Fierce competition in the sale of two freestanding supermarkets this month highlight the surge in demand for retail investments.

Bernardi’s Marketplace Forbes in NSW’s Central West sold following a highly competitive on-market sale campaign that attracted nearly 200 enquiries and resulted in over $40 million in underbidder capital.

In Melbourne, freestanding Woolworths Doncaster East supermarket for $16.35 million – the sharpest yield for a full-line supermarket since 2022.

Woolworths Doncaster East achieves benchmark

Colliers successfully transacted the freestanding supermarket in Melbourne’s Eastern suburbs following an exceptionally competitive campaign that underscored the strength of demand for prime retail assets.

The supermarket, located in Melbourne’s affluent Doncaster East just 18km from the CBD, attracted extraordinary interest, with more than 300 enquiries, over 40 inspections, and more than 22 formal offers from a diverse mix of local buyers and family offices, Asian capital, institutional and interstate groups.

At the close, the highly competitive bidding achieved five unconditional offers on contract and left an estimated $260 million in unsatisfied capital still seeking similar opportunities.

“This result underscores the extraordinary appetite for supermarket investments in today’s market,” said Tim McIntosh, National Director of Retail Middle Markets at Colliers.

The Woolworths Doncaster East asset was offered with a recently renewed 10-year NET lease to Woolworths Group until 2036 with no further options, occupying a 3,213sqm Commercial 1 zoned landholding within the established Devon Plaza retail precinct. The property benefits from exposure to over 20,000 vehicles daily and proximity to the transformative $26 billion North East Link infrastructure project, which is expected to further enhance connectivity and land values.

Bernardi’s Marketplace Forbes sells to a maiden retail investor

JLL agents David Mahood and Sebastian Fahey exclusively marketed the Central West supermarket, which was the first freestanding supermarket formally brought to market in NSW this year.

“Purchased by a private investor, Bernardi’s Marketplace Forbes was hotly contested, resulting in an unconditional signed contract at the conclusion of the Expressions of Interest sale campaign,” said Mr Mahood, Senior Executive, Retail Investments NSW at JLL.

“Generating over $40 million in underbidder capital, investors are clearly willing to compete aggressively to acquire highly defensive retail investments anchored by established and high performing operators.”

Bernardi’s Marketplace Forbes is anchored by a brand new 10-year net lease with 3.0 per cent fixed annual rental reviews and delivers an attractive weighted average lease expiry (WALE) of 9.74 years. The 5,248 sqm purpose-built supermarket features state-of-the-art facilities and distribution capability, complemented by a pharmacy tenant and Forbes’ only undercover car parking facility across a substantial 8,461 sqm freehold landholding.

The sale of Bernardi’s Marketplace Forbes follows JLL’s recent off-market transaction of Woolworths Cootamundra for $19 million to a private investor, reflecting a yield of 5.5 per cent.

“These transactions reinforce the strong demand for highly defensive retail investments with established anchor tenants,” said Mr Fahey, Senior Executive, Retail Investments NSW at JLL.

Strong demand from investors

With supply at historic lows, supermarkets have become a cornerstone for investors seeking stability and long-term growth, says Mr McIntosh from Colliers.

“Freestanding supermarkets with long-term NET leases are exceptionally rare, and investors are increasingly prioritising assets that combine essential-service security with strong underlying land value and future development potential,” he said.

In NSW, while NSW retail transaction volumes have increased overall, the sub-$100 million retail investment market remains tightly held, with transaction volumes sitting 34.9 per cent below last year’s levels. Opportunities below $100 million are expected to remain constrained, further intensifying competition and continuing to deliver strong pricing outcomes for quality retail assets.

“As demand for retail investments continues to strengthen as on-market opportunities remain severely limited, we’re seeing unprecedented market activity with our average bids per campaign rising from four to nine,” said Mr Mahood from JLL. “This supply-demand imbalance creates a brief window for owners to capitalise on attractive market conditions, as demonstrated by the sale of Bernardi’s Marketplace Forbes.”