Industrial business valuations in Melbourne

Where Melbourne's industrial businesses sit, and why it matters

Location tells a valuer a lot before the accounts are opened. The south-east, centred on Dandenong South, is the manufacturing belt: in 2022 the Victorian Government reported that Dandenong hosts almost 1,400 manufacturing businesses and more than 21,000 workers. The north grew up around vehicle assembly, with Ford building cars at Broadmeadows until 2016. In the west, the state is protecting land at Truganina for a future Western Interstate Freight Terminal.

Each area brings its own questions. A Dandenong South contract manufacturer is judged on customer mix, machine utilisation and the age of its presses or CNC cells. A west-side warehousing operator is judged on its contracts with retail and FMCG customers, the term left on its lease, and how much revenue sits with one account. We start with those questions, not a generic checklist.

What did the end of car making change for Melbourne suppliers?

Ford ended its Australian manufacturing at Broadmeadows and Geelong in October 2016. Toyota closed its Altona plant on 3 October 2017 with the loss of about 2,600 manufacturing jobs, and Holden built its last car at Elizabeth in Adelaide later that month. Component makers, toolmakers and engineering shops that supplied those plants lost their anchor customers within about a year.

The suppliers still operating found other work, and we ask exactly what that work is: trucks and trailers, caravans, rail, defence, agriculture, building products or medical devices. Two points follow for value. Earnings from before the closures describe a different business, so we weight recent years. And moving into new sectors usually needed new tooling, fixtures and quality certifications, so we test whether that spending is finished or still ahead of the buyer. The manufacturing valuation guide covers capex and tooling in more depth.

How do the port and the freight network affect value?

Ports Victoria describes the Port of Melbourne as Australia's largest container and general cargo port, handling more than a third of the nation's container trade. For importers, wholesalers and distributors, being close to it is a real cost advantage. It also means gross margin moves with ocean freight rates, container detention charges and the Australian dollar, so we look at landed cost and margin over several years to stop one good freight year being treated as the new normal.

Rail freight is changing too. The Australian Government's National Intermodal Corporation has started planning for a Beveridge Interstate Freight Terminal in the north, and Victoria is protecting the Truganina site for when more capacity is needed. A transport business with a depot near either location may benefit one day, but a valuation captures contracted and probable earnings, not what a planning map shows. Where a business plan genuinely depends on a future terminal, a discounted cash flow can model it with the risks priced in.

Leases, owned property and the cost of moving a factory

Victorian planning policy identifies state-significant industrial precincts and protects them from incompatible land uses, which helps established operators stay where they are. Even inside those precincts, a manufacturer with overhead cranes, heavy power, trade waste approvals and a reinforced slab cannot move cheaply when a lease ends. We read the lease for term, options, rent review method and make-good obligations, and we ask what it would cost, and how long it would take, to recommission elsewhere.

Where the owner holds the property in a related trust or company, we value the business as a tenant paying market rent. A business paying its owner below-market rent looks more profitable than it is; one paying above-market rent looks worse. Normalising the rent fixes both, and any value in the property itself sits outside the business valuation.

What do we need from a Melbourne business?

• Three years of financial statements and a current year-to-date profit and loss
• Sales by customer for the same period, with your largest customers named
• A plant and equipment register with ages, condition notes and any finance owing
• The premises lease, or rent details if you own the property through a related entity
• A staff list with roles, award or enterprise agreement coverage and who holds the key relationships

The valuation readiness check shows how prepared you are. Documents come through the private upload link on your matter, never by email.

Servicing Melbourne and Victoria

A Dandenong South press shop and a Truganina warehouse are valued the same way: from your documents, the plant register and calls between a valuer and the people who run the business. There is no office to come into, and the work does not need one. Most Melbourne engagements are completed without a site visit; if the plant or operation needs to be seen, we say so when scoping and agree any visit and its cost before it happens. We confirm the fee in writing before we start. No hourly billing. The fee bands are on our pricing page.