de-France (ORIE), which was based on economic profitability and the price difference per m2 between office space, which is often more expensive, and housing, only "15% to 20% of empty office buildings could be converted into housing," recalls Joachim Azan, head of Novaxia and president of ORIE.

"The conversion of offices into housing is struggling to gain momentum and we need to accelerate," stressed Nadia Bouyer, Director General of Action Logement, in March. The government had tasked her with setting up a working group, along with Xavier Lépine, President of the Institute for Real Estate and Land Savings (IEIF), on financing the conversion of offices into housing.

Among the ways to find an economic balance: work on the rules that extend the time taken to complete operations, on financing, on asset prices and on taxation.

Two legislative texts are also on the table: a bill on the simplification of urban planning rules, which will be studied on Thursday, and another specific to the transformation of offices into housing, which will be discussed by the joint committee on May 23.