The Melbourne industrial market continues to benefit from the encouraging economic performance over the last few years for the state of Victoria. A range of positive indicators including high employment growth rates, strong housing investment and elevated retail trade has been underpinned by continued robust population growth. This overall positive position of the State has improved sentiment and confidence around property investors which has also been aided by the continued low interest rates. The last few years however has witnessed offshore investment levels dampen, due to increased FIRB fees and stricter regulations around domestic funding for overseas buyers.
There continues to be high local competition amongst both investors and tenants which has translated into improvements in capital and land values; the rental market has also been stable with occupancy levels sound, together resulting in a continued competitive yield environment. Within the Greater Dandenong LGA, demand levels were heightened in 2016, this was however due to the volume of over $10million assets which were brought to market, whereas 2015 results saw high activity within the sub $3million price range. This broad range in price points highlights the attractiveness of this market for a range of investors from large institutional buyers, off shore investors, owner occupiers as well as smaller local private investors looking to enter the industrial market.