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Haig St a sign of office trend?

Haig St a sign of office trend?

By Sean Car and David Schout

In what might prove a sign of things to come in the central city, developer Meydan Group has resubmitted a brand-new application for a 30-storey commercial office tower at 57-59 Haig St.

While the developer already has approval to construct a 39-storey residential tower at the site, it lodged a new application with the City of Melbourne for a development that would wholly comprise office space, as well as a ground floor café.

If approved, the 19, 386-sqm development would include 40 car parks as well as a rooftop garden.

In its application, the developer said the new development would fulfil the vision set out in the State Government’s Plan Melbourne strategy 2017-2050 by providing for the continued growth of knowledge and a high-skilled workforce.

From a Haig St perspective, it said that the development would rejuvenate what is currently an “underutilised and inactive street during the business day” and enhance the passive surveillance of the street by improving the pedestrian experience.

Meydan Group did not respond to Southbank Local News requests to provide comment.

The application comes in the midst of Minister for Planning Richard Wynne’s announcement that he is considering easing planning rules, which have successfully reduced approvals on new inner-city skyscrapers.

The planning restrictions, known as C270, were introduced by the state government in November 2016 after a spike in high-rise approvals under the Liberals.

Then planning minister Matthew Guy earned the unfavourable nickname “Mr Skyscraper” on the back of excessive height allowances for developers, and C270’s implementation has seen a definitive drop in approvals.

But recent comments from Mr Wynne have hinted the tight planning controls may be scaled back, primarily to address a drop in commercial office space vacancies that the Property Council has called a “serious cause for concern”.

In a recent interview with Domain, Mr Wynne conceded that the government needed to consider whether C270 needed “tweaking”.

Just two new CBD commercial office buildings have been approved in over two years under the amendment, which requires developers to meet stricter density, separation and public provision conditions before gaining approval.

A November report commissioned by the Property Council of Australia raised the alarm on low commercial office vacancies.

The Urbis report concluded that by 2036, the CBD would need a 50 per cent increase in floorspace of 9.1 million sqm – including an additional 4.4 million sqm of office floorspace - to accommodate future workforce projections.

“This report is a warning to policymakers that an immediate review of C270 planning controls is needed, with the impacts of this policy plain to see and cause for serious concern,” Property Council Victorian executive director Cressida Wall said at the time.

And it appears the report has had the desired impact, with Mr Wynne now willing to assess the industry body’s concerns.

“We’ll work with peak bodies to refine the regulations and ensure we continue to support a strong supply of commercial office space,” a government spokesperson confirmed to Southbank Local News.

The Property Council naturally welcome the news.

“(We have) advocated strongly for the need to change C270 and we’ve provided substantive research that paints a compelling need for change,” Ms Wall said.

“Changes to C270 are urgent – with buildings in the CBD taking between five and seven years to complete…we are approaching a significant cliff where CBD development drops off, unless the government acts swiftly to address the issues.”

But, is the property council being alarmist?

As well as this latest Haig St proposal, Cbus Property submitted an application prior to Christmas for a 55-level office towerat 435 Bourke St – another site originally slated as a residential high-rise.

And a host of large-scale commercial office developments are expected to be submitted for approval in 2019, including sites at 55 King St, 555 Collins St, 60 Collins St and 383 LaTrobe St.

It is believed the Planning Minister will begin reassessing certain aspects of C270 as early as February.

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