Land In Demand Across Melbourne's Industrial Markets

Melbourne’s industrial markets have been characterised by strong sales of retail industrial lots in the first half of 2015, with both owner-occupiers and developers targeting land for development.

According to new Colliers International research, a gradual fall in the value of the Australian dollar since September 2014 has resulted in more confidence in the manufacturing sector in Australia.

“This trend particularly benefits Melbourne, where manufacturing has always had a strong presence,” C0lliers International Associate Director of Research Anneke Thompson said.

ALSO SEE: Industrial property on rise in Melbourne's North West 

“Coupled with historically low interest rates, owner-occupiers as well as developers are taking the opportunity to purchase serviced lots for development."One of the larger deals to occur this year is the $165 million investment that Dulux will be making at MAB and GPC’s Merrifield Business Park in Melbourne’s north to establish a paint factory.

In the City Fringe, many industrial sites continue to be viewed as more valuable as residential development sites.

“The City Fringe continues to undergo structural change, where existing development sites are sold for residential conversion,” Ms Thompson said. “In Abbotsford, two sites owned by the Wyllie Group at 2-6 Southampton Crescent and 32 Duke Street were sold in November 2014 to Shandong HYI, a major Chinese developer for a total of $20.7 million.

[urbanRelatedPost][/urbanRelatedPost]“The sites are currently leased to CUB, who has a major presence in Abbotsford, until 2017, but they are expected to be major residential development sites in future."Another major residential development is expected to emerge nearby at the Richmond Malt site, home to the famous Nylex clock, which Colliers International sold to developer Caydon for $38 million in December.

Ms Thompson said an interesting site to watch was the 35ha site on Footscray Road in West Melbourne currently occupied by the Wholesale Fruit and Vegetable Market.

“The market will move to its new site in Epping in August of this year and at present it is unclear what will happen to the state-owned site,” she said. “The site represents the largest sole ownership development site in the City Fringe, and, location-wise, is suitable for a number of different uses.

“Its proximity to the Port of Melbourne, however, as well as the upcoming sale of the Port’s leasehold, means that an industrial use, or even a tie-in to the Port sale, has potential."