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The multi-storey building - which features a food court, a variety of shops and a car park - runs between Kent St and Teed St.
Crew from about 10 fire engines have been battling the blaze.
Kent st has been cordoned off to cars.
Juliette Veber was on Kent St and could see "grey billowy smoke" coming from the second story of the Newmarket Plaza foodcourt.
"I just saw smoke billowing out of the top of the carpark on top of the food court. It smells really smoky, everyone is outside watching."
One firefighter was in a cherrypicker being raised to the smoke's level, she said.
Veber could not see fire, only smoke.
A hose had been run into the foodcourt on the ground level, she said.
Josephine Rajaretnam was having lunch near the building when she saw fire engines and ambulances.
She walked past the smoking building at about 2.30pm at which point she said about 50 people were being evacuated onto Kent St.