DOCKLANDS, which is 48 per cent complete, has shifted the geographical heart of the Melbourne CBD to the west and is now the second-largest office precinct for prime-grade stock in the CBD.
According to Jones Lang LaSalle research, the 437,100 square metres of prime-grade stock in Docklands is more than all of Adelaide's.
It now constitutes 18 per cent of the Melbourne CBD's 2.44 million square metres of prime-grade stock, which in turn makes up more than half of the 4.27 million square metres in the CBD office market. Urban renewal authority Places Victoria says $8.5 billion worth of development has taken place in Docklands in the past 12 years.
JLL's Victorian managing director, Andrew Wood, said Docklands had been fully endorsed by the investment market, which was the ''ultimate test''. Tenants now include ANZ, NAB, Bendigo & Adelaide Bank, Axa, Medibank, Fairfax Media, Channel Nine, NBN Co, the Tax Office and Melbourne Water.
Mr Wood said many commentators maintained that Docklands had been a drag on the market and had stopped rents rising above a threshold. ''There may be some truth to this, but if it wasn't there I wonder where those tenants would have gone to satisfy the demand for campus-style, 'green', single-tenanted buildings - maybe to the suburbs, like Coles, or maybe interstate,'' he said.
''So, Docklands keeps the users in the Melbourne central activities district, which now includes Southbank, Docklands and the traditional grid. It has restaurants, entertainment, retail and hotels, so it is a fully integrated part of the CBD that over time will ensure Melbourne's broader CBD continues to build its credentials as a major international city.''
Mr Wood said some critics complained Docklands was too sterile, but all international cities had different precincts with their own feel. ''Docklands will never have the laneway vibe of the CBD's core precinct, or the retail appeal of Collins Street.
''However, Docklands offers a harbour feel around its campus office and residential areas, plus entertainment and connections not available to the CBD grid. These are of significant appeal to many major corporates.''
According to Places Victoria, more than $2.4 billion worth of private development (commercial and residential) was under construction on 16 projects in Docklands in 2011-12 - the most development in its 12-year history. This totalled about 350,000 square metres of gross floor area, including about 1500 apartments.
As of last month, there was $1.8 billion worth of construction under way in Docklands on 11 projects. When these are completed, the prime office market in Docklands is expected to grow to about 626,000 square metres by mid-2014 - about 24 per cent of CBD prime-grade buildings.
By 2025, Places Victoria forecasts that the area will have attracted a further $9 billion worth of private investment, with the number of residents expected to nearly triple from 7000 today to 20,000, and with the number of workers anticipated to double to more than 60,000.