Dr Andrew Wilson, Senior Economist and National Research and Development Manager for Davis Langdon said the trend towards rezoning industrial land to commercial in Victoria would have minimal impacts on the current market.

“Current demand for both industrial and commercial properties remains extremely weak in all capital city markets, with no real prospect of significant growth in the short to medium term," he said.

“Accordingly, moves to rezone property from industrial to commercial would be unlikely to have any noticeable impact on price levels particularly in the short term.”

His comments were backed up by Davis Langdon's Urban Planning Leader Maureen Jackson who suggested rezoning to commercial was probably not the best-use option for industrial land.

"We see strong interest and growth in firstly finding any available land and secondly, if it is industrial zoned land, considering the potential for rezoning to residential development and not commercial," said Ms Jackson.

"There is certainly a demand for more generic Business 1 zoned land in Victoria, but the highest and best use seems to be residential development, even if you factor in any environmental issues.

"In general, market demand for more housing opportunities combined with Government funding and planning policy makes residential development an obvious candidate rather than commercial development on industrial land."

For further information, contact Meaghan Jones on +61 3 9933 8800 or email mjones2@davislangdon.com.au