Woolworths sells 10-store national supermarket portfolio

CBRE, on behalf of Woolworths Group, has managed the divestment of a prime portfolio of 10 neighbourhood shopping centres in a transaction valued at more than $500 million, as part of its ongoing property recycling strategy.

Asian investment group Forest Endeavour has secured the prominent eastern seaboard portfolio in a landmark transaction negotiated by CBRE senior retail executives James Douglas, Joe Tynan and Michael Hedger.

The deal establishes Forest Endeavour as a key player in Australia’s highly sought after neighbourhood shopping centre sector, a favourite of institutional and private capital due to the highly resilient cashflows on offer, underpinned by leading listed groups – in this case Woolworths Group, a top 20 ranked company on the Australian Securities Exchange.

CBRE’s Mr Douglas said, “This major transaction provides a highly beneficial outcome for both parties. It crystalises and returns development proceeds for Woolworths, while delivering Forest Endeavour ten new, high quality assets offering growth potential in the one transaction.”

The prime Woolworths anchored assets are predominantly located in metropolitan and key satellite city locations ranging from Queensland to Tasmania.

Woolworths’ Director Property Development, Andrew Loveday, said: “We build and develop high-quality retail destinations that bring communities together and we’re pleased to have leveraged this unique opportunity. We appreciate the work done by CBRE in executing the deal and thank Forest Endeavour for their partnership throughout.”

The portfolio features a mix of open and high performing assets such as Kiama Fair, in southern NSW, Doolandella in Queensland and soon to be completed assets in Marsden Park and Austral in Sydney and assets under development in Chelsea Heights in Victoria and Belmont in Newcastle.

When fully developed the portfolio will have a total lettable area of greater than 50,000 square metres.

CBRE’s Mr Tynan noted, “The performance of the completed supermarkets is exceptional and the forecast sales of the centres under development will see them deliver meaningful sales in their respective catchments when opened and provide Forest Endeavour with resilient and growing returns in the future, with next to no capital leakage given the newly constructed nature of the assets.”