Melbourne’s industrial market offers affordable options to new investors: HTW
The Melbourne industrial market has opportunities for first time industrial investors with affordable price points throughout the outer suburbs, according to valuation firm Herron Todd White’s May review.
Investor opportunities are most notably outside the Metropolitan Ring Road to the west and north, east of the East Link Tollway and south-east of South Gippsland Highway. These include suburbs such as Cranbourne West, Kilsyth, Epping and Ravenhall.
“Such locations are favoured due to their price affordability, proximity to amenities and access to main road linkages as well as nearby developing residential areas,” say HTW in their report.
So far in 2017, the industrial market in Melbourne has been tracking well, with a noticeable increase in values over the previous 12 months, it adds.
The market has been assisted by continually low interest rates, low rental levels which continue to be stable and an increasing demand for smaller warehouse units.
This increasing demand for small strata title warehouse units often appears to be for purchasers looking to create their own man cave without losing any space at their primary business location or at their family home.
Increased infrastructure spending has also impacted on property values in a positive direction, with the widening of the Tullamarine Freeway, Monash Freeway and the beginning of the Western Distributor project, among others, assisting transportation and logistics businesses throughout metropolitan Melbourne.
“In light of the above, we consider a good industrial investment property to be identifiable through these basic property fundamentals:
- Good access
- No oversupply
- Small to medium sized property
- Good traffic management
- Good ingress and egress
- Access to sufficient parking
A property lacking in a number of the above areas would be considered unfavourable and less sought after in the market place. The industrial property market is expected to be fairly positive throughout 2017.
Provided there is no oversupply or external shocks to the market, with population growth and increases to lower levels of the economy, property values are likely to continue growing in the short to medium term, the report concludes.