Investor Presentaiton
Australian Industrial Market
Melbourne
FRASERS
LOGISTICS & COMMERCIAL
TRUST
ā Supply: A total of four projects with a total GLA of 125,660 sqm reached practical completion in Melbourne over 1Q21. Over the last 12 months, 767,325 sqm of new stock was completed in
Melbourne which is significantly above the historic ten-year average. In 1Q21, the bulk of new industrial supply were concentrated in the Northern (53%) and Western Precincts (47%), reflective of
their less restrictive land supply environments.
Demand: With lockdown restrictions easing in Victoria, leasing activity has significantly increased over the previous two quarters. Gross take-up for 1Q21 totalled 546,939 sqm which is the
highest recorded gross-take up for the Melbourne market on record. The West industrial precincts recorded over 307,000 sqm of gross take representing 56% of all take up during the quarter.
Rents: Due to high levels of new supply in Melbourne, industrial face rents have generally remained flat, however there has been a slight face rental growth in the South East and North
industrial precincts. The South East continues to be one of the strongest performing precinct with face rents increasing slightly to A$95/sqm net. Incentives in South East have also remained stable
at around 23%.
ā Vacancy: During the March quarter, vacancies in Melbourne declined 20% as a result of strong tenant demand. As at March 2021, there was approximately 886,314 sqm of available industrial
space in the Melbourne market. However, vacancy rates in Melbourne are expected to increase over the next 12 months as new speculative stock is completed.
('000 sqm)
900
800
700
600
500
400
300
200
Melbourne Industrial Total Supply
100
0
1Q12 1Q13 1Q14 1Q15 1Q16 1Q17 1Q18 1Q19 1Q20 1Q21
Completed
Annualised as at 1Q21
10-year annual average
Melbourne Industrial Prime Grade Net Face Rents
100
95
$93
$94
$94
(A$/sqm/yr)
89
$92
$90
00
90
$88
$89 $89
$87
$84
85
80
60
1Q12 1Q13 1Q14 1Q15 1Q16 1Q17 1Q18 1Q19 1Q20 1Q21
Sources: Jones Lang LaSalle Real Estate Intelligence Service - Melbourne Industrial Final Data 1Q21; Jones Lang LaSalle Real Estate Intelligence Service - Melbourne Industrial Snapshot 1Q21; Jones Lang LaSalle Real
Estate Data Solution - Melbourne Construction Projects from Q2 2011 to 1Q 2021; ; Knight Frank Research - National Industrial March 2021.
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