Construction begins on 1.57-hectare carbon-neutral precinct in Melbourne

Construction has begun on the transformation of a historic wool shed site in Kensington in Melbourne's inner north-west.

Designed by Woods Bagot, the project will transform a two-block span of large-scale red-brick warehouses, known as the Younghusband precinct, into a "village" of commercial offices and retail spaces.

The design seeks to preserve the exteriors of the warehouses and their hipped roofs.

"For generations, these buildings have been impenetrable heritage monuments that people couldn't access. This design flings open that history for the first time, creating a community asset and modern workplace that utilizes an incredible location and the demand for authentic, contemporary office environments," said Woods Bagot principal Peter Miglis.

"Sustainability might have been challenging to achieve for existing buildings in the past, but our approach has taken into account the retention of existing materials to reduce waste, the use of sustainable new materials where required and 100 per cent renewable energy including rooftop solar, battery storage and no gas," Miglis said.

The first stage of the project will create 17,560 square metres of office spaces and a new town square with village-style food and beverage outlets and a laneway of retail spaces.

A new contemporary office building designed to reference surrounding silos through curved facades will form the second stage of the project. A third stage, which is not yet approved, will be a six-level building with cascading greenery and a public zone.

The Younghusband wool sheds were originally built in 1901 for wool sellers R Goldsborough Row and Co. Named after wool-broking agent Younghusband and Co., the site has been home to arts and creative businesses and was a storage facility for the Australian Ballet.

"Younghusband will create Melbourne's largest carbon-neutral adaptive reuse precinct, reimagining and revitalizing one of the city's largest heritage sites and creating a connected and sustainable destination for work and play," said Brett Mason, managing director and CEO of construction and development group Built.

"With a design and construction principles guided by sustainability and heritage preservation from the ground-up, Younghusband will create an environment where the past is respected and engineered for a sustainable future," Mason said.