Melbourne’s industrial property market is entering a critical phase, with land supply tightening across key precincts and demand showing no signs of slowing. The city’s western and northern corridors continue to lead the charge, driven by population growth, e-commerce logistics, infrastructure expansion and rising investor appetite.
Land availability tightening fast
While developable land may appear abundant on paper, the reality is different. Much of the remaining zoned land is either un serviced, fragmented, or tied up in long lead-time planning processes. According to recent industry research, Melbourne has just over 1,000 hectares of active industrial land supply available — and the majority of it is concentrated in the North and West.
Melbourne’s western precincts are particularly under pressure. Past reporting in The Australian Financial Review indicated that industrial land in the west could be fully absorbed by 2026, highlighting the urgency for new releases and strategic planning responses.
Demand continues to surge
Tenant demand, especially from logistics and e-commerce operators, continues to outpace supply. This has driven strong rental growth, with The Age reporting year-on-year rent increases exceeding 20% in several Melbourne industrial precincts. Occupiers are competing for scarce, well-located sites that offer scale, efficiency, and proximity to end-users.
Melbourne’s west and north remain prime destinations due to their transport connectivity, access to labour, and alignment with major infrastructure projects such as the West Gate Tunnel and Outer Metropolitan Ring Road.
Global competition for space
It’s not just a local story — Melbourne’s industrial land constraints are being recognised on a global stage. As noted in the Sydney Morning Herald, Melbourne’s western corridor now ranks among the tightest industrial markets in the world, reflecting both land scarcity and strong occupier fundamentals.
This global interest is fuelling competition from institutional buyers, super funds, and logistics operators seeking long-term positioning in growth markets. Many developers are now targeting outer areas like Tarneit, Melton, and Ravenhall, while infill sites closer to the urban core are being closely held or repositioned for higher-value uses, including potential multi-storey industrial formats.
Looking to secure your position in one of Australia’s most competitive industrial markets?
Contact CPN Commercial Group for access to opportunities across Melbourne’s key growth corridors.
