Source: Australian Bureau of Statistics

Longer term enquiry for buildings in 12 to 18 months is a growing trend in the South East. Consumer spending is expected to experience a positive shift because of the anticipated softening of monetary policy, which will particularly benefit the retail sector. This also relates to the forecasted industrial rents through the South East where growth is set to continue for the coming years. The latest Australian Retail Report by KPMG in December 2023 detailed the re-ignition of physical retail shopping with the report stating that 73% of Australians prefer to shop in store. The Australian Post 2024 e-commerce industry report indicated slowed growth in online shopping, with year on year reduction in online spending in both Gen Z and Y.

Retail brands have been anticipating this movement towards physical retail shopping and associated inventory requirements and as a result, are increasing warehouse space in proximity to retail stores, particularly in the South East Melbourne.

Figure 2: South East Melbourne Industrial take up by industry sector

Source: JLL Research