Industrial action boosts Melbourne's south-east

Industrial property sales in the south-east accounted for 50 per cent of the sector's turnover last year, according Savills Australia.

Industrial property sales in the south-east accounted for 50 per cent of the sector's turnover last year, according Savills Australia.

While Melbourne's south-east saw the greatest number, the overall value of transactions across the metro area fell over the year.

Recent sales include 69 Studley Court in Derrimut for $20 million and 37-49 Browns Road in Clayton for $19.55 million.

Sales to June were $21 million below the previous year, Savills' Industrial Spotlight said.

The Pellicano Group and ISPT have moved to take advantage of the south-east's more robust performance, offering 21-hectare englobo subdivision for sale with expectations around $16.5 million. The site, in Dandenong's Innovation Park, is being sold by Jones Lang Lasalle's Kosta Filinis and Cameron Industrial's Ben Cooper, and has approvals for a two-stage, 36-lot subdivision.

Speculative development and competition from prime backfill and sub-lease space has pushed Melbourne's industrial vacancy rate to its highest level since April 2011, Knight Frank research shows.

Despite the rise, vacancy rates remain below their historical average.

There was 496,000 square metres of vacant space available in the three months to June - an increase of 86,000 square metres on the previous quarter.

Nine speculative developments were under construction, which added about 48,000 square metres over the same period, the research found.

"The industrial market is now at a stage where rents may grow more in line with construction costs [3 per cent to 4 per cent per annum]," Savills advised.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles