Melbourne Industrial property yields sit at 30 year lows: HTW Industrial

The industrial market continues to be driven by a supply shortage and growth in e-commerce creating a greater need for warehouse and logistics space, according to the latest report from Herron Todd White

The report found, Melbourne’s industrial market on the back of this demand has continued to perform strongly over the past 12 months.

This has seen yields sitting at 30-year record lows.

Land values have also increased significantly throughout 2019, especially industrial areas within proximity of major road linkages.

The valuers said, "as at June 2019, industrial rents in the west were ranging from $75 to $80 per square metre, with rents being slightly higher in the southeast at $85 to $95 per square metre."

"Ongoing industrial development should ease supply issues in the near future, however, demand is set to remain strong in the west with continuing demand from e-commerce and logistics companies that require a location within proximity of the CBD and major transport linkages."

There is still some downward pressure on yields due to the low interest rate environment in which investors are seeking opportunities to acquire industrial assets to enhance their portfolios," they concluded.