This article is from the Australian Property Journal archive
REZONED industrial to residential infill sites in Melbourne’s middle suburbs are selling fast, with more than $110 million worth changing hands in recent months.
Knight Frank director Danny Clark said Melbourne’s urban industrial precincts are being transformed by local councils and developers are responding positively, with more than $110 million in transactions in recent months.
According to Knight Frank research, 209ha of land was zoned for industrial use and 259ha of industrial land was rezoned to non-industrial use over the year to June 2015. This resulted in a net decrease of 50ha of industrial land across metropolitan Melbourne.
Clark added that the trend is set to continue as council’s actively rezone industrial precincts to a higher use.
“Rezoning from industrial to other uses tend to be more frequent but also tend to involve smaller parcels of land. Around 80% of rezonings from industrial are between 100m2 and 5ha.
“An exception to this was the zoning of 225ha of industrial land to create the Fishermans Bend urban renewal area which is wholly located within the Port Phillip and the City of Melbourne LGAs.
“Between 1995 and 2005 industrial land consumption across metropolitan Melbourne averaged around 300has a year. Since the GFC consumption rates have declined significantly. In the 12 months to June 2015, 276ha was consumed, the highest level since 2008,” the research found.
The research found that demand for development sites in general continues to grow with more than $2.8 billion in sales (135 deals) over the 2015/16 financial year and $2.59 billion (148 deals) over the previous financial year.
Knight Frank’s Stephen Kelly said most of the demand is coming from offshore buyers with the trend coinciding with concerns of an oversupply of apartments located closer to the CBD.
Major deals have been focused in the western region with an infill site at Maribyrnong selling for about $20 million; a site in South Kingsville fetched $20 million, a Williamstown North site sold for about $25 million while another in Maidstone sold for approximately $42 million.
Clark said a further $65 million worth of infill land is currently under negotiation.
Other deals likely to follow include the 6.3ha site at 278-288 Blackshaws Rd, Altona North which is set to reap more than $50 million when sold while Knight Frank has just listed another 2.171ha site at 41-59 Stephensons St South Kingsville with a price tag of about $20 million.
Australian Property Journal
