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News release

Melbourne

Rethinking the Hoddle Grid: Melbourne’s CBD office stretches west

A decade of development in Docklands has changed how we think about Melbourne’s CBD grid.


JLL Research has released research analysing the changing shape of Melbourne’s CBD office market.

Ten years ago total office stock in the Docklands precinct was approximately 184,300 sqm. As at 2Q16 Docklands totaled approximately 788,100 sqm. 

The area bounded by Docklands Park / Flinders Street / Spencer Street / Etihad Stadium has become a precinct in its own right, colloquially referred to as the Southern Cross Precinct. Approximately 70% of all Docklands office stock both completed and under construction is in this area.

Well located with direct proximity to Southern Cross rail station and the Collins Street extension, the Southern Cross Precinct has become a seamless extension of the CBD. As a result the commercial centre of the CBD is being pulled west.

JLL’s Managing Director, Victoria, David Bowden, said. “We knew that The Southern Cross precinct had arrived as a destination of choice and had clearly started to become part of the Hoddle Grid when KPMG and Maddocks Lawyers made their decision to commit to Collins Square in 2013. Few thought at the time that professional services companies of that calibre would make the decision to locate themselves west of Spencer Street. Other tenants like AECOM have followed and will move into Building 2 upon completion later this year". 

JLL’s Research Manager, Annabel McFarlane said, “As the Southern Cross Precinct has become increasingly embraced by the financial, insurance and professional services sectors the effect has been to pull the centre of the CBD office market west. Over the last decade this has been largely at the expense of the midtown precincts as tenants have sought larger floor plates and new build projects. However, while this will continue, it is likely now that Midtown precincts will again benefit from further development”.

The next 10-15 years will see occupier trends amplified as the Southern Cross Precinct and Docklands itself become built out.  The $100m regeneration underway at Rialto, together with major office developments announced by CBUS at 447 Collins St and Mirvac at 477 Collins St, further reinforce the importance of Collins St and its extension as an important central spine connecting Eastern End precincts with Docklands.

“Who would have thought 5 years ago that Lendlease’s $1.9billion Melbourne Quarter office development, with a 174m frontage to Collins Street opposite Southern Cross Station, would be an infill site on Collins Street”, said Mr Bowden.