The second phase of the Victorian State Government ‘reformed zones’ was released in May and introduces the reformed Industrial Zones and the new Commercial Zones which replace the existing Business Zones.  This follows the release of the new residential zones earlier this year.  The rural zones will be the final group to be released under this reform.

The purpose of the zone reforms is to create the “best zones in Australia for industry, councils and the community.”  The reformed zones are expected to reduce the need for planning permits in some instances, increase flexibility and growth opportunities and provide greater certainty to businesses.  The number of ‘as of right’ uses has increased to support mixed use employment.

The current five Business Zones are condensed into two Commercial Zones.  In the Commercial 1 Zone which replaces the Business 1, 2 and 5 Zones, the number of ‘as of right’ uses has increased.  Such uses include accommodation, exhibition centre, place of worship and retail premises.  Conditions restricting floor areas for selected section 1 and 2 uses have been removed to provide greater flexibility.  Controls relating to advertising signs have also been relaxed.

The Commercial 2 Zone, which replaces the Business 3 and 4 Zones, is intended to provide greater flexibility for office, business, restricted retail and trade supplies.  Office and shop have both become section 1 uses however, for a site to be used as a shop a number of conditions relating to location and floor area must be met.  Floor space restrictions have been removed for office and some retail uses.  Supermarkets are ‘as of right’ provided the floor area is not more than 1800 square metres.  Supermarkets of greater size, however, may be permitted subject to permit if the site is located within the urban growth boundary.  Most forms of accommodation are prohibited in the Commercial 2 Zone, with the exception of caretaker’s house, motel and residential hotel.


Industrial Zones

The amended Industrial Zones support business investment and industry by reflecting ‘present-day requirements’.

Changes include the removal of the floor area restriction for an office in all three industrial zones.  Councils are still able to specify maximum floor spaces by introducing a schedule to the zone via a planning scheme amendment.

The most significant change has been to the Industrial 3 Zone.  A new purpose to the zone permitting small scale retail developments in appropriate locations has been added.  In order to facilitate this change, convenience shops, small supermarkets (less than 1800 square metres) and associated shops (up to 500 square metres) are ‘as of right’ uses.  Supermarkets and shops above these specified areas are prohibited.

In addition to the above changes to the Commercial and Industrial Zones, the Priority Development Zone will be removed from all planning schemes, with land currently zoned Priority Development moved into one of the two Commercial Zones or Activity Centre Zone by way of a planning scheme amendment.

The new Commercial and Industrial Zones came into effect on 1 July 2013.

Further information about zone reforms can be found on the DPCD website: