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In an address to Property Council members in November 2004, Lord Mayor Clover Moore acknowledged concerns that the Sydney CBD was running out of commercial capacity. She gave an undertaking to review these issues in 2005, a commitment warmly welcomed by the Property Council.
The Sydney CBD is the most important economic precinct in Australia. It generates 8% of our national GDP, is home to 10% of Sydney’s workforce and is the country’s largest and most important office market.
Yet the CBD is running out of space to evolve and grow.
The Sydney CBD is relatively small by international standards. It is bounded on three sides by harbour and parkland, and by the recent construction of residential towers to the south.
In 2001 the City of Sydney conducted a study to estimate the CBD’s capacity to provide for further commercial and residential development under existing planning controls.
The study’s findings indicate under existing policies the CBD currently only has capacity to accommodate a further ten years’ supply of new commercial space.
Yet the Sydney CBD will need to grow significantly as greater Sydney’s population and workforce grows by an extra million people over the next 25 years. Australia’s economy cannot afford the Sydney CBD’s growth potential to be limited in such a way.
With the CBD likely to be moving into a commercial development cycle, it is important to review these panning controls now to ensure it can continue to evolve and grow.
The planned redevelopment of the 22-hectare East Darling Harbour site will provide some growing space for the CBD, but not enough. It is also likely this redevelopment will be staged over time.
The Property Council of Australia believes the City of Sydney Council and the Central Sydney Planning Committee have an historic opportunity and an obligation to secure the commercial future of the Sydney CBD by addressing its existing capacity constraints.
We recommend the following set of initiatives be adopted.
Bring floorspace ratios for commercial development in the CBD in line with that of residential development, so the maximum attainable FSR in the A1 zone would be 14:1.
Exclude residential development from a new commercial-only zone to be established in the northern core of the CBD to secure this commercial precinct’s future.
Support a staged approach to the release of new commercial space in the East Darling Harbour precinct.
Introduce an incentive scheme to promote the redevelopment of lower grade commercial buildings of an additional 1:1 in floorspace ratio in exchange for a commitment to produce a five star Greenstar building.
Continue to champion the need for enhancements to the City’s public transport system.
Strongly advocate for the reform of strata title laws to provide a more workable mechanism to unwind a strata scheme at the end of a building’s economic life.
Together these initiatives would ensure the CBD’s existing commercial capacity is not further eroded by residential development and provide sufficient capacity to allow for future employment growth for many years.