Industrial Real Estate Demand in Melbourne
Discover what’s driving the Industrial Real Estate Melbourne Market in late 2025 – 2026
Despite some broader economic challenges and cautious investor sentiment, the industrial real estate Melbourne market continues to demonstrate resilient demand, particularly across owner-occupier sectors and key logistics and [industrial areas].
Steady Demand, Shifting Dynamics
The Q3 2025 Melbourne Industrial Market Report shows the vacancy rate edged up slightly to 1.4%, up from 1.2% last quarter. While this reflects a softening from ultra-tight conditions, demand remains underpinned by e-commerce, logistics and manufacturing growth.
One of the stronger indicators of sustained activity is the continued pressure on rental values. Net face rents have increased, albeit at a slower pace, due to high construction costs and limited quality stock across core precincts.
* Net face rent is the base rental rate stated in a lease agreement, excluding any incentives such as rent-free periods or fit-out contributions. It also does not include outgoings, which are typically paid separately by the tenant. If you would like to learn more about other common industrial real estate terminology.
Owner Occupier Activity Remains a Key Driver
Owner occupier demand remains a standout feature of the industrial property market in Melbourne. Logistics and e-commerce operators, as well as food manufacturing businesses, are showing a preference for owning assets, particularly in strategic growth areas such as Melbourne’s West.
With a robust development pipeline in areas like Truganina, Tarneit, and Laverton North, owner-occupiers are stepping in where institutional capital has taken a more cautious stance, locking in purpose-built facilities to secure operational certainty and cost stability.
Other popular areas in Melbourne’s West seeing significant demand at CPN Commercial Group include:
- Derrimut
- Sunshine
- Ravenhall
With the north west also leasing quickly including
- Keilor Park
- Airport West
- Tullamarine
Investment Volumes Remain Subdued
Compared to previous years, industrial investment volumes are significantly down. Elevated interest rates and a cautious lending environment are keeping institutional buyers on the sidelines. Despite this, pricing has held firm and yields have stabilised following some expansion in 2024.
Its expected that active buyers in late 2025 – 2026 are investors seeking secure income streams, or owner-occupiers capitalising on a cooling investment market to acquire properties.
At CPN Commercial Group this is reflect by consistent demand from qualified owner occupiers .
Industrial Real Estate Melbourne: What Owner Occupiers are looking for
At CPN we are finding owner occupier are looking for industrial properties that are well equipped with necessary amenities such higher power capability, larger hard stand storage areas and the ability to maximise storage height.
Submarkets in Focus
While the full-year 2025 data is still emerging, general observations indicate continued demand in the following precincts:
- Western Melbourne: Including Truganina, Derrimut, and Laverton North – strong demand from transport and logistics sectors.
- Northern Melbourne: Epping and Campbellfield – driven by food manufacturing, cold storage, and last-mile distribution.
- South-East: Dandenong South, Hallam and Keysborough continue to perform, though rising land values are pushing some occupiers further out.
These locations are benefitting from proximity to infrastructure, new estates, and larger land parcels suitable for bespoke development.
Looking to take advantage of Melbourne’s industrial areas? Our team can help you uncover opportunities tailored to your business or investment goals.
Get in touch with CPN Commercial Group to start your industrial property search today.
