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Market Update – H1 2025

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The Melbourne Strata Industrial Market remains a high performing sector driven by population growth, increasing demand for cost-effective warehouse solutions, and the expansion of small businesses seeking flexible industrial spaces.

Recent research from Urbis* highlights the sector’s sustained momentum:

Sales activity for strata units priced between $1 million and $2 million has increased by 4.2% p.a. between 2015 and 2024 reflecting the sector’s sustained demand.
Median sales prices for strata-titled industrial units have grown at approximately 5.5% p.a., surpassing $1 million by the end of 2024.
The limited availability of industrial-zoned land continues to intensify competition, driving demand for well-located strata-titled industrial properties, leading to rapid absorption of new supply.

The rapid rise of e-commerce, population growth, and business expansion has fuelled record demand for strata industrial units, particularly in well-connected urban corridors. However, industrial land supply remains constrained despite rezoning efforts by the Victorian Planning Authority. The market is lagging in meeting growing demand prompting developers to respond with high quality, flexible industrial developments that cater to modern business needs.

Despite broader economic pressures such as concerns regarding interest rate fluctuations and inflation, the strata industrial segment has demonstrated resilience. It continues to attract business owners seeking long security alongside institutional investors and private syndicates looking for high growth industrial exposure.

With shifting market dynamics challenging traditional property asset classes such as office and retail, light industrial property remains a standout performer. Given the persistent supply-demand imbalance and strong structural drivers, the Melbourne industrial market is expected to sustain its robust growth trajectory.

^*Urbis: Urban Development Program. https://urbis.com.au/

Image credit: iStock RonFullHD

PUBLISHED 19/03/2025