This article is from the Australian Property Journal archive
A COLES supermarket in Launceston is set to test investor demand as the first freestanding supermarket in Tasmania’s second largest city to hit the market in more than seven years.
The strong performing Coles Launceston, located at 128 Wellington Street, spans 2,164sqm with at-grade parking for 110 vehicles and plans in place for a complete redevelopment of the supermarket.
Tom Noonan, Stuart Taylor, Jarrod Herscu, and MingXuan Li from JLL, alongside Rorey James, Kevin Tong, and Justin Dowers from Stonebridge, have been appointed to manage the public tender process on behalf of a private investor.
“The opportunity Coles Launceston presents is twofold: a robust supermarket in a highly strategic location, and the clear potential for a significant redevelopment to turn the asset into Tasmania’s flagship freestanding supermarket,” said Noonan.
“It’s a combination that’s hard to find and presents a valuable proposition for investors.”
The redevelopment would see the store transformed into a large 3,700 sqm full-line store, which would make it the largest freestanding Coles in Launceston.
“It’s rare to encounter a property offering such flexibility. Whether an investor is looking to capitalise on a robust supermarket performance or pivot to harnessing the redevelopment potential, Coles Launceston offers a unique proposition,” said James.
The supermarket occupies a prime 5,590 sqm landholding, located less than one kilometre from Launceston’s city centre, with the gateway corner site boasting three frontages.
“Transactions of freestanding supermarkets and neighbourhood shopping centres have contracted in 2023, with volumes down approximately 37% on 2022, and 74% on the record high volumes seen in 2021. However, this has largely been due to supply, with extremely low amounts of assets being presented publicly to the market,” said Taylor, senior director at JLL.
“We are actually seeing very strong demand for this retail sub-sector due to the highly defensive and secure nature of the income streams. Freestanding supermarket investments are often referred to as ‘recession proof’.”
Last month, a freestanding Coles supermarket in Melbourne’s bayside suburb of Hampton was offered for the first time in 35 years, while in June a 2018-built freestanding supermarket in Camberwell sold for $37 million to Asian capital-backed investor Trident Capital Group.
Coles Launceston is being offered for sale via public tender, which is set to close on 18 October 2023.
“Freestanding supermarkets are always an investor favourite. The blue-chip fundamentals of the asset class are of great appeal to a variety of investors and we expect Coles Launceston to attract a strong amount of interest,” concluded Dowers.
