This is the second of four articles about industrial parks in Moorabbin and Cheltenham, which will focus on current usage types and changes in usage over the past 10 years, from 2006-07 to 2015-16. The previous article (July 2016) provided some background information about industrial parks in these areas, and outlined the main changes in the development of industrial parks seen in the past decade. Future articles will analyse changes in industrial park layout and construction over this time, and expected changes across industrial parks over the next decade.
Of the 270 individual lots within the 13 industrial estates across Moorabbin and Cheltenham, usage was identified for 226 of these lots in 2015-16, or 83.7% of the total. The balance of these lots was either vacant, unknown or for sale, at 16.3% (44 lots). There were, however, a greater number of vacant or unknown usages in 2006-07, at 20.0% (54 lots). As import activity increased and the economy started to rely more on mining investment and the services sector over the decade through 2015-16, demand for small industrial sites increased and vacancy rates fell.
Wholesaling operations accounted for the greatest proportion of total lots in 2015-16, at 26.3% (71). This increased since 2006-07 from 25.2% (68 lots) as a relatively strong Australian dollar over the 10 years (compared to the decade prior) encouraged greater importing and wholesaling activity. The main wholesaling operations in this segment included electrical and electronic goods; industrial equipment and machinery; food, beverage and tobacco products; consumer goods products; and motor vehicle parts.
There was an increase in the percentage of businesses engaged in professional, scientific and technical services over the decade, from 13.0% (35 lots) in 2006-07 to 14.8% (40 lots) in 2015-16. More of these types of businesses looked outside of the traditional retail or office locations in the Bayside and surrounding area for more cost effective and larger locations. Similarly, there was an increase in the number of construction and building companies locating to these industrial parks. Lower costs and larger areas were the main drivers behind this growth.
While some sectors increased their presence in the Moorabbin and Cheltenham industrial parks during the decade, others declined. The “other services” segment, mainly comprising electrical and electronic goods, and vehicle repairs and maintenance, fell from 8.1% (22) in 2006-07 to 7.4% (20) in 2015-16. This was in response to pricing deflation for many electrical products that saw more consumers throw away these goods instead of having them repaired, and a greater tendency for people to have their cars repaired by vehicle dealerships instead of by the “local” mechanic. Further, with the manufacturing sector declining over the decade, the percentage of manufacturers shrunk from 7.4% (20 lots) to 5.6% (15 lots).
In addition to these usage changes, different demographics tend to have different demand needs for properties in industrial parks. We are seeing an increased demand for new industrial properties from younger demographics looking to start or expand technology-based businesses, such as computer services and professional or technical services. Conversely, older demographics are more likely to be happy with older industrial developments, mainly using these properties for storage or traditional businesses, including wholesaling and construction.