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The Sun Rises Over The South East

11 Aug 2018

Bunnings Distribution Centre, Ego Pharmaceutical, and Amazon along with Kaufland, another German grocery chain, have all made major swaps and chess moves, to set up into Melbourne’s South East, riding on the new wave of demand for bigger warehousing and distribution.

Melbourne’s Industrial industry is on the up with a number of new purpose built facilities being constructed. Local and global businesses are becoming smarter and more sophisticated in where to set up, as logistics is ever been solved through online tech. Next day delivery is now the standard, and big sales means a need for bigger shelf and storage space. What were once considered rough areas on the skirts of Melbourne are now thriving hubs with great linkage onto major arterials including Eastlink.

This thriving manufacturing, storage and retail trend will no doubt create more competition as the South East boasts great land holdings with a variety of different sizes. Clients are able to take on longer leases with adequate security, which allows these businesses concentrate on their core industry and in turn to become not only profitable but provide interesting and highly skilled jobs whilst leading innovation in Melbourne. Mid year sales and leasing data from Colliers International shows a rise of 39% in the last year; the highest figure in Melbourne.

One of the suburbs leading the way is Dandenong South, a current hot suburb, due to the ease of logistics both towards the CBD and into regional Victoria. With Dandenong South being so popular, neighbouring suburbs including Keysborough, Hallam and Carrum Downs have also increased with stock levels being at an all time low for both purchase and leasing enquiries. One of the biggest differences is the speed of change; where customers are now flocking to secure premises in the outer east, against 5 to 10 years ago where these suburbs were not even on the radar and left to the heavy mechanical industry.

And for investors? no doubt look to these suburbs if you are chasing long term capital growth and strong retail opportunities. You never know who your next door neighbour may be!