Rising numbers of imported cars have created a new “pop-up” market for short-term vehicle storage in Melbourne’s Northwest warehouse sector.

JLL Associate Director, Logistics & Industrial – VIC, Sandy Ng has secured more than 173,000 sqm of vehicle storage leases over the last 12 months for BTi Logistics and estimates the trend will continue until at least the end of 2025.

“Third-party Logistics (3PL) suppliers are seeking accommodation in Melbourne’s Northwest where they can store cars to protect them from the weather, as all the usual hail-proof covered storage sites are full.

She said, “They are looking to warehouse cars on short-term leases of three months to two years on behalf of manufacturers as they are offloaded from the ships and prepared for delivery to dealers.”

BTi Logistics Managing Director Mr Michael Parakh said the demand for storage had been driven by a drop in the post-COVID demand for new cars, creating congestion at the docks.

“I think the demand is due to a combination of factors. Covid-related pressures and unprecedented demand certainly kicked things off. Still, a changing economic landscape resulting in reduced demand and an influx of new vehicles into the market has further added to the issues. Now, throw in supply and shipping challenges coming from multiple angles over the past few years and you have a very challenging landscape for OEMs. 

“To have the cars sitting at the ports costs an immense amount to the manufacturers involved and further exacerbates congestion issues. Over just the past three months, we've doubled our automotive logistics footprint with an additional 85,000 sqm across multiple sites in Melbourne to support vehicle storage and processing,” Mr Parakh said.

He said BTi was storing 6000 cars and that car storage was a national issue affecting other ports and expected demand to remain strong for the remainder of 2024 and into 2025, “with no real end in sight.”

“BTi is looking at space in Brisbane and Sydney and is negotiating on several new sites in Melbourne but space is tight, and it is difficult to find and negotiate short-term deals,” Mr Parakh said.

He estimates the take-up of short-term car storage leases could total more than 1 million sqm over the next 12 months.

Ms Ng said other logistics companies have recently secured more than 133,000 sqm of warehouse space and a further 80,000 sqm of hardstand space in Melbourne over the same period.

She said the cars are being stored on behalf of manufacturers across all brands.

“3PL businesses are looking for new, clear-span warehouses for the storage and, where this isn’t available, outdoor yard areas.

“This is a sector that didn’t exist 12-18 months ago, and it’s having the effect of taking up the short-term vacancies and providing landlords with medium term value while they seek new tenants or to fill the income gap between tenants relocating,” Ms Ng said.

She said that although Melbourne is the focus of the activity, “We have seen similar requirements in Adelaide, Brisbane, and Sydney where we have also been assisting BTi with their requirements.”