Colliers International witnesses unprecedented demand for off-the-plan industrial assets in Melbourne’s outer-east
Strata office warehouses in Melbourne’s outer-eastern industrial suburbs, such as Knoxfield, Nunawading and Clayton, are being hotly contested in an unprecedented wave of demand for off-the-plan commercial assets.
The record low interest rate environment, Melbourne’s booming population and the proliferation of online business are among the factors fuelling sales, according to Colliers International’s Andrew Chrapot.
“Strata units are becoming the obvious purchase choice for commercial buyers – they’re a cheaper alternative to offices and storage, and they’re in all-new estates close to major arterials and/or quality amenity,” he said.
Mr Chrapot, a sales executive operating in the outer-eastern suburbs, said his team had experienced heightened demand from self-managed superannuation fund buyers, investors and owner-occupiers.
“We’ve experienced a noticeable surge in demand from local owner-occupiers and investors ahead of July 1, when the stamp duty legislation will cease for off-market sales,” he said.
During the past 18 months, 183 strata units have been constructed at Knoxfield and Rowville, achieving between $2,200 and $2,600 per sqm, while 159 units have been constructed (or are with council for permits) at Clayton and Springvale, achieving $2,800-$3,000 per sqm.
During the past 12 months, more than 147 units have been constructed (or are in planning stages) at Nunawading and Mitcham, achieving between $2,850 and $3350 per sqm.
“Knoxfield is within close proximity of EastLink and other core industrial hubs, Clayton is part of the Monash National Employment and Innovation Cluster, and Nunawading and Mitcham have easy access to the Maroondah Highway retail strip,” Mr Chrapot said.
“These locations are strategic options for commercial businesses.”
More than 150 units have been planned for construction in Keysborough and Dandenong, priced between $1,900 and $2,500 per sqm, while more than 140 units have been planned for Braeside, Dingley Village and Cheltenham, priced between $2,800 and $3100 per sqm.
“While supply of units is high, the demand is there,” Mr Chrapot said.
Mr Chrapot said the decline of Australia’s manufacturing industry and subsequent rise of e-commerce were key factors in the growing appetite for strata units.
“Start-ups and import/export businesses that need small spaces with cubic capacity are very common purchasers,” he said.
“Many of them schedule a 20- to 40-foot stock container drop-off and pick-up once a week and need space to accommodate this.”
Mr Chrapot said the ongoing appetite for strata office warehouses was expected to evolve into a desire for “hi-tech” warehouses, which were gradually increasing in popularity among developers and owner-occupiers.
“Hi-tech warehouses have higher office-to-warehouse ratios, usually between 20 and 35 per cent,” he said.
“They are more expensive than normal office warehouses and therefore need to be built in specific areas – the Monash precinct, for example, due to its proximity to Monash University, the Australian Synchrotron, the Monash Medial Centre and the freeway.”