Colliers’ Tim McIntosh, Mike Crittenden and James Wilson are offering a Woolworths supermarket on a rare net lease in regional Victoria for sale.

Freestanding supermarket investments remain one of the most tightly held and sought-after commercial asset classes nationally. In 2022, there were only 12 supermarkets sold across Australia for a total value of $249 million, representing a 17% decrease in volume to 2021.

Woolworths Kerang represents the only full-line supermarket in the Main Trade Area, with the 4,132 square metre supermarket and BWS being 100% leased to Woolworths Group on a 10-year lease with options to 2057. The supermarket benefits from a rare net lease structure and currently returns a net income of $975,000.

Colliers director of retail middle markets, Tim McIntosh said, “Victorian freestanding supermarkets represent the ultimate retail investment. Parochially owned by high-net-worth local private families for generations and rarely brought to market, especially in recent times given the exceptional sales performance that is being further bolstered by inflationary-led sales growth.

“Woolworths Kerang represents the only dominant supermarket offering within the Main Trade Area, with strong sales performance trading just under the percentage rent threshold.”

The freestanding supermarket benefits from multiple street frontages and convenient access to 167 on-grade car spaces, with prominent exposure to Murray-Valley Highway, the major arterial across northern Victoria.

Colliers head of retail middle market, James Wilson said demand for strong-performing supermarkets in regional areas continues to increase given the scarcity of stock brought to market.

“The performance of regional supermarkets nationally has far outpaced pre-pandemic levels. The defensive nature of supermarkets and scarcity of opportunities to purchase has seen investors frequently pursuing supermarket investments interstate, as seen with the recent sale of Coles Towoomba, which transacted for $27.4 million to a private Melbourne investor,” Wilson said.

“Kerang has an established and tightly held retail precinct with longstanding retail tenants and currently has no vacancy across the expansive retail strips of Wellington Street and Victoria Street. Woolworths Kerang services the wider Mallee region and its established agricultural heritage across dairy, cropping and livestock, representing a $284 million industry annually,” Crittenden added.

Woolworths Kerang is being offered for sale via an Expressions of Interest (EOI) campaign, closing at 2:00 pm (AEST) Wednesday 17 May 2023, and is expected to attract interest around $20 million.