The Melbourne City Fringe commercial property market demonstrated resilience and investor appeal throughout FY25, underpinned by consistent transaction volumes, strong suburb-level performance, and robust investment metrics.
According to Stonebridge Property Group a total of 116 properties were sold across the city fringe, with an average sale price of $3.92 million.
Stonebridge Property Group’s Melbourne City Fringe team Max Warren and Dylan Kilner led the market with 43 commercial sales, totalling $144 million and achieving an average sale price of $3.35 million. Transactions spanned office, retail, warehouse, and mixed-use assets, including a $6.6 million office/warehouse on Hoddle Street in Abbotsford and a $2.83 million office in South Melbourne.
Investor demand remained strong for value-add opportunities, with most properties sold either vacant or on short-term leases and burdened by high land tax. These assets attracted owner-occupiers and landbankers seeking long-term capital growth over immediate rental returns.
Stonebridge’s Asia Practice Team led by Kevin Tong was a key driver of international buyer activity, contributing to 47% of all city fringe commercial sales by leveraging strong relationships with migration agents, legal firms, and accountants to connect with Asian capital. Additionally, an expanded database of local inner-city business owners ensured aggressive owner-occupiers were actively engaged with on-market opportunities.
High-Performing Suburbs Lead the Market:
South Melbourne, Collingwood, and Cremorne emerged as the most active precincts, recording significant transaction volumes across the financial year. In particular, Cremorne and Collingwood continued to attract strong demand from a diverse investor base, reinforcing their reputations as premier city fringe investment destinations.
Investment Metrics Remain Competitive:
Stonebridge’s FY25 data revealed land rates across its city fringe sales ranging from $3,611/sqm (195–199 Heidelberg Road, Northcote) to $15,041/sqm (250 Coventry Street, South Melbourne), with an average of $8,311/sqm where land areas were disclosed.
Similarly, building rates across sales with reported areas ranged between $3,611/sqm and $15,041/sqm, averaging $6,649/sqm. Yield performance remained competitive, with properties reporting yields averaging 6.97%, and premium assets consistently achieving yields below 6%.
Favourable Market Conditions and Sectoral Shifts Support Outlook
The Melbourne City Fringe market is well-positioned for growth, driven by demand in the industrial, logistics, and office sectors. Recent 2025 property market insights highlight continued strength in industrial and logistics due to the sustained growth of e-commerce, while the office sector is evolving toward flexible, tech-enabled formats. Meanwhile, retail assets are increasingly focused on delivering experience-oriented offerings to meet shifting consumer expectations.
“With continued population growth, evolving work patterns, and a thriving small business ecosystem, Melbourne’s city fringe remains a core focus for investors seeking long-term value. We are seeing increasing capital flow into precincts like Collingwood and Cremorne, which are viewed as the next-generation commercial hubs,” said Dylan Kilner, Director at Stonebridge Property Group.
“Despite broader economic headwinds, the Melbourne City Fringe has showcased its resilience. Investor appetite remains strong, especially for well-located assets that offer value-add or repositioning potential. The fundamentals of this market remain as compelling as ever,” added Max Warren, Director at Stonebridge Property Group.
With limited supply and a continued diverse buyer pool, the city fringe is primed for further recovery and expansion. A favourable interest rate environment and minimal foreseeable market interruptions have Melbourne poised for a steady and confident entry into FY26.
Join The Discussion