According to a report by specialist property consultants Urbis released last week, a looming shortage of office space in Melbourne’s CBD could ultimately cost the state economy as much as $7 billion in lost jobs.
The 104-page report, commissioned by the Property Council of Australia – which is pushing for reforms to CBD planning rules – analyses expected growth in the city’s working and residential population to 2036.
To accommodate that growth, Melbourne’s CBD will need another 9.1 million square metres in floor space, including 4.4 million sq m of commercial space.
Under current controls, and taking into the extent of constrained land, the CBD is “theoretically capable of accommodating the required floor space growth, but only just”, the report found.
The Urbis report extrapolates the impact of a constrained CBD for lost jobs if the amount of office space required cannot be developed.
That amounts to $7 billion because CBD jobs generate more economic value than jobs outside the CBD.
In 2016, Melbourne’s CBD produced $67 billion towards the national economy, just behind the Sydney CBD’s $81 billion contribution.
Get used to hearing this good-news story – strong population and jobs growth in Victoria continues to have a major effect on all aspects of the economy, businesses of all sizes are expected to prosper in the coming years.
By Lee Xie (Senior Project Manager)
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