An additional 23 hectares of industrial land is being released at Merrifield Business Park by MAB Corporation and Gibson Property Corporation, amid an ongoing shortage of warehouse space and industrial land in Melbourne’s north.
CBRE’s Daniel Eramo and Joe Brzezek have been exclusively appointed to market the next stage of development, which paves the way for approximately 126,500sqm of additional industrial warehousing to be developed in Melbourne’s northern growth corridor.
With an investment of $1.2 billion and sitting across 415 hectares, Merrifield Business Park is set to be Victoria’s largest master-planned business and employment precinct, specifically designed to service local, national and international markets. Some of Australia’s leading brands currently operating at the business park include Dulux, Ford and D’Orsogna.
“Large scale occupiers continue to view Merrifield Business Park as a strategic location for their business given the ability to access 25% of greater Melbourne’s population within a 30-minute drive, and 60% within an hour,” said Michael Martin, MAB General Manager Commercial and Industrial.
“Merrifield provides excellent linehaul transport and interstate distribution through to Australia’s eastern seaboard, allowing business to have more certainty on timing of inbound and outbound freight as transport operators can avoid peak congestion on Melbourne’s major arterial roads.”
The launch of the next stage will provide land purchase, turn-key and pre-lease opportunities at a time when Melbourne’s industrial land supply remains extremely limited.
CBRE’s latest Melbourne Land Supply report highlights that industrial & logistics occupier activity in Melbourne has been the strongest in the country over the past three years.
CBRE’s Australian head of Industrial & Logistics Research Sass J-Baleh said this had been driven by a range of factors, including access to the country’s largest port, strong population growth, the city’s efficient road infrastructure network and the significant rent cost differential between Melbourne and Australia’s other major eastern seaboard markets.
“Our data highlights that Melbourne’s north has recorded the city’s largest vacancy decline over the past 12 months, with limited leasing activity given the lack of stock in the market,” Ms. J-Baleh said.
Limited new land supply Melbourne-wide is expected to place further pressure on the market, with just 13% of the city’s industrial zoned land available for development in the next three years.
This is expected to underpin average annual rental growth of close to 10% in Melbourne over 2023 and 2024 – the highest rate in Australia – with Melbourne’s north having already recorded rental growth of 31.4% in 2022.
Against this backdrop, and with Melbourne’s north having a vacancy rate of just 1.09%, the Merrifield Business Park release is expected to generate significant interest – particularly from owner-occupiers.
CBRE Senior Manager, Industrial & Logistics, Joe Brzezek noted, “We’re seeing a significant increase in the number of industrial occupiers looking to own rather than lease their assets, with rising rents making ownership more affordable in some circumstances. More manufacturing organisations are preferring ownership over leasing given the significant cost of their fit outs and the strong capital returns seen in the industrial market over the past two years.”
This has already been evidenced at Merrifield Business Park, with the existing industrial facilities having an ownership rate of 70% including Dulux (22,600sqm), D’Orsogna (10,852sqm), Aeroklas (12,681sqm) and more.
CBRE Director, Industrial & Logistics, Daniel Eramo said the launch also presented a rare opportunity to purchase serviced and titled industrial land and purpose-built warehousing of scale, with no existing vacant 10,000sqm+ industrial facilities currently available for purchase in Melbourne’s north.
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