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12 lots sold in 12 weeks as shortage looms

Property Markets / Transactions

Australia

Feb 19 2017

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February 20, Melbourne -

Stage 1 of a new Keysborough industrial estate – Interlink Business Park – has sold out within 12 weeks of release with 12 allotments selling for prices up to $375 a square metre setting a new benchmark for industrial land in Melbourne’s south-east.

According to Savills Notting Hill Office Director, Kosta Filinis, who brokered the sales with Gordon Code of Colliers International, the sales reflect a growing shortage of ready to build land around key transport nodes in the south-east.

"We have sold 12 lots in just under three months at prices not seen before in the south-east market. The previous high was circa $325 whereas every one of these lots has sold for more than $340 with one selling at $375.

"That’s an extraordinary result which reflects the severe shortage of sites especially those offering flat land and the best access to freeways.

"There is now an increasing urgency for well-placed development sites based on a growing confidence in the market and prices are now very much reflecting that," Mr Filinis said.

The 60,000 square metre InterLink estate, offering 843 to 2998 square metre allotments in Stage 1, is located at 283 Perry Road in a prime industrial precinct between well-established industrial parks - The Key and The Link - which have been hugely popular, attracting numerous high profile tenants including Sealy, Miele, BIC and Rinnai.

Mr Code said the majority of the allotments were purchased by developers and owner-occupiers with the close proximity to Eastlink being the key element of most purchases.

"Freeway access remains the key determinant as it can prove a valuable contributor to the bottom line in the very competitive industrial markets," he said. 

Mr Filinis said with less than 10 hectares of serviced industrial land now available within the Keysborough/Dandenong South region the market would now tighten further as new industrial land releases were not due until the second half of 2017, putting further upward pressure on land values. 

"Over the last 12 months land sales in Keysborough/Dandenong South, have totalled about 55 hectares while the average annual take-up during the past seven years has been 45 to 50 hectares and that has caught estate developers by surprise and resulted in a shortage of available ready-to-build sites. 

"What has exacerbated the shortage has been an increase in demand generally and in particular a flight to quality with businesses looking for built-to-order premises," Mr Filinis said. 

He said the opening of the Dandenong Bypass had enhanced what was already a strong transport corridor by easing traffic congestion in the area around the industrial estates, driving even greater demand within the region. 

Savills  Associate Director Research in Victoria, Monica Mondkar, identified approximately 497,467 square metres of industrial accommodation leased in the south-east in the 12 months to September, a massive 72 per cent rise on the previous year of 288,967 square metres, and 80 per cent up on the five year average of 276,407 square metres.

The research found industrial land values in the south-east, over the last 12 months, were generally in the $185-$325 a square metre range for lots between 3000 and 5000 square metres.

Caption: Interlink Business Park in Keysborough

 

About Savills

Savills is a global real estate services provider listed on the London Stock Exchange. Savills operates from over 700 corporate and associate offices, employing more than 30,000 people in over 60 countries throughout the Americas, the UK, Europe, Asia Pacific, Africa and the Middle East, offering a broad range of specialist advisory, management and transactional services to clients all over the world. www.savills.com.au or www.savills.com. Follow @SavillsAus for the latest Australian and global real estate news and research.

SOURCE: Press Release

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