Colliers International expects significant growth across the south east, western and northern industrial markets in 2016. One of the first major listings for the year will be a substantial land opportunity.
Globally, there continues to be significant change to the location of manufacturing facilities. According to Colliers International research, China is now becoming more expensive due to increasing labour costs and there is a shift to less expensive locations such as Vietnam, or even re-shoring of manufacturing which is becoming increasingly prevalent in the US. Manufacturing firms in China are now acquiring offshore manufacturers and importing that expertise into their local facilities.
"There is no doubt that the importance of manufacturing to the Australian economy continues to decline," Tony Iuliano, Colliers International National Director of Industrial, said. "Over the past decade, manufacturing employment has declined by 120,000 people. At the same time there have been some increases, with food manufacturing employment actually rising by 9,300 people.
"Although relatively moderate, Australian food continues to be in demand globally and while much of this is shipped offshore in its raw state, there have been many instances where the manufactured product is considered more desirable primarily because of Australia’s clean, green image.
"This increased appetite for Australian agricultural assets from Asia will lead to a new wave of demand for warehouse and storage space in some of Melbourne’s most popular industrial precincts. The Melbourne western industrial market in particular is experiencing a new wave of demand from this sector, as Asian consumers – particularly Chinese consumers – continue to demand our high quality and very safe agricultural produce. Demand for Australian-made infant formula from China has significantly impacted demand for warehousing and storage space in the West, and there are a number of deals in motion that should highlight this trend over the upcoming months.
"As 2016 commences, the Victorian industrial market will continue to dominate on a national scale. We expect to see significant growth across all our key geographic locations, in the south east, western and northern markets. Demand and capital will continue to flow into the Victorian industrial market, with a strong appetite for core logistics assets.
"As housing construction continues, the need to warehouse and manage household goods that consumers purchase to furnish these new houses continues to drive industrial demand. Owner occupiers continue to drive enquiry in our Victorian industrial offices. Transport occupiers are still very active, and many have requirements for heavy duty hardstand and loading docks sub-5,000sqm.
"The investment market will also continue to go from strength to strength, as a multitude of buyer types search for prime grade facilities to purchase with strong tenant covenants and reasonable WALEs.
"The Port Melbourne area in particular will attract keen interest in the New Year, as it continues to be characterised by a major change in usage – that is, from a predominately industrial area to one now highly sought after by residential developers. This may open up an opportunity for an automotive precinct elsewhere in Melbourne, perhaps in an area such as the inner west."
Agents in Melbourne’s western industrial market, in particular, have hit the ground running in 2016 with the listing of two significant parcels of land within one of Australia’s fastest growing industrial and residential regions.
Colliers International’s Nick Saunders, Stephen Newsham and Milton Tsaktsiras have been appointed to sell a combined 26.4ha site by Expressions of Interest closing Wednesday February 24 at 3pm.
Mr Saunders said the properties at 171 Leakes Road and 100 Palmers Road in Truganina represented a rare opportunity just 16km from Melbourne’s ports and CBD.
“The properties are situated near the prominent corner of Leakes Road and Palmers Road in Melbourne’s west, one of Australia’s most popular industrial precincts,” he said. “The Kororoit Creek Road/Princes Freeway full diamond freeway interchange is only 2.5km away from Leakes Road, whilst the Robinsons Road/Deer Park Bypass entry and exit ramps via Palmers Road are just minutes away.
“The sites are ideally suited to a range of development options including a prestige business park, land subdivision or occupation by a major corporate organization, all subject to council approval."
The properties have combined main road frontages of approximately 430m and are currently zoned Urban Growth Zone (UGZ) – Schedule 2.
171 Leakes Road is a 12.14ha site with 217m frontage to Leakes Road, while 100 Palmers Road is a 14.26ha site with 213m frontage to Palmers Road.