[+] Launching Satellites: Melbourne’s Need for Second Cities

“Why don’t we build a brand new city, somewhere between Melbourne and Geelong?” LK Property Group founder and chairman Larry Kestelman put the idea forward at The Urban Developer ’s Melbourne 2024 Property Outlook event staged in February, saying, “We have the land”. The idea was floated as a housing-crisis buster—but could it work? Creating a second city The idea, and creation of, second cities is not new. In Australia, the most notable and current example is the under-development Bradfield next to Sydney’s second airport as well as the seemingly ever-growing Parramatta, both part of the NSW Government plan to create cities as important to the state as the capital. Kestelman says that’s how Sydney is solving its housing supply problem. In Victoria, cities including Geelong and Dandenong have taken on the mantle of second cities. Establishing Dandenong, 35km south-east of the centre of Melbourne, as a second city is part of the thinking behind the Dandenong Centre Revitalisation project between Development Victoria and Capital Alliance to revamp the CBD with several highrises and a new space for Little India rolled into those plans. ▲ A concept render by DKO Architects for the revitalsed Dandenong City Centre. The project has been under way since the early 2000s with some projects completed and community consultation undertaken for others. It is hoped that the plan will create housing and bring people back to the retail and offices within the city centre. Meanwhile, the City of Greater Geelong has long been considered by many as a second city. In 2016, the Committee for Geelong authored a report, Winning from Second: What Geelong Can Learn From International Second Cities after partnering with the United Nations Global Compact—Cities program and RMIT to tour eight second cities overseas. That led to a plan in 2018, the Second City Policy Framework. The findings underscored how not acting fast enough to help develop second cities had led to decreased employment and a lack of economic growth. Geelong has moved to address five key themes in that framework: governance; economic prosperity; social, cultural and sporting excellence; health, education, inclusion and accessibility; and infrastructure and connectivity. It lobbied to become one of the venues for the Commonwealth Games with the promise of much-needed upgrades to sporting venues and facilities, lost when the Games were cancelled . A new port terminal brought the city the Spirit of Tasmania ferry service from Port Melbourne, ensuring an increase in tourist numbers, which is driving a need for tourist and worker accommodation in the city. ▲ LK Group chairman Larry Kestelman speaking at The Urban Developer Melbourne Property Outlook 2024 event last month. Geelong has also since encouraged industrial and commercial development with many national and international companies moving their offices to the city. But as Melbourne and Geelong expand as their populations surge, the effect is being felt along the strip between the two cities. That strip of suburbs is now the fastest-growing growth corridor in Melbourne. Many suburbs within the western growth corridor are experiencing an uplift as developers file plans for masterplanned communities, new neighbourhoods, apartment blocks and townhouses. Having Geelong as the nearest city also brings advantages: it offers a shorter commute to work and flights, international and domestic, are by-and-large cheaper from the nearby Avalon airport. ▲ The new $135-million Spirit of Tasmania Quay at Geelong Port. What’s in a name But what Kestelman is arguing for is another city, a new city, between Geelong and Melbourne. “That opportunity is between Melbourne and Geelong so from a government’s point of view, how do we add more services? How do we encourage more businesses, offices, schools? How do we develop that?” Kestelman said. Oliver Hume project marketing chief executive Julian Coppini wonders if that region might not be quite the right spot, given Geelong’s expansion. “Geelong is actually a satellite city itself,” Coppini says. Coppini thinks that satellite or second cities are more ideally located elsewhere in the greenfields. “We think anywhere really in the greenfield market,” he says. “Each corridor would have its own satellite city.” Coppini thinks satellite cities or second cities are the same as the intermediary cities experts have proposed. “We see that as the same idea as a satellite city—where you can find employment not in the CBD but in the area, where there are hospitals and public amenities as well as employment opportunities,” he says. ▲ The Aerotropolis project in NSW will cover 11,200ha including a new city, Bradfield. Experts have argued that Victoria’s planning efforts should be focused on key hubs or intermediary cities serviced by infrastructure and transport connections and with specific uses, such as the higher education and research focus of the City of Monash. This would allow people to live and work around these hubs rather than them needing to live hours from their work as they choose either long commutes or less affordable housing. However, the Victorian Government is continuing to focus on infill development of mainly middle-ring suburbs, aiming to increase density. “That’s a major problem,” Coppini says. “We think the Government should be more like the South Australian Government and be pro-greenfield development, just simply to accommodate the growing population.” Coppini says that the Victorian Government missed the opportunity to develop second cities when residents moved to regional areas during the pandemic. “There was strong momentum ... then it sort of fell by the wayside and then it all came back to the middle ring for the Victorian Government,” he says. Coppini says that NSW is able to create satellite cities because of how well serviced the locations are. ▲ NSW is due to introduce the Mariyung fleet of trains to its intercity services in the second half of 2024. “Infrastructure and upgrading existing transport infrastructure—that’s key,” he says. “We know a lot of the satellite cities were well serviced in that regard. “And you’ve got to make it affordable because there’s no point in building satellite cities if it is not going to be affordable for the growing population.” So if not between Geelong and Melbourne, then where would a new second city be? “Werribee would make sense,” Coppini says. “That Tarneit-Wyndham market is already growing, there are a lot of medical centres in that precinct and once that is delivered it will create employment prospects. “So that part of the western corridor makes sense because the work’s already been done. “But the next one after that? We will have to wait and see.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] Launching Satellites: Melbourne’s Need for Second Cities

Creating a second city

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