Melbourne has recorded a CBD vacancy rate of 3.3 per cent – the lowest CBD vacancy rate in the nation according to the Property Council of Australia Office Market Report released today.
A combination of demand, some stock withdrawal and steady population growth are driving low vacancy rates in the state’s capital..
According to Cressida Wall, Victorian Executive Director for the Property Council of Australia, the looming question for Melbourne’s office supply is where will workers go when the office supply pipeline dries up in 2023?
“To 2023, Melbourne CBD will supply approximately 650,000 sqm of new commercial stock. However, half of that stock is pre-committed and there is little to no, new office space in the pipeline beyond 2023.”
Changes to the C270 planning controls introduced in 2016 saw approvals of commercial developments in the CBD plummet, leading to significant concerns about the pipeline of supply beyond the current cycle.
“With Melbourne’s population set to match that of Sydney by 2028, immediate action is required to ensure that Melbourne’s CBD is able to accommodate its growing workforce,” said Ms Wall.
“We welcome the State Government’s announcement that changes to C270 are imminent.
“However, until changes are implemented, CBD approvals remain at a standstill. This position is untenable and changes to C270 to support commercial development are the release valve Melbourne urgently needs if it is to continue to develop as a thriving global commercial hub.”
According to an Urbis report, commissioned by the Property Council in late 2018, at least ten iconic Melbourne buildings that have either been built or that are currently under construction could not have been approved under the existing C270 controls.
To view select Office Market Report data series, visit the Property Council’s Data Room