Melbourne’s industrial real estate is reaping the benefit of the current low Australian dollar, with offshore money flowing into the market in the Victorian capital.

According to real estate services firm CBRE’s Industrial MarketView for the December 2015 quarter, foreign buyers accounted for 37% of all industrial real estate sales in 2015, up significantly from the 10% they accounted for in 2014.

In particular Melbourne’s industrial offerings attracted plenty of attention, especially in the latter part of 2015, with $746 million worth of industrial real estate moving in the December quarter, up from the $416 million in the September quarter.

According to the CBRE report, there is currently in excess of $1 billion worth of industrial transaction underway in Melbourne, much of which is driven by offshore money.

“With improved fundamentals, and an increase in offshore owners we are expecting investors to go higher up the risk curve in 2016,” CBRE national director - industrial & logistics Chris O'Brien said.

“Aided by the low Australian dollar, the industrial market will continue to be a sought after market on a global scale, with the higher comparative yields on offer strengthening its appeal,” O’Brien said.

According to CBRE, industrial rents are predicted to enter a positive cycle in in 2016, after a period of decline due to increased supply levels.

National industrial rents fell 1.9% in the 12 months to December 2015, fuelled by a 6.1% decrease in Perth, 3.8% fall in Adelaide and a 3.3% dip in Melbourne.

“As supply levels begin to level out nationally, there will be significant opportunity for growth in the market this year, with an uplift in values across core eastern seaboard logistics markets, as new stock is absorbed,” O’Brien said.

Melbourne in particular saw a supply boom during 2015, with the three months to December 2015 being the city’s strongest quarter for industrial supply in six years.

Another 840,000 square metres of industrial real estate is predicted to come online in Melbourne during 2016, thanks to large-scale developments in the north and south east of the city.