Latest survey by JLL reveals only 210 hectares left for large-scale development in popular Melbourne corridor
As little as two years’ supply of industrial land remains in Melbourne’s south eastern suburbs, according the latest survey conducted by JLL, a leading international real estate and investment management company.
After analysing acquisitions by listed and unlisted property trusts during the past decade, JLL found that just 210 hectares remained of available sites larger than 20,000 square metres, the size commonly deemed suitable for institutional-grade stock.
JLL’s latest survey, Melbourne’s Industrial South East, analysed land sales and take-up in the Melbourne region which includes traditional industrial suburbs such as Dandenong, Braeside and Springvale, an area now home to huge warehouse and retail outposts such as IKEA.
At a glance:
The report found that the precinct’s popularity, with good transport links and a skilled available workforce, contributed to land value growth of 14 per cent in the 12 months to June 2019 with land values rising by a remarkable 22 per cent in Mulgrave and 21 per cent in Springvale.
It also found that manufacturing is still the south-east precinct’s dominant land user, accounting for 32% of land take-up in the decade to 2019, followed by retailing, transport, postal and warehousing.
All up, JLL’s analysis found that the area has about 535 hectares of available industrial land as of June 2019 which is expected to provide between two and six years’ supply in an area prized for its proximity to ports and Melbourne’s affluent eastern suburbs.
The report also found that the south-east corridor has now become Victoria’s most constrained in terms of land supply.
JLL’s National Director – Industrial, Matt Ellis, said that since the peak of land take-up in the south-east in 2014, the area had recorded a series of above-average results putting further constraints on land availability.
“Since the peak in 2014, the precinct has recorded a series of above-average results, about 81.8 hectares per annum, compared to an average of 45 hectares from 2009 – 2013,” Mr Ellis said.
“We have assumed future take-up will be between 30 and 100 hectares a year. At these rates, just two to six years’ supply of sites larger than four hectares remain in the south-eastern suburbs industrial precinct.”
JLL is a leading professional services firm specialising in real estate and investment management and a Fortune 500 company with annual revenue of $16.3 billion with operations in more than 80 countries.
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