Multi-storey warehouses coming to Melbourne within five years: CBRE
Multi-storey warehouses are set to become a reality in Melbourne within five years as a result of a shortage of industrial land within a five-kilometre radius of the CBD.
According to CBRE, inquiries for vertical warehouses have been popular among national and international occupiers, and the agency predicts multi-storey warehouses could be in use within Melbourne during the next five years as scarcity becomes more paramount.
CBRE advisory and transaction services associate director Guy Naselli said a shortage of industrial land was due to the recent rezoning to mixed use, commercial or residential of city fringe suburbs, including Port Melbourne (under the Fishermans Bend renewal) and North Melbourne (under the Arden-Macaulay Precinct) from previous industrial uses.
“It is within this highly constrained industrial land and proximity to the CBD where occupiers will be looking to create multi-storey warehousing to cater for the growth of Melbourne and our thirst for speed of delivery from ‘point to point’. Highlighting this, we have received a number of inquiries from e-commerce-type businesses,” he said.
“Among the largest asset managers that would be a likely suitor within the city fringe includes Goodman Group, which owns much of the remaining industrial land in the Port Melbourne area.
“These could be target locations for multi-level developments.”
Ben Hackworthy, Lemon Baxter commercial/industrial sales and leasing director, said while multi-storey warehouses were not yet a reality, many developers were considering them as an option due to increasing rents and high land prices.
“Most of the sites that are being considered are in or around the city fringe,” he said.
“This market will be driven by rezoning of existing industrial and commercial land and an increase in demand of occupiers who need to have access the CBD and immediate surrounds.”
Alysia Reilly, Colliers International industrial director, said she believed warehouse footprints would expand horizontally before they expanded vertically, as this was already happening in core logistics markets with 100,000-square-metre-plus requirements.
She said the multi-storey trend in Melbourne was more than five years away.
“Although the supply of industrial land in the outer suburban markets is constrained by the urban growth boundary and the green wedge, there is still quite a significant supply pipeline in Melbourne – particularly the west – and so long as the infrastructure keeps up with demand and development, industrial markets will keep expanding out into the growth corridors,” she said.
“Multi-storey is only just taking off in US cities, where industrial vacancy is as low as 1 per cent, and we’re not quite there yet in any of our inner-city industrial markets.”
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