Melbourne Industrial and Logistics Land Supply 2025

Building on the foundations set in CBRE’s 2022 Melbourne Industrial & Logistics Land Supply Report, this year’s analysis provides a refreshed view of Melbourne’s undeveloped industrial land availability and development pipeline. It highlights land constraints, diverging precinct dynamics, and an emerging imbalance between demand and developable land that is expected to tighten market conditions and support sustained rental growth over the long-term.
 
Melbourne retains one of Australia’s largest industrial land reserves, yet project delivery is increasingly uneven. Our comprehensive parcel-by-parcel assessment identifies how much land can accommodate future development and when it will become available. The findings reveal Melbourne’s five-year average land absorption rate is almost double what we have recorded for the Sydney market, pointing to an emerging shortfall within five years as feasible and serviced land diminishes.
 
Shrinking infill opportunities are reshaping occupier and investor behaviour. Occupiers are increasingly evaluating multi-location strategies, balancing inner-precinct proximity to customers with outer-precinct consolidation centres to manage cost pressures and secure longer-term flexibility. As rental differentials between inner and outer precincts widen, occupiers may also look to forward-lease in Melbourne’s West and North while rental growth remains subdued and incentives are elevated over the next 12 months.
 
Although vacancy in Melbourne has risen to around 4.1%, it is forecast to tighten again post-2026, triggering reduced incentives and a renewed phase of net effective rent growth from 2027.
 
On the investment side, capital is focusing on well-located and serviced sites, while infill areas with redevelopment potential remain under close consideration.
 
Long-term demand will remain underpinned by population growth, e-commerce expansion, and Melbourne’s integrated infrastructure network, linking the Port, intermodals, and arterial routes. Competition from emerging data centre development on industrial-zoned land is further constraining supply. Together, these forces reinforce Melbourne’s position as Australia’s most competitively priced major logistics market, underpinned by strong infrastructure connectivity, and long-term occupier demand. Despite recent rental growth, Melbourne continues to offer a relative cost advantage compared with Sydney and Brisbane, sustaining its appeal for both occupiers’ seeking scalability and investors targeting resilient, long-term performance.