200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 -6 -4 -2 0 2 4 6 8 10 12 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 % annaul change Source: ABS State final demand (left axis) Completions (right axis) Forecast '000 sq m An above average 970,000 square metres of new supply was completed across the Melbourne metro area last year, across 48 projects (> 5,000 square metres in size). The largest examples included vidaXL, Mainfreight, Myer, Mitre 10/Nike, and Early Settler. The West accounted for over half the number and volume of completions, followed by the South-East at more than one third. The volume of completions represented a step down from 2021 but is still high in an historical context. A substantial proportion of developments completed last year were underpinned by tenant pre-commitment. However, around 25% (by volume and number) commenced on a speculative basis. Major developers including GPT, Frasers, Charter Hall, Pellicano and Stockland rolled out speculative developments and overall were successful in securing tenants before completion. Supply 12 Based on projects underway, approvals data and a sustained period of low vacancies pushing up rents, completions to remain historically high at around 900,000 square metres per annum until the end of 2024. We already know of 26 projects that are proceeding for a combined 700,000 square metres and are confident more will emerge. Notable examples include: • 46,000 square metres at 11-167 Pam Spring Road in Ravenhall for Nike/Lululemon due for completion in 2023; • 40,000 sq- m at Portlink Logistics Estate in Altona North, also due in 2023; and • 74,200 square metres at the Melbourne Airport Business Park in Tullamarine for Techtronic Industries, due to complete in 2024. The recent mix of pre-lease and spec building to continue as the developers look to capture both longer and shorter turnaround needs. By THE 2025 FINAINCIAL YEAR, we forecast industrial property completions to gradually fall back closer to the long run average of about 700,000 square metres per annum, crimped by moderating demand and moderately higher vacancies. Supply outlook Melbourne demand and new supply Industrial Market Monitor | 1st Half 2023 % annual change
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