Melbourne, 7 July 2014- The area of Melbourne North is experiencing good activity in the industrial market according to the latest figures from CBRE.
At the commencement of 2014, vacancies for buildings above 10,000sqm sat at approximately 180,000sqm. At the end of April, that figure had dropped to 90,000sqm and included a recent large lease transaction, a third party large transaction and a third significant lease under negotiation, all in the last six weeks alone.
Dean Hunt, CBRE’s Senior Director, Industrial & Logistics, recently completed a lease extension for Linfox at 16-28 Transport Drive, Somerton which is a 21,276sqm building for a four year period at an undisclosed sum.
“The Linfox lease is another in a line of transactions we are seeing in Melbourne’s northern industrial market. This volume of absorption in the northern suburbs of existing leasing has not been experienced for some time and should this continue through the remainder of 2014. Absorption is likely to be at highest levels in the northern suburbs in the 10,000sqm plus bracket for many years,” Mr Hunt said.
“A key differential with the northern industrial sector compared to the south eastern and western regions is the lack of speculative development. Vacancy is mostly a result of lease expiry,” he added.
However, figures from CBRE’s Research Manager, Mark Lafferty, state this is due to change towards the end of 2014, with a huge rise in the development in the north off the back of pre-committed buildings rather than speculative development.
“The rate of development in the northern industrial market is equal to the past four years combined. Development is being driven by compressing yields, an increased occupier demand and the requirement for landholders to develop land currently on their balance sheet,” Mr Lafferty said.
Current development in Melbourne
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