Developers chase Melbourne industrial land
Developers seeking construction-ready sites are driving another industrial boom in Melbourne, with more than $200 million worth of land sold in the south-east alone in the last year, according to new research.
Data from Savills shows more than 600,000sqm of serviced industrial land – most of it near EastLink in the Dandenong Logis Estate and The Key Industrial Park – has been sold in the south-east in the last 12 months as developers race to secure a foothold in the region.
Savills’ Victorian research manager Monica Mondkar says another 400,000sqm of industrial space is in the planning stages, while more than 145,000sqm of developments over 5000sqm are already underway.
End of an era: Automotive industry braces for space race
Those figures include 318,973sqm of warehousing space in the early planning stages at Melbourne Airport, with another 93,715sqm in the city’s north.
The data doesn’t factor in developments under 5000sqm, which Mondkar says could conceivably be greater in collective size than projects over 5000sqm.
Among recent deals, a private Melbourne-based developer bought the three remaining vacant blocks of industrial land totaling 7000sqm at Hallam Central Business Park for just over $2 million with plans for speculative development,.
And in the west, 13 development sites totaling 12.8ha at Goodman’s Westside Industrial Estate, also set for speculative development, sold for more than $20 million over just four weeks in January and February.
Savills Industrial senior executive Michael Jones says Melbourne’s industrial market continues to see strong action.
“There are only eight serviced lots currently on the market in Dandenong/Keysborough and that is a reflection of a much more positive sentiment in the market, with further proof in the speculative construction which will follow,” he says.
“Leasing is up over last year and up considerably over the long-term average and perhaps the most significant part of that rise has been in pre-commitments.”
The research shows 871,836sqm of industrial space was reported leased in the 12 months to March in Victoria – up 36% on the five-year average figure of 641,328 square metres – with pre-commitments accounting for 309,691sqm.
Among recent leasing deals is AstralPool’s uptake of 21,500sqm of office and warehouse facilities at Frasers Property’s The Key Industrial Park in Keysborough, and Dana Australia’s lease of 10,000sqm of similar facilities within the same precinct.