Demand for office space in the Melbourne CBD, resulting in a boom of commercial developments is to thank for the number of cranes filling the skyline.
Commercial developments currently account for 21 cranes on the Hoddle Grid, over half of which are in use on just five projects.
Office vacancy in the CBD sits at the bottom end of 3%, making it the most in-demand area in the country.
Despite the latest RLB Crane Index reporting Melbourne’s net crane amount contracting, demand in the commercial sector continues to soar.
The total number of cranes allocated to commercial projects excludes those for mixed-use developments, and the count remains higher than it was in 2018.
Related News: Sydney Continues Lead as Crane Capital
Charter Hall Managing Director David Harrison says the development of Docklands halted the growth of new office buildings on the Hoddle Grid, but that the harbour front’s vacancy is now limited.
“You’ve obviously had nearly one million square metres of office added to Docklands in the last 20 years which has somewhat removed the viability of new development in the CBD.”
The state government’s C270 concession limiting building height and floor space ratio has also played its part in the historical lack of new development.
Demand for modern, dynamic workspaces with larger floor plates means modifying existing buildings is no longer viable, thus the wave of activity from developers including Mirvac, Brookfield and Cbus Property.
A number of developers have been forced to purchase and amalgamate neighbouring sites in the CBD to create larger buildings and accommodate shifting trends.
Melbourne is set to receive an estimated 600,000sq m of new office space over the next 3-4 years, with developers moving into fringe suburbs such as South Melbourne and Cremorne in order to identify viable space.
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