CBD Dry Up Causes Developers to Move Sights to Southbank

Melbourne’s largest private apartment developer

Central Equity has lodged plans to develop a new 50-level tower in prestigious Southbank.

If plans are approved for the 165 metre high-rise block at 54-68 Kavanagh Street, this will bring the number of dwellings planned for the suburb to 3350.

According to the SMH, Planning Minister Matthew Guy is now considering the seven Southbank towers.

This will see it rival the CBD's breakneck development pace as industry speculation grows that another tranche of skyscrapers are likely to be approved before the government goes into caretaker mode on November 4 for the state election.

Central Equity's latest proposal includes 720 apartments, 417 car spaces and 490 bike lots in a building with a nine-level podium stretching between Kavanagh and Fawkner streets.

JLL's Victorian sales and investments director James Kaufman said that as potential development sites dry up in the CBD, domestic and offshore developers were likely to focus on Southbank.

"On the construction front, there are currently four major residential projects being developed in Southbank. This pipeline will deliver 1895 apartments to market between 2014 and 2015," Mr Kaufman said.

About 80 per cent of Southbank was yet to be fully developed under the current planning controls, the JLL report Transforming Southbank: From Industrial to Residential says.

Southbank could add 4 million square metres of gross floor area by 2040, equivalent to 45,040 dwellings, the report states.

That would support the anticipated growth of the residential population to 58,550 and working population to 53,470 – a 557 per cent increase.

The suburb's rapid expansion has prompted concerns about the lack of facilities including schools, post office and open spaces.

"Over the past 20 years, the number of apartments in Southbank has risen from less than 600 to 10,000 by the end of 2013, and land has increased from less than $1000 to $15-20,000 per square metre," Mr Kaufman said.

Most of the growth in land values has occurred since 2008, he said.