City of Melbourne Approves $620 Million Mixed-Use Precinct on Victoria Street

The City of Melbourne has rubber-stamped a $620 million plan for a sweeping new mixed-use precinct along Victoria Street, just two kilometres northwest of the CBD. Approval came late Thursday for the project, spearheaded by Peninsula Developments in collaboration with Japanese property giant Mitsui Fudosan.

Inner-city transformation gathers pace

This green light arrives as the city’s appetite for strategic, high-density housing faces both opportunity and resistance. With international migration fuelling Melbourne’s population rebound—latest ABS data shows Greater Melbourne swelled by 141,000 residents in 2025—the pressure is squarely on for new dwellings near jobs and transport. North Melbourne, sandwiched between the medical precinct and Queen Victoria Market, has become a hotspot for such redevelopment efforts.

The approval unlocks 998 new apartments across four towers, reaching up to 22 storeys at the intersection of Victoria and Peel Streets. The masterplan includes 6,200sqm of public gardens that will connect into the broader Royal Park corridor, with a new pedestrian plaza slated opposite the Queen Victoria Market’s heritage sheds. A retail laneway will be stitched through the site—much like the redevelopment of the former Younghusband site in Kensington, which has become a model for adaptive reuse in recent years.

Nearby, the Elizabeth Street tram stop and Royal Melbourne Hospital offer quick links to the CBD core and Parkville’s medical hub, factors repeatedly cited by Planning Minister Sonja Adams in her determination. With vacancy rates across the municipality stuck below 1.3% according to Domain’s June figures, the council has fast-tracked approvals for projects that boost rental supply and public amenity.

Demand drives rapid approvals

Rents and prices have been rising steadily north of the Yarra. Median apartment values in North Melbourne have climbed 6.8% over the past 12 months, hitting $657,000 according to PropTrack. The city’s median house price now sits just over $920,000, further straining first-time owner budgets and pushing more buyers and renters toward well-connected mid-rise stock. The council estimates the Victoria Street precinct will house more than 2,500 residents when complete, with 12% of the units earmarked for affordable housing.

Community groups like West Melbourne Residents Association have signalled tentative support, provided promises around open space and traffic management are kept. Meanwhile, retail lease agents are already reporting strong enquiry from hospitality brands thanks to the project’s proximity to the iconic Queen Vic Market and the soon-to-open Metro Tunnel.

Construction is scheduled to start in February 2027, with the first tower expected to welcome residents by late 2029. Prospective buyers and renters can register interest from October, with display suites opening on-site next March. The city says the council will monitor noise and environmental impacts during the build, and locals will be kept informed as public realm works commence. For those seeking a home close to transit, green space and the CBD, North Melbourne is rapidly cementing itself as a frontrunner for the city’s next chapter in high-density living.