In recent months, research has outlined an undersupply of industrial land across Melbourne. Whilst the under supply of dwellings often grabs the headlines, Melbourne’s record investment in 2.2 million square metres of new development within Melbourne’s industrial corridors between 2020 and 2022 has resulted in a worrisome shortage of available land.

The Victorian Government has been working in the background to provide certainty for the development community in the industrial land space. Consequently, Amendment VC215 was gazetted on 3 March 2023 to make various changes to the Planning Policy Framework for local planning schemes to provide a strategic framework for the ongoing release of industrial and commercial land throughout metropolitan Melbourne.

Significantly, Amendment VC215 makes the following changes:

• Introduces the Melbourne Industrial and Commercial Land Use Plan as a reference document into the Victorian Planning Provisions (all planning schemes).
• Alters strategies within the Victorian Planning Provisions to align with the directions of the Melbourne Industrial and Commercial Land Use Plan.
• Introduces a new Clause 17.03-3R to municipalities in Metropolitan Melbourne, wherein the policy seeks to outline objectives to achieve the objectives of the Melbourne Industrial and Commercial Land Use Plan.
• Introduces a new Clause 17.03-3R to municipalities in Metropolitan Melbourne based on the regions of Metropolitan Melbourne (eastern, inner, inner southeast, northern, southern, and western), with the policy outlining various strategies associated to align with the objectives of each region.

The Melbourne Industrial and Commercial Land Use Plan, issued in 2020, assesses the current and future needs for industrial and commercial land across metropolitan Melbourne.

More specifically, the introduction of Amendment VC215 offers:

• Clearer planning direction for the preservation and identification of suitable industrial and commercial land in Melbourne, which will support industry and employment growth.
• Policy which acknowledges that some regionally significant industrial precincts can support more diverse employment-generating uses such as offices and creative industries where accessible and compatible with the surrounding land uses.

Each identified region within Metropolitan Melbourne outlines specific strategies associated with the region, including:

• The inner metro region promoting the role of the Fishermans Bend National Employment and Innovation Cluster (NEIC) in engineering, design, innovation and advanced manufacturing.
• The inner southeast metro region supporting the Bayside Business District by discouraging incompatible and non-business uses and subdivisions that would fragment this land and compromise its function.
• The eastern metro region protects the Clayton-Mulgrave, Scoresby-Rowville and Bayswater-Kilsyth industrial precincts by retaining industrial land primarily for industrial uses and discouraging the creation of smaller lots.
• The western metro region protecting the Toolern, Plumpton and South of Werribee, and industrial land adjacent to major transport gateways through retaining industrial uses on industrial land and supporting compatible employment uses in areas well connected to transport networks.
• The southern metro region protecting the Clayton South, Moorabbin, Moorabbin Airport, Braeside, Carrum Downs, Seaford, Cranbourne West and Casey Fields South industrial areas through retaining industrial land primarily for industrial uses and limiting the growth of incompatible and non-industrial uses.
• The northern metro region discouraging subdivision that would lead to the creation of small lots in the Northern State Significant Industrial Precinct and protecting established industrial precincts including the Tullamarine, Keilor Park, Keilor East and Airport West industrial precincts.

Melbourne’s industrial corridors have experienced unprecedented growth since 2020. Amendment VC215, introduced on 3 March 2023, provides more targeted directions for the different industrial precincts within Metropolitan Melbourne including increased restrictions in some locations, and opportunities for more flexibility in some industrial precincts.

Given the Melbourne Industrial and Commercial Land Use Plan was prepared prior to the record growth in development within the industrial precincts and now industrial land shortage since 2020, it is likely that there will continue to be a hotly contested industrial market. Further, it will be interesting to see whether the State Government explores a ‘refresh’ of the 2020 Melbourne Industrial and Commercial Land Use Plan in the near future in light of the dwindling industrial land supply.