Trends & Predictions: Victoria’s Industrial Construction Boom


Image: Charter Hall’s Midwest Logistics Hub

Victoria’s construction industry has enjoyed a much-needed boost this year, with industrial, logistics and warehousing leading the way.

The rise of eCommerce and onshore manufacturing are to thank for necessitating more warehouse space and logistics facilities, both long-term effects of the pandemic. 

Many developers are jumping on board the trend, securing land across Melbourne’s outer ring from Dandenong all the way to Geelong to cash in on the lucrative, growing industry.

With increased residential and education builds also happening in these areas, we’re sure to see the formation of micro-hubs in years to come. 

Predictions and Announcements

As we predicted earlier in 2021, key local eCommerce players are already planning expansions to their warehousing and logistics operations, with Catch set to open its first fulfilment centre outside of Victoria in Sydney’s southwest next year.

According to Knight Frank, over 2.2 million square metres of industrial and logistics space is due for completion this year in the east coast capitals – the most industrial construction since the 2007-2008 building boom.

On the whole, the eCommerce industry is expected to create demand for about half a million square metres of industrial real estate in the next few years.

Kogan-owned Temple and Webster fast tracked the construction of a 25,000 square metre fulfilment centre in Derrimut, after experiencing huge growth in 2020. The centre is on track to be complete and operational by September 2022.

Salta has partnered with the state government to jointly fund an intermodal terminal in Dandenong South, to the tune of $50 million. 

The terminal will be connected to Salta’s $200 million, 180ha Nexus Intermodal Estate.

Pelligra has a number of industrial projects in its pipeline, including a $500 million mixed-use manufacturing facility on the former Ford site in Broadmeadows.

Chairman Ross Pelligra said the property and construction industries can benefit from closed borders, which have revitalised the need for local supply and production and, in turn, real estate.

“We are at a pivotal moment in time as fragile international supply chains are being disrupted in favour of domestic manufacturing capability and self-sufficiency,” he said. 

The industrial construction boom isn’t reserved solely for eCommerce storage.

CSL’s Seqirus has partnered with the Victorian government to build a $1.8 billion vaccine production plant at Tullamarine, and it’s likely to influence a takeup in more biotech facilities across the country.

The latest construction jobs

Builders to Watch in Boom

Vaughan Constructions, which owns five industrial estates across Melbourne, is also capitalising on the burgeoning sector, currently in phase two of construction of its Biodiversity Business Park estate in Epping.

Pelligra has also set its sights on a number of bio projects, having purchased the Moolap salt works in Geelong, as well as 96ha of land in Avalon which has been earmarked for an inland fish farm.

Private developers are dipping their toe in the booming industrial sector – Texco is currently constructing a 48,674 square metre distribution centre for Charter Hall in Truganina. 

The developer has also recently partnered with Vaughan to construct a 35,000 square metre warehouse in its Biodiversity Business Park.

Hansen Yuncken’s industrial portfolio has catered largely to retail, having constructed distribution centres for Coles, Woolworths and Bunnings – each of whom have shifted in the last year to have a greater focus on eCommerce. 

Hacer is the latest builder to shift into the logistics space, announcing this week it has been appointed preferred builder for Mainfreight’s 120,000 square metre warehousing and freight facility in Dandenong South. 

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