Pellicano managing director Renato Pellicano believes the current demand for storage, distribution, logistics and freight will see industrial vacancy rates remain tight in coming years.

Diversified property developer Pellicano has announced six new deals across its industrial portfolio, taking its vacancy rate to a record-low 0.07 percent – its lowest since 2006, while at the same time taking its total industrial holdings to over 600,000sqm.

The deals, which encompass close to 60,000sqm of leased space, include a speculative facility at the developer’s Innovation Park in Dandenong South, a relocation at Parkview Estate in Moorabbin, the completion of Baby Bunting’s facility in Dandenong South, and three other leases across Moorabbin and Dandenong South.

The pre-completion leasing of the speculative facility gave Pellicano the confidence to commence construction on two more in Dandenong South; an 8,624sqm facility at Innovation Park, and a 12,190sqm facility at M2 Industry Park.

The surge in activity across Pellicano’s portfolio is reflective of the current pent-up demand for high- quality industrial land, driven in part by the current e-commerce boom, which experienced five years of growth over the last twelve months – according to CBRE’s Australia Industrial & Logistics Vacancy Report H1 20211, which also revealed that the industrial and logistics vacancy rate in Melbourne’s south-east is sitting at just one percent.

The low vacancy rate in the south-east has been a further driver of Pellicano’s activity, as tenants race to secure the last remaining industrial lots throughout the corridor.

The full deals schedule is:

• State Management Solutions (State Transport) occupying an 8,418sqm speculative facility at 30 Vision Street (Innovation Park) in Dandenong South, for a rent of $820,755pa, negotiated by CBRE
• Step Global expanding from its Moorabbin Super Centre facility to a 1,090sqm facility at 1 Arco Lane (Parkview Estate) in Moorabbin, for a rent of $212,550pa, negotiated directly through Pellicano
• Neverfail Springwater signing for a 4,374sqm facility at 39 – 47 Sunmore Close (Parkview Estate) Moorabbin at $503,000pa, negotiated by Colliers
• UGT International signing for a 15,195sqm facility at 57 – 63 Fairchild Street (Parkview Estate) Moorabbin at $1,555,475pa, negotiated jointly by Colliers and CBRE
• Advwin Trading signing for a 6,063sqm facility at 2/196 Abbotts Road (M2 Industry Park) Dandenong South at $575,985pa, negotiated by Lachlan Ferguson of CBRE
• The completion of Baby Bunting’s 24,307sqm purpose-built facility at 153 National Drive (M2 Industry Park) Dandenong South, negotiated by CBRE

Pellicano managing director Renato Pellicano believes the current demand for storage, distribution, logistics and freight will see industrial vacancy rates remain tight in coming years, while cementing the importance of well-located and high-quality assets.

“ The diversity of clientele that have recently signed on across our industrial portfolio shows the current strength of the market; Victorians continue to spend big online, demand for freight and logistics is growing, and companies that were able to navigate COVID’s economic headwinds successfully are now looking for upgrades to their facilities.

“ Further testament to these market conditions is our current vacancy rate, which is sitting at its lowest level in 15 years.

“ Construction of further speculative facilities and continued investment in our industrial projects reflects the confidence we continue to have in this sector, which has always been an integral part of our business.

“ Victoria’s recovery from the economic impact of COVID-19 has given companies the confidence to move on their growth strategies, and as we continue to progress on the vaccine rollout we are expecting to see more of this – so demand for land will remain high, if not grow, from here,” he said.

 1 https://www.cbre.com.au/research-reports/Australia-Industrial--Logistics...