June 2025 :: Market Updates
Industrial Property Outlook: What to Expect for the Remainder of 2025—and Why It Matters Now
Explore what’s ahead for Melbourne’s industrial property market in 2025. Learn how changing vacancy, rents and incentives impact investors, developers and occupiers—and why partnering with Rutherfords gives you the edge.
Industrial Property Outlook: What to Expect for the Remainder of 2025—and Why It Matters Now
Rents are stabilising. Yields are normalising. And opportunities are shifting.
As we move into the second half of 2025, Melbourne’s industrial property market is entering a new chapter—one that rewards foresight, performance, and strategic alignment over speed or scale.
Whether you’re an investor looking to protect and grow your portfolio, a developer managing multiple tenancies, or an occupier seeking a site that supports future growth—there’s a lot to consider. And even more to gain.
Here’s our latest market forecast and what it means for you.
The Outlook: Normalisation With Pockets of Opportunity
After years of tight vacancies and sharp rental escalations, the industrial market is beginning to rebalance. We’re seeing a more sustainable, performance-led cycle taking shape—especially across Melbourne’s North and West.
Key Forecasts for Remainder of 2025:
- Vacancy Rates: Holding steady around 4.5% in the West and closer to 5% in the North. While higher than previous lows, this opens up movement and creates leasing opportunity.
- Rental Growth: Moderating in most corridors, with potential uplift of 5–10% for modern SME-grade stock in strategic locations like Truganina, Somerton, and Campbellfield.
- Incentives: Becoming more common in select estates, particularly for speculative builds without pre-lease traction.
- Capital Values: Holding firm after recent softening, with increased attention on tenant covenant strength and occupancy certainty.
In short? The market is maturing—and strategic players will lead the next cycle.
What This Means for You
For Investors:
This is no longer a ‘set and forget’ market.
To protect yields and maximise long-term returns, active property management, strategic leasing, and clear asset oversight are essential.
- Vacancy hurts faster now. Tenants have more choice and negotiating power.
- Performance is the new premium. Property managers are expected to deliver insight and outcomes—not just admin.
- Opportunities remain. Especially in the 700–7,000 sqm bracket, where repositioning, strategic tenant engagement, and value uplift can be achieved.
- “The right PM partner doesn’t just manage your property—they protect your investment. That’s the difference.”
For Developers:
With supply still settling and competition increasing, success depends less on what’s built—and more on how it’s leased and managed.
- Leasing velocity is critical. Time on market impacts margin and bank confidence.
- Integrated leasing and PM strategies help secure tenants early and retain them longer.
- The mid-size tenant market (1,000–4,000 sqm) is where demand is shifting. Tailored space and flexible terms will win.
- Smart developers are moving now to secure specialist partners who understand how to position space, manage risk, and keep tenancies full.
For Occupiers:
If you’re looking to grow, renegotiate, or buy—now is the time to act with a clear strategy.
- There’s more stock—but not all of it fits.
- The right advisory partner can help you secure the best deal, avoid overcommitting, and find properties that grow with your business.
- Off-market deals and early access opportunities are increasingly valuable—but only if you’re in the right networks.
Why Rutherfords? Because Performance Is the Difference
For over 65 years, Rutherfords has been trusted by industrial property owners across Melbourne’s North and West.
But in 2025 and beyond, trust alone isn’t enough. Performance is what counts.
We’re not just here to lease your property or collect rent. We’re here to help you:
- Maximise retention and reduce churn
- Improve your vacancy absorption rates
- Increase yield and asset value
- Get proactive, not reactive, advice
- Build a property strategy—not just fill a tenancy
Whether you're managing one site or a growing portfolio, our integrated property management, leasing, and advisory model gives you what you need to make informed, commercially sound decisions.
Let’s Make the Rest of 2025 Count
The second half of the year holds significant potential—for those ready to act.
- Investors: It’s time to future-proof your portfolio
- Developers: Align leasing and PM strategies early
- Occupiers: Make moves with clarity and confidence
Rutherfords is ready to help you take the next best step in industrial property.
Want to talk strategy, not just space?
Contact our team today and find out how we can help you make smarter industrial property decisions—backed by data, local insight, and decades of experience.
