This article is from the Australian Property Journal archive
COLES Tumut in the Riverina region has become the first freestanding supermarket in NSW to change hands in 2024, according to the selling agents, as investment into supermarkets and neighbourhood shopping centres in the state surges past the rest of the country by more than 15%.
The Tumut supermarket Coles sold off-market through JLL’s David Mahood, Sebastian Fahey and Stuart Taylor to a private Victorian investor for $12.9 million.
Supermarkets in NSW have rarely been put up for sale in recent times. In September, Woolworths Umina Beach on the Central Coast became the first NSW freehold supermarket to be publicly marketed for sale in over 12 months.
JLL research shows retail transaction volumes in NSW have surpass the rest of the country by more than 15% in 2024, driven by strong population growth and robust consumer spending.
The trend is particularly evident in the supermarket-anchored asset class, which has seen 13 transactions this year, bringing the total value of freestanding supermarket and neighbourhood centre deals to $415 million.
Among the deals was a recently constructed Coles-developed Huntlee Shopping Centre in the Hunter Region selling for $33 million to a Sydney-based private investor.
“In a year marked by heightened off-market activity, retail investments in NSW continue to be highly sought-after,” Mahood said.
“Despite broader economic pressures, supermarkets continue to demonstrate remarkable resilience and attractiveness to investors.
“As cost-of-living concerns persist, the non-discretionary nature of supermarket spending has underpinned strong productivity and sales growth in this sector, drawing significant capital interest even in the persistent high interest rate environment.”
Fahey said supermarket-anchored assets in NSW “continue to dominate investor mandates”.
JLL has seen a “surge” in first-time investors entering the NSW retail sector, acquiring more than $160 million worth of centres in 2024.
Back in the Riverina region, nearly 500 enquiries were been made for Woolworths and Coles supermarkets which sold in May for a combined $13.3 million.
“Investor confidence in the sub-sector’s income stability is evident. This, combined with Australia’s projected population growth and a dwindling supply pipeline for supermarket-anchored investments, presents a compelling case for future rental growth across the sector,” Fahey said.
The sub-sector has seen a 104-basis point expansion from peak 2022 levels.
