The 37,000-square-metre fulfilment centre will employ 300 people.

Amazon expands in Melbourne at Dexus estate

Nick Lenaghan|Oct 30, 2020

Amazon Australia is stepping up its operations in Victoria, doubling its footprint with a second distribution centre to be built at a Dexus-managed industrial estate in Melbourne’s west.

The expansion in Melbourne comes just four months after the US online sales platform confirmed plans for a $500 million robot-run facility in Sydney’s west.

However, the new Melbourne “fulfilment centre” at Ravenhall, worth $65 million to $70 million, will be run by people with around 300 jobs created when it opens late next year. Covering 37,000 square metres, the facility will have enough capacity to house up to 6 million items from Amazon’s online platform.

Along with a distribution centre in Dandenong South, the first warehouse Amazon opened in Australia, the expansion at Ravenhall will increase the proportion of items the e-commerce giant can ship directly to its Victorian customers from Melbourne and enable quicker delivery.

“We have invested significantly in our Victorian operations this year to ensure we can continue to improve delivery promises to customers in the state,” said Amazon Australia’s director of operations, Craig Fuller.

Along with the Dandenong facility, Amazon Australia has two other manual fulfilment centres: one at Moorebank in Sydney, which is 45,000 square metres, and at Perth’s Airport Precinct. It also plans to open a fourth centre at Lytton in Brisbane, of 25,000 square metres, before Christmas.

While the latest Melbourne facility will not rely on robotics, a series of innovations will be deployed to boost the pickers’ speed of packing and accuracy in delivery.

“This includes box-sizing algorithms, [and] picking optimisation that that determines the shortest, most efficient walking route from one place to another when picking products,” Mr Fuller said.

Amazon is an existing customer of ASX-listed Dexus, recently striking a lease for a 4000-square-metre facility at its Regents Park estate in Sydney’s west.

The new Melbourne facility will be built at the Horizon 3023 estate in Ravenhall which is owned by Dexus along with the wholesale property fund it manages and Dexus’ partner, GIC, in a logistics trust.

The 127-hectare site will ultimately be home to as much as 400,000 sq m of commercial and industrial property, worth around $500 million as it is built out over the next five to seven years.

The Amazon lease takes commitments at Horizon 3023 to around 100,000 square metres. The estate’s first tenant, food manufacturer and distributor Scalzo Foods, was secured last year and its 35,300 square metres purpose-built facility is due for completion in December. Meal-kit company Hello Fresh has also signed up as a tenant.