West Melbourne warehouse sale ignites property market, driving land rates to new heights

Melbourne’s real estate landscape is ablaze with excitement following the unprecedented sale of a clear-span warehouse in the city’s fringe.

Cushman & Wakefield’s Investment Sales Melbco team in Victoria has confirmed that the sale of the property at 154-160 Stanley Street, West Melbourne, has set a new benchmark for land values in the low-density submarket, shattering previous records with a transaction rate surging north of $8,000/sqm.

This astonishing figure marks a 17% increase from the most recent warehouse sale of 500 sqm in the immediate precinct and stands significantly higher than any transaction observed over the past 18 months.

Cushman & Wakefield’s Alexander Leggo, Anthony Kirwan, and Leon Ma orchestrated the successful sale. The property, featuring a substantial land holding of 496 sqm*, attracted immense interest, with 18 inspections leading to three unconditional offers and ultimately selling at a remarkable $300,000 above the initial expectations.

The buyer, an owner-occupier, recognised the property’s unique potential, embarking on a groundbreaking new residential project set to showcase an eclectic residential warehouse conversion of grand proportions.

Alexander Leggo of Cushman & Wakefield said: “Warehouses in Melbourne’s CBD fringe, particularly those with flexible zoning and significant development upside, are increasingly sought-after. They provide a blank canvas opportunity for residential or commercial use, allowing for the incorporation of existing improvements to create something with real character.”

The soaring interest in city fringe warehouses is a testament to their immense appeal for owner-occupiers, developers, land bankers, and value-add investors. The underbidders from recent sales campaigns in West Melbourne have stimulated new entrants in the market to put their best foot forward, reflecting the scarcity of such prime properties available to buyers.

Additionally, the campaign witnessed significant interest from hospitality and retail businesses, underscoring the persistent demand for well-located logistics and storage spaces in close proximity to Melbourne’s bustling CBD.

The precinct benefits for favorable Special-Use Zone designation opens the door to a myriad of development opportunities, including office spaces, residential complexes, student accommodations, serviced apartments, co-living spaces, and retail outlets, up to four levels (subject to council approval).

“The underbidders from our recent sales campaigns in West Melbourne really pushed new entrants in the market to secure a rarely warehouse of scale”
“Surrounding infrastructure investment underpinned by a proximity to the CBD and Melbourne’s perpetual population growth have pumped buyers with confidence as the long-term growth prospects for such locations appear inevitable” said Cushman & Wakefield’s Anthony Kirwan