New step to reduce vacant shops and boost business growth
Published on 09 December 2025
Frankston City Council will take another next step in driving local economic renewal, proposing a new differential rate on long-term vacant retail properties to reduce chronic vacancies and encourage active redevelopment across key commercial precincts.
The proposed measure will form part of Council’s Rating and Revenue Plan and reinforces Council’s commitment to improving activation, encouraging investment and reducing long-term vacancies in key commercial precincts, particularly in strategic nodes of the city centre and along the Nepean Highway where some of the city’s most persistent land banking has occurred.
The proposed differential rate builds on Council’s existing vacant FMAC and Nepean Highway Land rate introduced earlier this financial year, a strategy that has already begun to show positive results by prompting owners of underutilised sites to take steps toward redevelopment. Forty-five properties are currently subject to the existing rate, with further updates ongoing as redevelopment permits and occupancy certificates are processed.
Mayor Kris Bolam JP said the success of the earlier differential rate has demonstrated that long-term land banking has held the city back, and that applying the same approach to vacant retail properties will help unlock sites that have remained inactive for years.
“Our vacant FMAC and Nepean Highway land rate introduced this year has already helped shift underused land back into development and productive use. Property owners are recognising that staying idle is no longer cost-free,” Mayor Bolam said.
“Land speculation and land banking in these corridors, particularly along Nepean Highway, have prevented the delivery of much-needed infrastructure such as hotels, mixed-use development and new housing options. This is investment our community desperately needs, and leaving prime land inactive helps no one.”
“This new proposal aims to apply the same principle to long-term vacant shops, to ensure our city centre remains vibrant, active and appealing to residents and investors alike.”
Under the proposal, a property would be considered “vacant retail land” if it is designed for retail or general business use, has not traded for at least 90 days within the past 24 months, and has no active building or planning permits for redevelopment. The proposed differential rate, set at 300 per cent of the general rate, would not increase overall rate revenue due to rate capping but instead would redistribute it across different rating categories.
Mayor Bolam said this year’s Annual Budget demonstrates how that redistribution works in practice. “Because of the vacant land differential introduced in 2025-26 along with market valuation movements, average rate revenue from commercial ratepayers increased by around 1.12 per cent instead of the full 3 per cent cap, and average rate revenue from residential ratepayers increased by 2.24 per cent instead of the 3 per cent cap,” he said. “This shows that strategic rating tools can reduce pressure on households and businesses while encouraging more responsible land use.”
A retail vacancy audit undertaken in May 2025 identified 79 vacant shops across the municipality – a 19 per cent vacancy rate, consistent with broader metropolitan trends. Some precincts, including Young Street, recorded vacancy levels above the regional average. While many factors contribute to vacancies, Council has emphasised the importance of reducing chronic, long-term empty shopfronts that create barriers to investment, foot traffic and local jobs growth.
Mayor Bolam said addressing vacant shopfronts is central to the city’s long-term economic strategy. “Long-standing vacancies hurt not just building owners, but our entire community. Empty shopfronts discourage new tenants, reduce street-level activity and impact safety, amenity, and confidence in our city centre,” Mayor Bolam said.
“The success of our existing differential rate gives us confidence that applying the same approach to vacant retail properties will help unlock more development opportunities.”
Frankston Business Chamber CEO Bernadine Geary said the new proposal addresses a long-standing barrier to economic growth. “Introducing a differential rate for vacant commercial properties is a necessary step to discourage land banking. Active use of these sites will revitalise our retail precincts, attract investment, and deliver economic benefits for the whole community,” Ms Geary said.
Ms Geary said the measure aligns with demand Council and local traders are now witnessing. “Frankston City is turning into one of Melbourne’s most enviable suburbs. To meet demand, we need vacant commercial office spaces activated, not sitting idle, so new businesses can move in and grow,” she said.
Yamala Ward Councillor Nathan Butler said the proposed rate will work hand-in-hand with Council’s investment attraction efforts and business support initiatives.
“Council’s Economic Development team, through our free concierge service, continues to attract strong interest from businesses across hospitality, retail, health, wellbeing and specialty services,” he said. “This proposed rate supports that work by encouraging turnover of long-term vacant sites and strengthening the leasing environment for both new and existing businesses.”
He noted that the positive momentum in the local economy strengthens the rationale for the new measure. “Frankston City is experiencing robust growth, with more than 820 new small businesses established in the past 12 months, one of the strongest in the region,” Councillor Butler said.
“By combining proactive policies with support for business, we can ensure our commercial areas continue to grow in a sustainable, vibrant way.”
Council will write to all potentially affected property owners and key business stakeholders before the formal community engagement begins. Feedback will inform the updated Revenue and Rating Plan and be reviewed by Councillors prior to adopting the 2026–2027 Budget.
“Frankston is a growing, ambitious city,” Mayor Bolam said. “By balancing rate policy with business support and community consultation, we are preparing for a future where our city centre remains lively, prosperous and full of opportunity.”
Community engagement on the proposed differential rate will commence in February 2026. Sign up to Engage Frankston to receive updates and provide feedback to community engagement projects: https://engage.frankston.vic.gov.au
Businesses interested in relocating to or expanding within Frankston City can access free concierge support by contacting business@frankston.vic.gov.au or visiting the Business Concierge page on Council’s website at: https://www.frankston.vic.gov.au/Business-and-Growth/Starting-or-growing-your-business/Ask-our-Business-Concierge.