Melbourne August 2025 Commercial & Industrial Market Update

Melbourne’s industrial property market is showing strong resilience in August 2025, particularly as defence-linked infrastructure and freight logistics continue to attract government and private investment. The standout headline this month is Lockheed Martin’s new deal with Avalon Airport, where the defence giant will establish a sovereign guided missile storage and logistics facility. This follows increasing federal interest in decentralised munitions storage and critical supply chain security — and positions Melbourne’s west as a major player in national defence logistics.

Avalon Airport Emerges as a Strategic Defence & Logistics Hub

The deal between Lockheed Martin, Linfox, and Avalon Airport represents a turning point for Victoria’s industrial landscape. The new munitions and logistics facility, located on-site at the Avalon precinct, will support the General Missile Launch Rocket System (GMLRS) as part of the AUKUS partnership. This agreement boosts both the industrial profile of Avalon and the broader Geelong corridor.

• The site will feature secure storage for guided missile systems, under Commonwealth guidance

• Linfox will operate the cargo and warehousing component through a dedicated lease

• Avalon Airport’s location between Melbourne and Geelong offers road, air, and sea access

• The deal strengthens sovereign supply chains and decentralised defence logistics

Hot Industrial Suburbs Leading Melbourne’s Growth

While Avalon headlines this month’s updates, multiple suburbs across Melbourne’s west and north continue to show strong leasing, development, and strata sales activity. Developers are chasing opportunities tied to major road infrastructure, and tenants are following availability and scale.

• Truganina: Remains Melbourne’s top logistics hub with national brand pre-leasing

• Melton: Emerging quickly as a new industrial zone with major land release activity

• Campbellfield: Strong demand from warehousing and last-mile operators close to the ring road

• Epping: Continues to draw institutional funding and tenant growth in health logistics

• Sunshine West: Gaining interest from SMEs seeking affordable strata and good access

Latest Land Releases and Industrial Planning in Victoria

Land availability is one of the key issues facing Melbourne’s industrial market in 2025. The Avalon defence deal is just one of many developments accelerating interest in the outer west and regional industrial corridors.

• Western Highway Industrial Estate in Melton begins staged lot release with early tenant interest

• Craigieburn North Employment Area continues development approvals, driving demand in the north

• Werribee East employment precinct proposed expansion aligning with freight and tech sector plans

• Geelong Ring Road Logistics Park sees final stages released by developers

• Dandenong South seeing infill demand from small-scale warehousing, with limited new supply

Market Drivers and Trends in Melbourne’s Industrial Sector

Rents continue to rise across Melbourne’s western and northern corridors, while vacancy remains below the national average. As tenants seek automation-ready and ESG-aligned warehouses, developers are fast-tracking upgrades and targeting long-term leases.

• Tenant demand favouring larger format warehousing with automation-ready specs

• Melbourne’s west and north corridors remain dominant for freight, food, and cold chain tenants

• Investors attracted to triple-net lease returns and long-term growth certainty

• Continued government and AUKUS-related investment bolstering industrial confidence

Key Considerations for Landowners and Developers

Defence industry proximity, last-mile access, and future-ready layouts are giving landowners new angles to explore. Those able to visually present their assets with development potential, sustainability inclusions, and logistics access stand to gain the most.

• Clear 3D masterplans help build tenant and investor confidence for undeveloped land

• Inner-ring and outer-corridor opportunities are seeing record per-sqm pricing when marketed right

• Early visualisation of staging, scale, and use can accelerate leasing campaigns and JV discussions

How Commercial Property Marketing Can Help

At Commercial Property Marketing, we help developers and agents unlock maximum value from their industrial assets. Whether you’re targeting defence supply chains or fast pre-leases, we use 3D visuals, aerial renders, interactive IMs, and full-stack campaigns to accelerate your outcomes.