A $2.5b confidence boost for Melbourne's battered CBD
Central Melbourne is on track to receive more than $2.5 billion in development proposals for 2022, bringing the city back to pre-pandemic levels as developers and property owners invest in their faith for the city’s rebound.
The City of Melbourne itself is set to assess more than $1 billion of new developments in 2022, while another $1.5 billion of projects assessed by the state government have also been proposed for the municipality so far this year.
“After so much COVID-19 disruption, it’s heartening to see developerscontinuing to invest heavily in the future of our city,” Deputy Lord Mayor Nicholas Reece said.
“With residential occupancy levels now back to pre-COVID-19 levels and a record number of new hospitality venues opening in the city, it is no wonder that development applications have taken off.”
So far, more than 600 planning applications worth an estimated $800 million have come before town hall, with 85 per cent of those proposals involving new developments. The remainder cover amendments to existing permits.
In 2019, the city received 1200 planning applications worth $1.1 billion. After the coronavirus emerged, the tally slumped quickly to 850 planning applications worth $750 million lodged in 2020. Last year, 950 plans were filed, worth $800 million.
That the development pipeline is being restocked will come as welcome news for a city which has been battered by rolling lockdowns for more than two years. Some CBD retailers have closed their doors forever, while others are struggling to survive.
The town hall figures show the CBD is the busiest market for new plans with 200 new applications, mostly covering new businesses and shop fitouts. The upmarket inner-city suburb of Carlton, which falls within the municipality, is second with more than 70 projects proposed – for residential properties and additions to heritage homes.
Plans for a number of big projects in the CBD have also been lodged, which will be dealt by the state government. Among them is a joint proposal from billionaire developer Lang Walker’s ASX-listed Abacus Property Group for a $750 million twin office tower development flanking Collins Street and rising above the historic Goods Shed warehouses.
Meanwhile, the next wave of development plans is already forming, through a series of opportunistic deals driven by smaller private players that have swooped on CBD properties, with ambitions to redevelop.
Just last week, private developer V-Leader bought a group of seven shops on a prominent CBD corner for around $50 million on a yield of 1 per cent, flagging plans for a mixed-use project.
