Image: Flickr/DarrenStone

Melbourne’s office market is outperforming other capital city CBDs, a new City of Melbourne report has revealed.

The City of Melbourne’s Property Watch Report 2011 provides an annual update on the office, retail and residential property markets in the City of Melbourne municipality, including residential property in metropolitan Melbourne.

The latest report reveals that CBD retail and office space is at a premium and reaching capacity.

Lord Mayor Robert Doyle said the report clearly demonstrates that Melbourne is a very popular place to do business.

“We currently have 4.1 million square metres of office space in the CBD and Docklands but the availability of this space is becoming scarce as more and more businesses move in,” the Lord Mayor said.

“Melbourne’s office vacancy rate is just 6.3 per cent which is really very low when compared to Sydney’s vacancy rate of 8.2 per cent, Brisbane at 9.4 per cent and Canberra which has a vacancy rate of 13.4 per cent.”

“Fortunately, the development of Docklands and the addition of 95,500 square meters of office space in 2010 has allowed Melbourne to cope with the increased demand for space, with a large number of businesses and organisations making their home there.”

Going against national trends, retailers are also signalling their confidence in the CBD retail market by taking up retail space and pouring money into store refurbishments and improvements.

“Not surprisingly, retailers are especially flocking to our iconic laneways and arcades, with the vacancy rate there at an incredibly low 0.8 per cent,” the Lord Mayor said.

Chair of the Future Melbourne (Economic Development and Knowledge City) Committee, Cr Ken Ong, said that despite a cooling property market, Melbourne’s residential sector continued to report encouraging growth.

“Victoria remains Australia’s engine room for new housing and Melbourne continues to generate significant levels of new apartments, particularly in the inner city precincts,” Cr aOng said.

He added that the Property Watch report was a unique publication that gave a rare look into a range of industry perspectives.

“Melbourne investors, developers, businesses and residents would benefit greatly from the insight provided in this report,” Cr Ong said.

“It shows our city’s strong economic position and reiterates our need to continue to focus on maintaining this prosperity and helping businesses and the retail and residential market thrive.”

To view the report, visit www.melbourne.vic.gov.au/research.