Internationally recognized as the world’s most liveable city (according to the EIU), population growth has been a key economic driver for Melbourne. Increasing at a rate of 1.8% per annum over the past decade and adding 91,600 people over the past year, Melbourne has become Australia’s fastest growing state capital city. This growth has been more pronounced in the CBD, with a push towards inner city living evolving in the early 1990’s in response to Melbourne’s postcode 3000 policy.
Meeting the demand for Melbourne’s inner city living, the number of residential apartments has increased three- fold over the past decade. Nevertheless, the emergence of residential dwellings does not stand alone. Office stock in the Melbourne CBD has grown by one million square metres over the last decade and is now the second largest office market in Australia (behind Sydney), with CBD-based employees increasing by 24% over that time. In contrast, retail supply has lagged, increasing by only 92,500 sq m since 2005.
Major mixed-use projects are a relatively new phenomenon for Melbourne. One of the earliest, the QV Complex, was completed in 2005 and comprises high density residential, retail and office. A decade later, rapid growth in the resident and workforce population, is transforming the ways in which people want to live and work with new opportunities for mixed-use development emerging. Siteworks has recently commenced at 447 Collins Street, where Cbus Property has a high rise scheme adding 400 residential dwellings, 50,000 sq m of office space, 3,000 sq m of retail space, and a further 250 hotel rooms.
GROWTH IN CITY LIVING DRIVING MIXED-USE DEVELOPMENT
MELBOURNE CBD OFFICES & RETAIL STOCK VS RESIDENTS & DWELLINGS
Looking ahead, Melbourne’s population is projected to surpass Sydney by 2036. With a large proportion of new residents residing within inner city suburbs, combined with a distinct trend of occupiers migrating from the suburbs to the Melbourne CBD, there is a growing opportunity for mixed use development within the CBD and the city fringe. The 30 year urban renewal project at the Fisherman’s Bend precinct covering 450 hectares in Port Melbourne will include new high and medium density mixed commercial and residential development for up to 80,000 residents and a working population of 60,000 by 2046. Adding to this is the iconic Richmond Malt site located three kilometres from the Melbourne CBD mooted to incorporate a mixture of commercial office, retail and residential, regenerating a historical industrial location.
The emergence of mixed use projects offering investment opportunities of scale and diversification is likely to maintain Melbourne’s high position as a global destination of foreign and institutional capital.