Melbourne’s South East industrial market is experiencing an upward rise in retail trade take-up, driven by confidence in the precincts weighting to major shopping centres, strengthening in-store shopping trends, and strong population growth projections.

The South East recorded an all-time high take-up level for the Retail Trade sector in 2023, with over 106,000 sqm in gross take-up. This accounted for 26.4% of the precincts total lease activity for the year, which is the second highest annual ratio of all time behind 2018. Ten separate occupier moves made up the annual take-up level, which is once again, an all-time high for the South East. This gross take-up level is the second highest by precinct in Melbourne, only falling short to the West with 163,000 sqm. The West still attracts industrial take-up due to its proximity to the airport, freight lines, port of Melbourne, and its existing logistic estate amenities. However, the West observed a reduction of 54% in retail trade take-up from 2022 to 2023. In contrast, the South East industrial take-up has seen an uplift in Retail trade take up of 379% between 2022 and 2023.

The growth in industrial take-up by retail businesses mirrors improving shopping centre performance. The South East is renowned for its major regional shopping centres such as Chadstone, Fountain gate and Eastland. When looking at moving annual total (MAT), the South East accounted for 64% (MAT) of all tracked retail centres across Greater Melbourne in FY2024.

Sustained population growth in the South East has resulted in a concentrated market, making it a prime opportunity for retail brands to gain exposure and expand their presence. ‘Victoria in Future 2023’ (VIF2023), the official state government projection of population and households predicts that in the 10-year period between 2021 and 2031, the South East will see a population increase of 201,113 (at an SA4 level). This is second only to the West precinct (288,296) when looking at Melbourne’s population forecast (table below for reference).

Figure 1: Melbourne SA4 population by suburb

Source: JLL Research