Industrial bonanza sees values soar
Industrial bonanza sees values soar (The Age, 6/6/18)
(Text from the article "Industrial bonanza sees values soar", by Tim Boreham, The Age 6 June 2018)
In what one seasoned industry observer dubs “bonanza” conditions, Melbourne industrial land values have soared by up to 100 per cent in the last 12 months as a confluence of factors starts to bite.
The sharpest increases are apparent in the west, where some prices have doubled despite the former Cinderella region’s reputation for having an abundance of land.
Cushman and Wakefield national research director Tony Crabb said he had never such strong growth over two decades.
He attributed the trend to a lack of services land available for immediate development, increasing infrastructure costs and planning delays that prevent zoned land from getting to market.
“The incursion of residential into traditional industrial zones can be seen most clearly in the inner city, but also in the middle ring suburbs where industry is displaced to outer areas,” he said.
In the west, small blocks that traded for $190 per square metre three years ago would now trade for closer to $300 sq m.
Larger blocks that traded for $150 sq m are now trading for closer to $200sq m.
In 2015 the firm sold a specialist property, the 80 hectare Drystone Estate at Truganina to Charter Hall for $27 sq m.
Earlier this year Charter Hall acquired a neighbouring, 60 ha property for $95 sq m.
In the space of only 18 months, Cadence Property Group reports a 45 per cent increase in sales results for serviced land at its nearby, 40 hectare mixed use development, The Crossing.
“Around three years ago the Melbourne industrial land market was reasonably subdued,” Cadence managing director Charlie Buxton said. “This extended period of moderated development conditions generated a shortage of serviced land which has now come to a head very abruptly.”
Cushman and Wakefield’s research shows prices for vacant land in the south-eastern industrial belt have gained as much as 50 per cent, especially since the start of the year.
“Small blocks that traded for $325 sq m three years ago would now trade for closer to $500 sq m,” Mr Crabb said. “Larger blocks that traded for $200 sq m are now trading for over $300 sq m.”
In the north, the value of smaller blocks has gained more than 50 per cent (from $200 sq m to $400 sq m) with larger lots rising by around 30 per cent (from $170 sq m to $250 sq m).
The strength of the northern market stands to be tested with the latest stage release of MAB Corporation’s Alliance Business Park project at Epping, a banana’s throw from Melbourne’s new fruit and vegetable market.
Featuring 3.6 hectare of landscaped wetlands, the Gateway Boulevard development is expected to fetch record prices in the current sealed tender process.
New Office Warehouses, Warehouse Units and Warehouse stores in Point Cook now selling www.thebasepointcook.com.au
New Urban Workspaces in Brooklyn now selling www.workspacebrooklyn.com.au
New Urban Workspaces in Yarraville now for lease at www.thebaseyarraville.com.au