Melbourne CBD sees $42b construction explosion
Melbourne’s construction boom is further expanding with $42 billion of property and public infrastructure projects planned in and around the CBD, according to Savills.
A second wave of local and international investors from Europe, China, Singapore, Malaysia, Britain and the US, would be attracted by the projects, which include apartment towers such as the $900 million Australia 108, hotels, office towers and major infrastructure projects, including the $11 billion Melbourne Metro railway and $100 million Flinders Street station upgrade, the agency says.
Last week the Reserve Bank issued a pointed warning about growing risks from the apartment building boom and its reliance on Chinese investment, and the continued tightening of commercial property yields.
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The new wave of construction would see 110 approved projects totalling $42.035 billion set to commence in the next 12 months within 2km of Melbourne’s CBD, Savills says.
The stimulus provided by all of this development and new infrastructure is driving a whole new level of investment in Melbourne in all sectors of the commercial property market
“With such a strong pipeline of committed public infrastructure and private construction it is no surprise that investors are flocking to Melbourne from across the globe,” Savills state sales director Clinton Baxter says.
The Melbourne market has seen massive capital inflows from China, Malaysia and Singapore, while investors from other countries such as Canada, The Netherlands, Britain, the US and New Zealand have also purchased assets.
“The stimulus provided by all of this development and new infrastructure is driving a whole new level of investment in Melbourne in all sectors of the commercial property market,” Baxter says.
Melbourne’s apartment building boom will see a new round of projects led by Australia 108 in Southbank and the 92-level Aurora development near in the CBD.
This article originally appeared on www.theaustralian.com.au/property.