New Commercial 3 Zone

On 29 August 2018 the State Government approved Planning Scheme Amendment VC149 introducing the Commercial 3 Zone into the Victorian Planning Provisions. The  new zone is part of the Victorian Government’s broader program of Unlocking Enterprise is a Changing Economy, seeking to consolidate “Enterprise Precincts” throughout Melbourne. Enterprise Precincts are local areas to champion new enterprise, diversity of employment, and product and process development in dense, accessible and amenity-rich precincts. The focus of the precincts is also to promote innovative and enterprising mixed-use precincts, with niche and creative industries, start-up businesses and businesses leveraging off automation, post industrialisation and the digital economy. The new zone seeks to implement the State Government’s Planning Strategy Plan Melbourne Implementation Plan Action 8, to unlock enterprise in a changing economy.

The purpose of the Commercial 3 Zone includes:

To provide for a range of industrial, commercial, office and other employment generating uses which support the mixed-use employment function of the area.

To promote collaborative and high-quality working environments which support the area through good urban design and high-amenity, accessible and well-connected places.

To provide opportunities for limited retail uses which are complementary to the role and scale of the area.

To provide the option for limited residential uses that do not undermine the primary employment and economic development focus of the zone.

Under the table of uses in the zone provisions, many Commercial and Industrial uses are Section 1 uses (no permit required), including:

  • Food and drinks premises up to 150m2 leasable floor area;
  • Industry (limited to certain uses and buffer distances);
  • Manufacturing sales;
  • Office;
  • Research centres.

Dwellings and Residential Buildings are Section 2 (permit required) uses, conditional upon not exceeding 35% of the gross floor area of all buildings on site, or a variation if specified in the schedule to the zone. The residential component of any proposal will need to be assessed against the provisions of Clause 54, 55 and 58 (ResCode) depending on the form of that residential component.

With some exceptions, shops up to 200 square metres and warehouses up to 500 square metres leasable floor area are also Section 2 uses.

Buildings and works applications that are located more than 30 metres away from certain sensitive uses are exempt from notice and 3rd party review rights (application advertising and objector appeals).

The new zone essentially provides for a mix of uses with a primary focus on non-residential uses, the complementary but limited role of shops and other associated retail uses, food and drink premises, and places of assembly. However, residential uses too are permitted providing such uses do not undermine the primary employment and economic development focus of the zone.

It is now for local councils to start the process of identifying the location and scope of Enterprise Precincts, either in existing or planned urban areas, and to undertake the planning scheme amendment processes to implement the new zone. These areas will likely be traditionally industrial manufacturing areas which have lost their historic industrial tenants, and are now suitable for smaller enterprises.

Background documents to the Planning Scheme Amendment have identified a number of such areas in inner and middle metropolitan Melbourne, which have the potential to be affordable locations for a wide range of commercial and cultural activities, ranging from small scale manufacturing through to co-work office spaces, health and fitness facilities, creative industries and cultural facilities[1].

Further information on the new Commercial 3 Zone can be found at

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