Alarm at residential trend in central city
Analyst Charter Keck Cramer's projections show 313,355 square metres of office space will be built from 2013 to 2016 in Melbourne's central city region - the CBD, Docklands, St Kilda Road and Southbank.
Over the same period 13,105 apartments (at a conservative estimate of 50 square metres each) will be built, occupying 655,250 square metres of space.
CKC director Robert Papaleo said developers had focused so heavily on residential projects in the past decade that, if this leaning continued, it could damage "the economic vitality of Melbourne" allowing residential development to permanently displace traditional commercial sites.
Melbourne's continued economic growth required a vibrant commercial centre with "new-generation office floor space" that met the needs of business, he said.
But Colliers national director of office leasing Andrew Tracey said it was important to look at what a mature economy would do.
Central Melbourne had been evolving, both commercially and residentially, since the early 1990s when "older more obsolete commercial buildings were turned into residential projects", as part of Postcode 3000, he said.
Apartments were not "taking over" from commercial developments. "You'll find the market has a way of sorting these things out; economically things have to work," he said.
Frequently Asked Questions about this Article…
Analyst Charter Keck Cramer projected that from 2013 to 2016 about 313,355 square metres of office space will be built in central Melbourne, while 13,105 apartments (estimated at 50 m² each) will occupy around 655,250 square metres — roughly twice as much residential floor space as office space.
The article defines the central city region as Melbourne’s CBD, Docklands, St Kilda Road and Southbank.
CKC director Robert Papaleo warned that heavy focus on residential projects could damage ‘the economic vitality of Melbourne’ by allowing residential development to permanently displace traditional commercial sites, undermining the city’s long‑term workability.
Not necessarily — Colliers’ national director of office leasing Andrew Tracey says central Melbourne has been evolving since the early 1990s (including conversion of obsolete commercial buildings under Postcode 3000) and that market forces tend to sort these shifts out economically.
Postcode 3000 refers to policies and trends since the early 1990s that saw older, more obsolete commercial buildings in central Melbourne converted into residential projects, contributing to the city’s ongoing commercial and residential evolution.
The article notes that Melbourne’s continued economic growth requires a vibrant commercial centre with ‘new‑generation office floor space’ that meets business needs, implying that too much residential development without modern office supply could strain the city’s capacity to support business activity.
The projection estimated 13,105 apartments built at a conservative average of 50 square metres each, totaling about 655,250 square metres of residential floor space in central Melbourne between 2013 and 2016.
While Charter Keck Cramer expressed alarm at the residential tilt, Colliers’ Andrew Tracey suggested that a mature market adapts over time — noting historical conversions and saying that ‘economically things have to work,’ implying market forces will influence whether the trend persists.
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