Research released today by the Property Council of Australia sounds a stark warning for all levels of government on the woefully inadequate supply of zoned industrial land across Greater Melbourne, with serious economic consequences for job creation and the strength of our local supply chain if left unaddressed.
The Urbis-led research shows that there is currently only four years' worth of zoned industrial land across Greater Melbourne for the development of future warehouses, distribution centres, data centres and manufacturing facilities.
The city's south-eastern region has as little as one year's worth of land available for industrial developments, and the research concludes that, in some areas of the city, industrial developments have already reached the limits of the Urban Growth Boundary.
These industry forecasts are based on land consumption patterns and future development needs, and are in contrast to official projections of more than 20 years of available supply.
Demand for future industrial property assets has accelerated in large part due to the significant increase in e-commerce activity in Victoria in recent years, which has now been firmly embedded in people's shopping patterns.
With Melbourne needing to cater for an additional 3.4 million people over the next 30 years, Property Council of Australia Victorian Executive Director Cath Evans said that a lack of future industrial land will make it difficult to provide enough jobs to meet the demands of a rapidly growing population.
"Not only will we have to house and employ the millions of new residents expected to make Melbourne their home, but we will have to provide them with adequate transport and logistics services to meet their consumption demands," said Ms Evans.
"Everything Victorians buy - from their online shopping order to the weekly supermarket shop - moves through warehouses and distribution centres, all of which are built on industrial zoned land.
"Without immediate action to release more land for industrial development, the cost of land and occupier rents will continue to grow rapidly, with many costs unavoidably passed on to the end consumer.
"At the same time, our state risks missing out on further job creation in key growth sectors, and relocation risks will increase due to businesses' increasing difficulties in finding suitable sites in Melbourne.
"The Property Council is eager to work with the Victorian Government to unlock suitable land especially in key industrial corridors in the west and south-east of Melbourne. This is more than a property issue - this is an economic issue that requires important government leadership to ensure Victoria's reputation as a great place to do business is maintained," said Ms Evans.
