, Australia

Melbourne industrial sale transactions down 23% to AUD481.9m in Q1

But this is still 43% above the 10-year quarterly average.

Activity in Melbourne’s occupier markets has continued to accelerate in 1Q21, reaching a new historic benchmark for a second consecutive quarter, according to JLL. Gross take-up totalled 546,940 sqm this quarter, outperforming the previous record (470,230 sqm) from 4Q20. As such, Melbourne has accounted for 44% of national takeup over the last 12 months. 

Here’s more from JLL:

Supply delivery slowed this quarter, however remained slightly above the long term average and was the highest of any market. The impacts of the pandemic and the associated restrictions have slowed or delayed some developments, and as such all four projects which completed this quarter (125,660 sqm) were fully pre-committed. 

Continued investor demand for income producing assets in the industrial sector continues to place pressure on pricing for prime assets. Melbourne’s average prime yield midpoint sharpened by 25 basis points, to a new record low of 4.31%. 

AUD 481.9 million of industrial sale transactions (≥ AUD 5.0 million) occurred in 1Q21. This was a decline of 23% on totals in 4Q20, but remained 43% above the 10-year quarterly average.

Other key figures:

2.7% Melbourne South East prime annual rental growth: Consistently elevated industrial occupier activity has started to place pressure on rental values across a number of precincts in Melbourne. This has pushed the whole-market average prime rental rate by 1.0% in the last 12 months.

1,555,580 sqm Gross take-up: Gross take-up in the Melbourne industrial market continues to outperform the 10-year average, with over 1.5 million sqm recorded since 2Q20. Demand has been led by the Transport, Postal and Warehousing sector, which accounted for 36% of overall gross take-up over the last 12 months.

4.00%– 4.50% Melbourne West prime yield range: Prime yields have compressed over the last 12 months across all precincts, with midpoints coming in by 75bps across the three major precincts. Secondary yields have followed suit, compressing by up to 125bps in the North.

642,040 sqm Under construction: As at 1Q21,we are tracking over 640,000 sqn of stock which is under construction. Most of that stock (97%) is due for completion in 2021, with the balance to be delivered in 2022.Based on the current forecast, 2021 will be the highest year for asset completions that JLL Research has recorded.


Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Get Realestate Asia in your inbox
Analysts revised up pricing outlook as the probability of cooling measures wanes.
JLL believes the market’[s rebound is gaining momentum after several false alarms.
These two projects will bring a total of 542 new rooms to the market.
The average market capital values are now below THB 127,000 per sqm.
Industrial stock is expected to reach a total of 571,100 sqm this year.
New launches increased 18.1% to 3,716 units, driving healthy sales figures.
Blame it on burgeoning vacancy rates and a heavy supply schedule.
Secondary vacancy from last year’s supply is likely to materialise later this year as office demand weakens.
The midscale segment will account for 42% of the new supply.
Blame it on weak expat demand and their shrinking housing budgets.
Vacancy rate reached 9.8% in Q1, the highest since 2009.
Rents and capital values are still under pressure as landlords drop asking rents.
New private home launches fell from 1,038 units in April to just 514 units in May. 
There were no new projects launched in Q1 as developers focus more on selling existing ones.