Market drawing new users to the north
By Nicole Lindsay
Published in The Age and The Sydney Morning Herald, 29 July 2015
Owner occupiers are driving land sales in Melbourne’s north, close to road infrastructure, the airport and the new $600 million Epping Market, which is set to open next month.
The 70 hectare market, 22 kilometres north of the city, will be the new home for nearly 3000 traders selling fruit, vegetables and flowers into the retail market.
The Epping Market has more than 100,000 hectares of warehousing space for the operators but business estates around the market, Northpoint and Alliance, are also reporting strong sales as market operators and suppliers jockey for positions.
New developers are also entering the area. Last month, developer Clement Lee paid $14 million for the 46 hectare former Epping quarry at 215 Cooper Street – just a year after it changed hands for $7 million.
CBRE agent Dean Hunt, who handles leasing inquiries for several business estates in the north, said enquiry from owner occupiers is strengthening.
“In the last six-12 months there hasn’t been a property which hasn’t sold. If we list it, it sells,” Mr Hunt said.
The wholesale market will have a big impact, because it takes up a huge area of land and is drawing new operators into the whole of the northern sector, he said.
McMullin Group director John Purdey said the group’s $1 billion 120 hectare Northpoint Enterprise Park is now 85 per cent sold.
“Things are going gangbusters. We’ve sold 35 blocks since last November,” Mr Purdey said.
The most recent deals, at around $250 a square metre, have been to a range of owner occupiers and some builder-developers who are planning to spec-build properties.
Northpoint is now preparing for buildings that cater to users of the business parks, with a medical centre, an aged care facility and a hotel.
Colliers agent Ashley McIntyre said the owner occupier market in the north is so strong that she is fielding calls from people trying to buy properties advertised for lease.
“A combination of low interest rates and the self-managed super funds are driving the owner occupiers,” she said.
According to research by Knight Frank, the north now has the largest amount of vacant space in Melbourne, reflecting the precinct’s increase in new construction in the past 12-18 months.
The city’s overall industrial vacancy rate increased by 47,500 to a historic high of 950,000 hectares in the second quarter of 2015, despite an increase in take-up levels.
CBRE research indicates 180,000 square metres of leasing deals have been executed so far in 2015 in Melbourne, with investment sales reaching $346.9 million.
CBRE director of industrial and logistical services Matt Haddon said $878 million worth of deals had changed hands nationally, the slowest start to the year since 2010.
“But a number of major deals are either being marketed or in due diligence, so sales volumes are on track to top the $5.4 billion achieved last year,” Mr Haddon said.