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If you look at the GM plant in Port Melbourne that the government has just bought. It's about 200,000 square metres which they will slowly exit over six months to 2.5 years and I'm sure the government will have a higher and better use for the property.
The three automotive manufacturers and their suppliers occupy just under one million square metres or just under 7 per cent of the total stock in the market.
While the recent closure of Ford’s Broadmeadows plant and the imminent shuttering of the Holden and Toyota facilities in Port Melbourne and Altona will add pressure to the vacancy level, they are unlikely to hit the market at the same time and may never get counted as industrial vacancies, he said.
“A number of these facilities are quite bespoke and therefore more likely to be redeveloped rather than simply added to the market as vacant stock,” he said.
“If you look at the GM plant in Port Melbourne that the government has just bought. It’s about 200,000 square metres which they will slowly exit over six months to 2.5 years and I’m sure the government will have a higher and better use for the property.”
He pointed to Goodman’s redevelopment of the Nissan site in Clayton which has been redeveloped into logistics and office space. Cbus Property has also redeveloped the General Motors Holden site in Dandenong South into the Estate One mixed-use project.
“Sometimes buildings stay in the pool as secondary or tertiary stock but others are redeveloped,” he said.
Whereas the Urbis report is focused on the market above 10,000 square metres, Knight Frank’s industrial vacancy report covers properties measuring 5000 square metres.
Knight Frank researcher Kimberley Paterson found a 3 per cent increase in stock levels over the past quarter to reach a new high of 1.09 million square metres across 95 buildings, up 61 per cent on the long term average. However, gross take-up during the quarter measured 159,139 square metres which indicates 15.7 per cent more leasing than the long term average.
Existing stock accounted for 93 per cent of total vacancy, with speculatively built space only 2.7 per cent or 29,551 square metres of total vacant stock.
Knight Frank head of industrial Gab Pascuzzi said vacancy levels vary considerably by precinct, with solid leasing activity in the north and city fringe resulting in decreases.
“Several new speculative developments under construction saw vacant stock levels in the southeast and east. The addition of several backfill options saw vacant stock in the west increase by 12.8 per cent,” Mr Pascuzzi said.
Two empty spaces returned to the vacancy pool include the 52,364 square metres former Masters space at 364-426 Old Geelong Road in Hoppers Crossing and 24,699 square metres of space created by Murray Goulburn at 50 William Anglis Drive in Laverton North.
Mr Robb said there had been a lull in speculative building which had kept a dampener on the vacancy rate but “landbanking” was starting again.
“Whether it’s co-incidence or planning, there’s less spec-building than two or three years ago and land supply has gone down and groups are starting to restock,” he said.
But Frasers Property has purchased two major parcels of land during the year – 20 hectares in Truganina next to the West Park Industrial estate and a 15-hectare site in Keysborough adjacent to the Key Industrial Park in the south east.
Ms Paterson said speculative construction levels are expected to remain relatively low in the medium term.
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