New report a stark warning for jobs in Melbourne CBD’s future
22 November 2018
Property Council:
Without an urgent rethink of recently
introduced development controls,
Melbourne’s CBD risks running out of the
office space needed to
house the
jobs being created in a burgeoning
workforce that is powering
the state’s economy.
In less than two decades, by 2036, the CBD will need at least a 50%
increase in CBD floorspace of 9.1 million sqm – including an additional
4.4 million sqm of office floorspace - to accommodate future workforce
projections.
But recent changes to
planning regulations have put a handbrake on new
office development that could undermine Melbourne’s future as a vibrant,
liveable city and international business hub.
The new report by
Urbis, commissioned by the Property Council of
Australia’s Victorian Division, found that without changes to the C270
regime, the annual economic output of the State could be reduced by as
much as $7 billion per annum.
Executive Director Cressida Wall said the report clearly demonstrates
that in the two years since the C270 controls have come into effect CBD
office development had “ground to a halt” with only two new commercial
office buildings approved.
“We now have a solid evidence base showing the dangers of not properly
planning the future development of Melbourne CBD, which is home to the
highest concentration of jobs and economic activity in the state,” Ms
Wall said.
“This report is a warning to policymakers that an immediate review of
C270 planning controls is needed, with the impacts of this policy plain
to see and cause for serious concern.
“Melbourne already has the lowest amount of office space available of
any capital city in Australia, having dropped from 4.5% to 3.6% over the
six months to July 2018, and the city simply can’t afford to see that
diminish further.
“Melbourne’s CBD desperately needs more office floorspace growth to
support the high-value jobs that are so vital to our economy, and for
this to occur commercial development must be supported.
“New residential supply is essential for affordability but so are jobs,
and it is imperative that governments get the balance right in critical
commercial precincts like the Hoddle Grid, Docklands and Southbank if we
are to preserve Melbourne’s status as one of the world’s great cities.”
Between 2001 and 2016, employment within Melbourne’s CBD grew 83% from
just over 173,000 jobs to more than 317,000 jobs. With Greater
Melbourne’s employment level growing at a slower 52%, the CBD’s share of
metropolitan-wide employment has grown from 13% in 2001 to 16% in 2016.
Meanwhile, the increase in commercial space in the Hoddle Grid over the
10 years to 2016 was just 6% (239,000 sqm) growth while residential
floorspace increased by 96% (817,000 sqm).
Urbis analysed other leading international cities, finding that
residential and commercial properties competing for space, especially in
city centres where amenity, services and existing employment
concentrations are highest, was a common challenge. They warned that
this competition threatens the economic success of cities.
Whereas cities like Sydney had supported the delivery of major new A
Grade office stock with precinct-wide transport connectivity and
world-leading sustainability features, like Barangaroo (280,000 sqm),
many of Melbourne’s most iconic new office blocks would not have
received approval under the current C270 system.
These well-designed
buildings add to the fabric of Melbourne’s CBD and have a combined
value of approximately $5.8 billion, accommodating approximately 34,500
Victorian jobs.
“Large-scale commercial developments need to be able to attract sizeable
tenants to get off the ground – tenants who are increasingly discerning
with an established flight towards quality that also demands access to
public transport and workplace efficiencies,” Ms Wall said.
“Strong supply of commercial office space is crucial in supporting our
growing population, which will exceed
Sydney by 2051, and maintaining the world-leading calibre of our
smart, 24/7 economy.
“The report sums the situation well in its observation that, while
Melbourne is the key to
Victoria’s economy, it is the CBD that powers it.”
The report makes five key recommendations:
-
Immediately introduce interim CBD planning controls to increase flexibility and support employment growth.
-
Prepare an economic strategy for the CBD to ensure it remains a key economic hub.
-
Conduct a comprehensive review of current CBD planning controls to support the economic strategy.
-
Improve the efficiency and certainty of the current CBD planning approval processes.
-
Promote and enhance transport infrastructure in line with anticipated CBD employment growth.
--ENDS--
Source: Property Council - www.propertycouncil.com.au
Contact: Media contact: Cressida Wall | M 0415 831603 | E cwall@propertycouncil.com.au
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