Significant momentum building in the urban renewal space

Over the past few years, the term urban renewal has become a buzz word in Australian property development.  While urban renewal has been occurring in old cities throughout Europe and the US for a much longer time, what we’ve seen in Australia has been relatively small-scale.

Urban renewal means taking existing parts of the city in built form which have either been under developed or have been developed but are no longer required – and changing their use and changing their profile.  It is about rezoning and repurposing brownfield land, or land that was previously built on.  (Unlike greenfield land that has never been built on.)

A great example of this is the landmark Barangaroo project on Sydney’s CBD foreshores which is nearing completion. The Docklands in Melbourne has integrated Etihad stadium, Victoria Station and Heritage buildings, it is the biggest urban renewal project in Australian history.

We are now seeing that state governments want to release brownfields land, particularly brownfields land close to CBDs or close to public transport.  It’s no wonder, because most of this land is under-utilised or has fallen into disuse but is situated at valuable locations.  Unlocking its potential through redevelopment holds the promise of new residential, retail and employment spaces, and an invigoration of our cities.

But it’s not so easy to achieve this marvellous transformation.  The reason why these places are brownfield sites is because they were difficult to develop in the past.  A good example would be the Docklands in Melbourne which was flood-prone, so there had to be significant amounts of money spent to fix that problem and additional costs in building foundations.

The key cities really pushing urban renewal are Sydney and Melbourne.  Melbourne has 650 hectares of brownfield land in its inner areas.  This space means Melbourne can accommodate an additional million people and a million jobs in walkable distance to its CBD. This would transform Melbourne’s city shape and is a key part of Plan Melbourne.

Barangaroo

Barangaroo

Urban renewal is driven by the idea that the productivity of cities is much more concentrated in the dense inner areas than it is on the urban fringes.  Recognition of this is one of the reasons for major investment in suburban rail networks, because growing the CBD and inner city areas is the most productive way to grow cities.

We can expect significant momentum in urban renewal in the coming years.  This will be further accelerated by the amazing amount of traffic congestion which is likely to happen in Melbourne, Sydney and Brisbane over the next decade at an annual cost of $53 billion to the community. Urban renewal will be supported by major rail projects – the Sydney and Melbourne metro systems. It is envisaged that major mixed use development will occur at key stations and new transport hubs will emerge.

At MacroPlan we call it a new DNA for urban development, based on the principles of mixed use and live, work and play locally.

One of the interesting aspects of urban renewal is that it has really introduced the idea of place-making in Australia. We are getting great urban design which is authentic and recognizes that the way we live now is very different to only 20 or 30 years’ ago.  There’s an expectation that office and residential projects will incorporate mixed uses and have shops, cafes and services because we know these days people are often working outside the traditional 9 to 5 Monday to Friday and want to be able to conveniently access a broad range of services.

Barangaroo is a good example of how this plays out, with the site offering offices, residential space, hotel, casino, retail, food and beverage, and entertainment.

There is a growing demand for this kind of lifestyle and it’s not just the millennials, those people born after 1980, who are driving demand.  There are also many baby boomers wanting to come out of the suburbs and either retire or slow-down in an active area.  Urban renewal will be the primary city building theme for Australia for the foreseeable future.


 

About the author: 

Brian Haratsis is MacroPlan’s Founder and Executive Chairman. Brian is an economist and future strategist with over 30 years experience as an advisor to governments and major corporate clients throughout Australia and New Zealand. For more information or to discuss your property research requirements, please contact Amy Williams on 02 9221 5211 or amy.williams@macroplan.com.au.

 

 

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