Melbourne industrial transaction volumes breach 10-year quarterly average

Investment volumes reached AUD 717 million in Q2 2025.

According to a JLL report, industrial rents remained stable in Melbourne’s North precinct while a small uptick was seen in West prime pre-lease and across all grades in the South East besides high-tech. Incentives remained stable across the North and West precincts but increased slightly in the South East.

“Investment volumes totalled AUD 717 million across 32 transactions, 33% above the ten-year quarterly average. Buyer profiles were dominated by Australian based companies and investors,” the report added.

Here’s more from JLL:

Gross take-up decreased for the second quarter to 21,800 sqm, 15% below Q1 2025 and 25% below the 10-year quarterly average. The majority of this take up was concentrated in the West precinct accounting for 74%, followed by 17% in the South-East and 9% in the North.

Demand was led by the transport, postal and warehouse sector accounting for 57% of gross take up space followed by retail trade at 17%, led by two major e-commerce distribution centres for fashion retail in the west.

Only 18% of completions were pre-committed in Q2 2025

New supply in Q2 2025 totalled 227,000 sqm, 36% below Q1 2025 completions but 24% above the 10-year quarterly average. Of the supply, only 18% was pre-committed at practical completion.
An increase in vacancy was recorded across all precincts in Q2 2025. Despite the rise, South-east vacancy remains the lowest of any east coast market. Un-committed completions and the continued rise in supply attributed to escalated vacancy levels recorded in Q2.

Outlook: Limited rental growth is forecast to continue in the near term

High levels of owner-occupier purchasing is expected to ease while elevated incentive rates make renting prime facilities more attractive.

Speculative developments continue to be placed on hold, awaiting pre-commitment prior to commencing construction due to oversaturation of supply within the market. Limited rental growth is forecast to continue in the near term until supply-demand dynamics rebalance.