Whitehorse: Land rates soar, industrial businesses move out

An industrial revolution is shaping up in Melbourne’s east, where a growing number of factories are being given a new lease on life. From funky bars and quirky cafes to a trampoline studio and even a circus school — here are some of the coolest makeovers.

Mitcham Social was opened in the former Thatcher steel factory in December.

Industrial businesses are being pushed out of Whitehorse as more entertainment, hospitality and recreational businesses move in.

A shortage of retail space means factories and warehouses which once housed hidden-away production lines are increasingly being opened to the public as they’re converted into restaurants, bars, gyms and recreational services.

Bar and restaurant Mitcham Social opened within the former Thatcher steel factory in December.

Bounce Trampoline Studio can be found alongside factories in Blackburn North.

Mont Albert’s Mister and Miss Cafe runs out of a former mechanics garage.

Bounce Trampoline Studio is situated in an industrial street in Blackburn and circus school the Fly Factory has taken over a factory space near Blackburn Station.

This “gentrification” trend is one CBRE real estate agent Joe Brzezek, who manages industrial sales and tenancies in the area, is more than familiar with.

He’s noticed the distinct shift in real estate in the area in the past two years and says it’s only going to escalate.

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“I see this trend continuing down the track and Blackburn, Box Hill transforming like we’ve seen with those inner city, industrial spaces,” he said.

“It’s good for residents. They’re going to have better amenity around their houses.”

Increasingly, the clients he speaks to about leasing and buying Whitehorse’s traditionally industrial spaces are business owners wanting to set up venues like cafes and micro breweries.

“The people I’m speaking to day to day, it’s not typically your industrial,” he said.

And the rise in cafes and entertainment uses seeking to open around Blackburn and Nunawading are forcing up land prices, making it “one of the strongest performing industrial locations across Victoria”.

The Fly Factory circus school operates out of a factory space near Blackburn Station.

“Rates have gone up so significantly over the last 12 months given this gentrification that we’re seeing,” Mr Brzezek said.

“Land rates have gone through the roof.”

CBRE just sold an industrial site near Blackburn station which it previously sold in 2018.

Mr Brzezek said the site’s capital value increased by more than 10 per cent in the 12 month period.

“That amount of growth in industrial is quite uncommon.”

He believes occupiers are moving to Whitehorse from the inner city market as zoning across Melbourne changes and the population grows, creating much more demand in the municipality.

“There’s basically no vacancy to lease, or to buy, and I think it’s only going to get worse, before it gets any better.”

He said some vendors were trying to buy “as much land as possible” in Blackburn because they could see where the market was heading.

But he said the rise in rates was putting off industrial clients, who were shifting their companies further east towards more price effective areas in Knox, like Bayswater.

He said landlords were also preferencing recreational tenants over industrial users amid the leasing space shortage, because they could command much higher rental rates from them.