Sonic Healthcare revealed as new owner of former Costco site in Docklands

Docklands’ former Costco site is set for a new lease on life, with Sonic Healthcare officially revealed as the purchaser behind a major development proposal to transform the prominent site into a high-tech research and development centre.

City of Melbourne councillors will consider the proposal at their June 17 Future Melbourne Committee meeting, with Deputy Lord Mayor Roshena Campbell describing the site at 331–338 Footscray Rd as “important to the future of Docklands”.

“Given its size and prominent location, any plans to repurpose this site must deliver a strong and positive contribution to the area,” Cr Campbell said.

“This is a major development proposal that would reshape The District Docklands precinct – and will be carefully considered by council.”

The $92 million adaptive reuse proposal would see the existing Costco warehouse converted into a 24-hour pathology centre for Sonic Healthcare subsidiary Melbourne Pathology, bringing more than 700 workers into the precinct each day.

The proposal – which falls under the state government’s Development Facilitation Program due to its economic and public benefit – outlines an expected worker spend of $25 per person per day, amounting to a potential $6 million annual injection into the local economy.

While the City of Melbourne will review the application, the project ultimately falls under Ministerial control, with the Victorian Government responsible for the final decision.

The revelation confirms earlier exclusive reporting by Docklands News in January, which first flagged the site’s sale to a “medical institution” with plans for pathology and research.

Costco had announced last year that it would close its Docklands warehouse and relocate to Ardeer, prompting community hopes that the site might be repurposed for a new local secondary school.

However, the sale to Sonic Healthcare has dashed those hopes, with the state government continuing to plan for future school provision in Melbourne’s inner north and west, including Docklands.

The loss of the site for educational use has disappointed some local families, particularly following the overcrowding issues at Docklands Primary School, which led to the establishment of an overflow campus at The District Docklands in 2023.

Despite this, the proposed medical facility is expected to revitalise the northern end of Docklands and strengthen The District Docklands precinct with a new stream of daily activity.

The project would also make use of existing infrastructure and bring a new employment base to Docklands 365 days of the year at a time when the area continues its post-pandemic recovery.