The Docklands precinct and Southbank have ousted the CBD as the focal point of new office development in Melbourne.
A new report from Savills Australia indicates that the Docklands precinct and Southbank outpaced the Melbourne CBD in terms of new office supply over the past decade, adding a 572,000 square metres to stock as compared to 560,000 square metres for the downtown area.
Savills sees Docklands and Southbank jointly maintaining its lead over the CBD during the next decade, accounting for the majority of Melbourne's new office supply.
The report notes that Docklands is enjoying increased popularity due to the increased flexibility offered to developers of office property seeking to pursue greater innovation. According to Savills Docklands and Southbank are both more accommodating of new type of office culture which places a premium on higher quality space as well as more sustainable and efficient forms of development.
This rising popularity has deprived the Melbourne CBD of key development opportunities, with 30 sites suitable for office construction sitting idle for the past several years, and major tenants eschewing the downtown area to sign numerous pre-commitments to new stock in the Docklands precinct.
A report released by consultancy firm PricewaterhouseCoopers in March found that Docklands and Southbank were the fastest growing areas in the state of Victoria, depriving the Melbourne CBD of much of its momentum by luring away the main offices of key companies including Myer, National Australia Bank and ANZ.
According to the report Docklands and Southbank had transformed themselves into a major economic force for both Melbourne and Victoria, contributing nearly $16.5 billion to the regional economy last year.
Figures from the ABS further indicate that the heart of Melbourne has become the fastest growing area in Australia in terms of population, with the number of people living in the Melbourne CBD surging by 23 per cent in the year to June 2013, and the Docklands precinct and Southbank logging growth figures of 15 per cent.