Victoria has been the stand out performer nationally during 2015 leading the charge in population growth benefitting the economic position of the state. Strong economic growth has also been aided by low interest rates and exchange rates which has encouraged investment both domestically and offshore into the state. Similarly employment prospects for the state have outperformed with low unemployment and growth in total employment expected to be robust over the next two years.
As the largest industrial market in Australia, Melbourne has had to weather the storm of high $AUD and is well placed to benefit from the current change in the dollar. The manufacturing sector has had some rebound and demand for industrial stock has increased resulting in the construction pipeline at a long term high while speculative development has once again entered the landscape. While the bulk of new stock is located in the land rich North in the precincts nearby to the Airport, demand however continues to be well distributed across the broader infrastructure network.
There are 25,729 hectares of industrially zoned land across metropolitan Melbourne with 7,246 hectares of that being vacant. Two thirds of the vacant industrial land (4,900 hectares) is located within the State Significant Industrial Precincts (to the West and North). The remainder of the vacant land is located in a number of smaller industrial precincts across metropolitan Melbourne, particularly Maribyrnong in the west and the municipalities of Kingston, Knox, Frankston, Maroondah and Mornington Peninsula in the east and south east. In addition to zoned industrial land, there are some 6,520 hectares of unzoned land that has been identified through the growth corridor plans and previous strategic plans.
The outlook for this market is one of stability; particularly given the encouraging forecasts for Victoria in regard to international imports and exports. These are expected to grow at 1.6% and 2.8% per annum respectively over the next five years which will aid in the continued requirement for well location distribution stock.