An $8.5 billion surge in developments and deals along Collins Street in the past three years has cemented the address as Melbourne's premier business boulevard.
But, for Lord Mayor Robert Doyle, it also underscores what is at stake if the development pendulum swings any further in favour of residential towers, which are already threatening to crowd out much-needed commercial development.
Cr Doyle is now pushing for greater controls to ensure commercial space – such as that seen along Collins Street – is not sacrificed for the faster development profits in high-residential towers.
Already, the world's most liveable city is becoming a victim of its own success. The pace of residential development was once on par with commercial building. Now the ratio of residential development to commercial is approaching five times.
The city's lord mayor sounded a warning at the launch of developer Mirvac's latest $750 million office project on Collins Street on Monday.
The boulevard, which now extends into Dockland, is host to much of the city's core business, Cr Doyle told the gathering.
Around it in central Melbourne around 5000 to 6000 apartments are being built annually.
Warning of shortfall
Jobs growth has been just as buoyant, and will require as much as 2.5 million square metres of office space over the next seven years. Yet only 1 to 1.5 million sq m of commercial space is in the pipeline.
"It's very important that we keep a focus on the fact that the business of the city is business," Cr Doyle said.
"I don't want to start seeing a shortfall as residential overtakes commercial."
Cr Doyle is calling for a reconsideration of the way planning rules are applied. One option could be for requirements for commercial towers – heights, separation and setbacks – to be less onerous with a stipulation the site could not be converted later into residential use.
"It's one way to rebalance, if you have different rules for commercial buildings from residential buildings," Cr Doyle told The Australian Financial Review.
"We've got to be looking at it now. We can't just let it run."
Sydney is facing a similar dilemma and is moving to redress the balance. Under draft plans the city will require all new developments over 55 metres to be at least half commercial.
Redevelopments of existing office towers will be limited to 50 per cent residential. Over the past four years development approvals in central Sydney have been on average two-thirds residential and one-third non-residential.
Mirvac chief executive Susan Lloyd-Hurwitz also recognises the quandary Melbourne and Sydney face.
"Every city needs a balance," she said on Monday.
"Liveable cities are 24-hour, seven-day cities. The old days of having a CBD empty out over the weekend are gone.
"Melbourne has been at the forefront of that. All of that very fine-grain development that has happened with the micro-bars, that really activated laneways and transformed Melbourne.
"There needs to be a balance. You can't have a totally residential city, you can't have a totally commercial CBD."