August 2025 :: Market Updates
Industrial Property Outlook - July 2025 For Melbourne’s North & West: Insights for Investors, Developers & Occupiers
Explore what’s ahead for Melbourne’s industrial property market in 2025. Learn how the industrial market is normalising, what that means for investors, developers and occupiers—and why partnering with Rutherfords gives you the edge.
Industrial Property Outlook: Insights for Investors, Developers & Occupiers.
We’ve distilled the latest expert insights from the recent REA Group Commercial Property Market Outlook - and pulled out what matters most for industrial property moves in Melbourne's north and west.
1. Vacancy Rates Are Rising — But That Creates Opportunity
Vacancy is climbing off record lows across Melbourne’s industrial sector, especially in the North. While it may raise eyebrows, it’s actually a healthy correction that’s opening up long-stalled movement in key precincts.
What this means for you:
- Investors: Review lease expiry profiles now. Longer vacancy periods may impact short-term returns, but strategic lease structuring and proactive management can preserve asset value.
- Developers: Pre-commitments and targeted marketing are now essential. Projects without a clear occupier strategy will struggle.
- Occupiers: More stock means more options. If you’ve been waiting for the right size or spec, this may be your window.
How Rutherfords can help:
With deep local knowledge across Campbellfield, Somerton, Laverton and beyond, we can pinpoint under-the-radar opportunities and craft occupancy strategies tailored to your goals. From lease-up strategy to tenant match-making, we help you move confidently.
2. Rents Are Stabilising, Incentives Are Rising
Rental growth is slowing in most corridors, but modern, mid-sized stock in strategic locations (Truganina, Laverton North, Campbellfield) is still achieving strong results. Incentives are becoming more common—especially for spec builds and older assets.
What this means for you:
- Investors: Stay firm on rental rates but use smart incentives to protect long-term value. Engage proactively at renewal.
- Developers: Design with flexibility in mind. Tenants are prioritising fit-for-purpose over flashy specs.
- Occupiers: Now is the time to renegotiate terms, upgrade locations, or lock in longer-term leases on favourable conditions.
How Rutherfords can help:
Our leasing and property management teams use live market data and experience from hundreds of campaigns to guide your rental strategy, advise on incentives, and ensure you’re playing the long game, not chasing short wins.
3. Demand Is Realigning Around Use, Not Just Size
There’s a clear spike in inquiry for logistics, food-grade, freezer/cool room, and trade supply-style warehouses. Functional fit now matters more than square metres.
What this means for you:
- Investors: Assets that suit trending tenant types (cold storage, e-commerce fulfilment) will outperform.
- Developers: Build to suit is back in favour—but only if aligned with verified local demand.
- Occupiers: Fit matters. Now is the time to upgrade into spaces that enable efficiency, compliance, and future growth.
How Rutherfords can help:
We don’t just list space—we consult on how your property can perform. From repositioning advice to leasing to the right audience, we tailor strategies to the shifting needs of the industrial landscape.
4. Industrial Sales Still Holding Strong in Sub-$5M Bracket
Sales volumes remain strongest in the sub-$5M space, especially for well-located, income-producing or owner-occupier-ready stock. Interest rate pressure has cooled the top end but opened up opportunity for savvy buyers.
What this means for you:
- Investors: There’s still strong appetite for securely leased assets—especially with upside. Cap rate compression is re-emerging for the right stock.
- Developers: Small strata projects and infill sites remain in demand—but timing and tenant mix are critical.
- Occupiers: With market stabilising, it’s a good time to explore buying rather than leasing—especially for businesses wanting security or control.
How Rutherfords can help:
Our sales agents know the local investor network, asset values, and leasing environment inside out. We help structure deals that work on paper and in practice—and guide you through the right buy or exit strategy based on your goals.
5. Local Intelligence Beats Market Headlines
Big-picture data rarely captures the real dynamics in Melbourne’s industrial corridors. In places like Somerton, Broadmeadows, Laverton and Sunshine, micro-trends, road upgrades, and tenant churn can swing values more than national trends.
What this means for you:
- Investors: Asset performance often depends more on local relationships than macro cycles.
- Developers: A good block on the wrong street can cost you 6+ months. Site selection is critical.
- Occupiers: Don’t rule out suburbs based on outdated assumptions. Local competition, access, and council factors vary widely.
How Rutherfords can help:
Our team doesn’t rely on reports alone. We’re on the ground every day, talking to tenants, seeing movement early, and helping clients make decisions with clarity and local advantage.
Summary: Smarter Moves Start With Strategy
The industrial market isn’t cooling—it’s normalising. And that creates real opportunity for those who can see around the corner.
Whether you’re buying, selling, leasing, or planning your next project, Rutherfords brings the local insight, commercial acumen, and trusted relationships to help you take action that lasts.
Want to talk through what this means for your site, your portfolio, or your next move? We’re here to help.
