Industrial land consumption is the process of land changing from vacant to occupied. This typically occurs when vacant land starts to be used for some type of use including: buildings, storage areas, car parks, quarries, etc.

Occupied industrial land can also become vacant which typically involves the demolition of buildings or removal of storage facilities. Returning occupied land to land supply creates negative consumption.

Net consumption, which is the measure reported in the UDP, is the amount of land that changes from developed (vacant land to occupied), less the amount of newly vacant land (land that has changed from occupied to vacant). This recycling of land accounts for net negative consumption that occurs in some inner and middle suburbs.

Estimating consumption for modelling exhaustion rates

Consumption rates are based on a long-term consumption trend (2004 to 2021) and a recent consumption trend (2014 to 2021) for each Significant Industrial Precinct (SSIP). The long-term consumption rates are generally lower than the recent consumption trends. This provides a range of potential times when vacant land becomes exhausted.

The method adopted in this report creates a linear exhaustion rate, however in practice, land supply in the SSIPs would become constrained prior to all vacant land being consumed. This is because:

  • the amount of new development would start to decline as land prices increase in response to increased scarcity. Users might be priced out of areas and search for other locations.
  • not all zoned land is suitable for development as either built space or non-built space (such as a storage yard) due to the configuration of the land such as area, shape or cost of providing infrastructure.

This modelling provides a useful estimate of the how the SSIPs will accommodate growth and the pressures they may encounter in the future.

Estimating vacant land for modelling exhaustion rates

The amount of vacant land and proposed industrial land are refined by using these assumptions:

  • All vacant and underutilised lots over 4 ha have been discounted by 20% to model potential subdivision.
  • All vacant and underutilised lots below 4 ha have not been discounted further as it is assumed that these lots will be consumed as currently configured.
  • All land is assumed to be useable, however, in reality some pieces of land will be used for other purposes (such as road reservations) or are not physically suitable for industrial development.

All Proposed Industrial land has been discounted in a two-step process:

  1. 15% discount to account for infrastructure such as major roads, drainage reserves and open space.
  2. 20% discount to model potential subdivision such as roads within subdivisions.

Local Industrial Precincts

The Melbourne Industrial and Commercial Land Use Plan (MICLUP) identified a number of Local Industrial Precincts. The purpose is to provide for a range of local industry and employment opportunities that support local communities and other businesses operating in the local area. They will be planned to support local service trades and the needs of smaller businesses serving more localised markets. They should be retained for industrial or employment purposes unless a planning authority has identified them for an alternate non-employment purpose.


Some evidence of the use of land. This includes buildings, hardstand storage areas, carparks, partly constructed buildings, etc.

Precinct Structure Plan

A land-use and infrastructure plan to guide development of the area over time. It sets out the intended future land uses, infrastructure and development guidelines.

Proposed Future Industrial

These are areas that have been identified for future industrial development in the growth corridor plans and previous metropolitan strategic plans, such as Melbourne 2030, Growth Corridor Plans and Plan Melbourne. The Melbourne Industrial and Commercial Land Use Plan (MICLUP) has reconfirmed these areas as well as clarifying the industrial role some areas will play in the future. This land is not currently zoned for industrial purposes and requires either the approval of a Precinct Structure Plan (PSP) or rezoning to an industrial zone. Once the land is zoned for industrial purposes it is assessed as either Occupied, Vacant or Underutilised.

Regionally Significant Industrial Precincts

The Melbourne Industrial and Commercial Land Use Plan (MICLUP) identified a number of Regionally Significant Industrial Precincts. The purpose is to provide opportunities for industry and business to grow and innovate in appropriate locations for a range of industrial and other employment uses that can contribute significantly to regional and local economies.

They will be retained and planned to allow a range of industrial and other employment uses, and where appropriate, new and emerging types of businesses that require access to affordable and well-located land to grow and innovate.

They may serve broader city functions or support activities which benefit from scale with some precincts offering opportunity to transition to a broader range of employment opportunities offering a higher amenity to workers and economic vibrancy.

State Significant Industrial Precincts

Plan Melbourne – 2017 to 2050 identified five State Significant Industrial Precincts (Western Industrial Precinct, Northern Industrial Precinct, Southern Industrial Precinct, Port of Hastings Industrial Precinct and Officer-Pakenham Industrial Precinct. The purpose is to provide strategically located land for major industrial development linked to the Principal Freight Network and transport gateways. They will be protected from incompatible land uses to allow continual growth in freight, logistics and manufacturing investment.


Used to identify industrially zoned land being used for agricultural or residential and agricultural use in selected municipalities. Previous UDPs (up until 2019) identified land as occupied. Identification of this underutilised land adds to the land classified as vacant. This category only applies to the municipalities of Brimbank, Cardinia, Casey, Frankston, Greater Dandenong, Hume, Melton, Mornington Peninsula Whittlesea and Wyndham.

Vacant Land

Land is vacant and no use is occurring on the land.

Zoned Industrial Land

The planning scheme zones identified as industrial for the Urban Development Program are:

  • Industrial 1, 2 and 3 Zones
  • Business 3 and 4 Zones
  • Commercial 2
  • Special Use 2, 3, 4, and 5 Zones in the City of Hobsons Bay, Special Use 1 Zone in the Shire of Mornington Peninsula (which is identified for industrial uses associated with the Port of Hastings and is not a general industrial zone) and Special Use Zone 6 in the City of Monash
  • Comprehensive Development Zone 2 in the City of Hume and Comprehensive Development Zone 2 in the City of Whittlesea
  • Precincts with Activity Centre Zones that are industrial in character within the City of Casey, City of Merri-bek and the City of Whittlesea
  • Land within the Melbourne and Moorabbin Airport Business Parks
  • Urban Growth Zone land identified as industrial in Precinct Structure Plans (PSP); Cardinia Road Employment PSP, Cranbourne East PSP, Cranbourne West PSP, Craigieburn North Employment Area PSP, Diggers Rest PSP, East Werribee Employment Precinct, Minta Farm PSP, Mt Atkinson PSP, Sunbury South PSP, Tarneit North PSPs, Toolern PSP, Truganina Employment Area PSP, Westbrook PSP and Wollert PSP.

Page last updated: 04/11/22