Melbourne’s middle ring & the rise of high-quality hybrid warehousing
Melbourne’s middle ring is experiencing a notable evolution and it’s redefining what “industrial” looks like. Once dominated by traditional logistics and storage facilities, the area is now seeing strong demand for premium architecturally designed, hybrid warehouses that merge retail presentation with functional e-commerce capability.
Shifts in consumer behaviour, retail strategies, and logistics requirements have catalysed the emergence of this new asset class “hybrid retail”. These facilities are designed to function both as destination retail environments and as practical spaces for storage, display, and business operations.
Design and Function in Balance
This hybrid concept has already gained significant traction in established industrial precincts across Sydney, the Gold Coast, and Brisbane. Melbourne developers are now following suit, delivering craft-built, architect-designed warehousing that incorporates community-focused amenities.
A standout example is Vermont Inc., Ledlin’s development at 194 Rooks Road, Vermont, which sets a new benchmark for e-commerce business parks in the city’s eastern middle ring. Its design highlights include glazed warehouse entry doors, premium fixtures in amenity spaces, and shared features such as a rooftop terrace, boardroom, and co-working areas for tenants and visitors to hire.
As a commercial property valuer, it is encouraging to observe developers placing a strong emphasis on design excellence, quality finishes, and the needs of both occupiers and their customers. This approach aligns with Melbourne’s industrial heritage and leverages the city’s excellent arterial connectivity, as well as the increasing prevalence of remote and localised working arrangements.
Market Momentum and Opportunity
The emergence of these hybrid spaces is reshaping the value landscape for commercial property. The sector is clearly positioned for growth and is likely to become a highly sought-after segment of the property market.
Market Examples:
12-20 Victoria Crescent, Abbotsford: This Industrial 1 Zoned brownfield site of 4,823 sqm presents an opportunity for a seven-level commercial development. However, consideration should be given as to whether a development similar in nature to 194 Rooks Road may represent the highest and best use for the site.
1-9 Wirraway Drive, Port Melbourne: Comprising 5,182 sqm, this underdeveloped Commercial 2 Zoned lot benefits from a strategic location and prominent corner exposure.
Recent settled sales for well-designed e-commerce units across metropolitan Melbourne are exceeding $6,000 per square metre. This trend underscores a shift in the dynamics of warehousing supply and highlights the strong sale values being achieved for high-quality, thoughtfully designed industrial spaces.
As developers continue to elevate design standards and align with the needs of modern occupiers, Melbourne’s middle ring is set to become a focal point for high-performance industrial assets.