The industrial and logistics market in Victoria has seen a surge in demand for low site coverage and hardstand sites, driven by several key factors. Firstly, there has been a high volume of tenant requirements for these types of properties, as businesses seek efficient and flexible spaces to accommodate their operations. The trend is particularly evident in the west and south-east industrial precincts of Melbourne, where many major occupiers are based.
Secondly, the market has witnessed a significant increase in low site coverage sales and leasing deals, indicating the strong appetite from both investors and occupiers for these assets. Properties with low site coverage offer unique advantages, such as the ability to accommodate a larger proportion of hardstand area, which is crucial for activities like container storage and logistics operations.
Lastly, the lack of existing intermodal transport sites throughout Victoria has created a greater need for container lay down sites near to existing infrastructure. As the demand for efficient supply chain solutions continues to grow, the importance of strategically located properties with ample hardstand space has become increasingly apparent.
Advantages of Hardstand
Capital Value
Hardstands, appreciate as land values rise, whereas warehouses can depreciate over time due to structural aging. This makes hardstands more likely to increase in capital value.
Low Upkeep Costs
Hardstands have simpler structures, requiring minimal maintenance. This contrasts with warehouses, which need regular upkeep for mechanical systems, lighting, and roofing.
Strong Returns
Property owners can achieve higher net returns with lower ongoing expenses. Hardstands offer strong rental rates due to their versatility, making them an attractive investment for generating steady income with minimal overhead costs
Irregular Shaped Sites
Hardstands can be constructed on irregular shaped blocks and still be utilised by logistics or outdoor storage operators.
In the rapidly expanding Melbourne Industrial market, hardstand spaces have emerged as a crucial asset for businesses that require operational flexibility, durability, and strategic location. As transport and logistics networks become more integrated and reliant on efficient infrastructure, the demand for well-positioned hardstand areas will only continue to rise. With their ability to support heavy vehicles, machinery, and outdoor storage, hardstands offer invaluable benefits for industries ranging from logistics and manufacturing to construction and freight.
“Hardstand areas, far from being secondary assets, form the backbone of many industrial operations, supporting the city’s critical supply chains. Those who recognise and capitalise on these strategic opportunities will be well-positioned for sustainable growth in Melbourne’s dynamic industrial landscape”, Mr Barr-Waanders said.
Quick Hardstand Stats
- Of the approximate 2,000 hectares of industrial zoned development stock in Melbourne, only roughly 16.6% of that land supply can be genuinely viewed as potential hardstand stock.
- The highest concentration of hardstand sties in Melbourne are found in the following suburbs, Port Melbourne, Yarraville, West Footscray, Spotswood, Altona, Altona North, Tottenham, Brooklyn, Sunshine, Laverton North, Somerton, Campbellfield & Thomastown.
Please reach out to the AND Property team for a full comprehensive overview of the recent sales, leasing, and investment sale evidence across Melbourne’s major industrial precincts, focusing on hardstand and low site coverage sites. Construction costs of varying qualities of hardstand Q3 2023 V Q3 2024, relative returns, advantages of hardstand over sheds and Melbourne’s hardstand precinct hotspots. By analysing the data and trends, we can gain valuable insights into the current state of the market and identify potential opportunities for investors and occupiers alike.
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