Government approves major Queen St tower as questions linger over market precinct density

A major new residential and student accommodation tower has been approved for Melbourne’s CBD, with the Victorian Government signing off on a 65-storey development at 400 Queen St that will deliver more than 1500 new homes metres from Queen Victoria Market.

Planning Minister Sonya Kilkenny announced the approval on March 25, describing the Sime Darby Property project as part of the state’s push to build more housing close to jobs, public transport and universities.

The $495 million development will include 693 apartments, 900 purpose-built student beds, office space, retail premises and an affordable housing contribution worth just over $8.2 million.

Located on the corner of Queen and A’Beckett streets, the tower sits south of the market and directly across the road from the broader Queen Victoria Market renewal area, and the approved Gurrowa Place redevelopment on Franklin St (highlighted in the image below).

When the proposal came before the City of Melbourne last December, councillors backed it in principle but used the application to highlight wider concerns about how the planning scheme’s floor area “uplift” system is operating. The project sought a floor area ratio of 28.62:1, well above the as-of-right 18:1 and originally proposed relying heavily on office floorspace and internal laneway connections as its public benefit package.

Lord Mayor Nick Reece said at the time the case showed Melbourne’s uplift arrangements were “out of date and are urgently in need of reform”. He was particularly critical of the office component, saying, “I’m not aware of anyone out there saying Melbourne desperately needs more office space.”

The final permit suggests some of those concerns were at least partly addressed. While office space remains in the approved public benefit mix, it has been reduced to 10 per cent of the total public benefit requirement, valued at $3.29 million, while affordable housing now accounts for 24 per cent, valued at $8.2 million, and publicly accessible open space links and an arcade make up the remaining 66 per cent.

Several of the city’s design and amenity concerns also appear to have been picked up in the permit conditions. The narrow northern easement toward Anthony St, which council officers had flagged for safety and entrapment risks, must now be closed to public access. The permit also requires more communal space for student residents, all student beds to be located in individual rooms rather than separated by “retractable privacy curtains”, more three-bedroom apartments, fewer studios, continuous planter edges along Queen St and 24/7 public access through the site’s internal open spaces.

Even so, the approval is likely to sharpen debate about cumulative density around the market. Last year, Friends of Queen Victoria Market president Mary-Lou Howie condemned the federal approval of Gurrowa Place, arguing the scale of development around the market threatened its heritage, trader viability and surrounding traffic conditions.

Long-time CBD resident Sean Kelly similarly questioned whether the broader market precinct pipeline was genuinely addressing housing affordability or simply maximising development yield.

With the state now approving another major tower on the market’s edge, those concerns are unlikely to disappear.

The government says the project is a vote of confidence in central Melbourne, while the $8 million affordable housing contribution is expected to support broader housing outcomes.

The state government said Victoria continued to lead the nation in home building approvals, but acknowledged more housing was needed.