Ermington Woolworths destined for development?

A Woolworths supermarket in Sydney’s west could be destined for rapid development, after the freestanding store was put on the market.

Developers are expected to battle investors and occupiers for the Ermington supermarket, which has redevelopment potential due to its flexible “B2 Centre” zoning.

While the supermarket at 525 Victoria Rd is one of the company’s best-performing, with annual turnover around 60% above the national Woolworths average, it is leased only to 2021, marking a rare opportunity for someone to snap up a major site and potentially begin development within three years.

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With a site area of 2966sqm, the Woolworths is the largest supermarket within its trade area, which has a population of more than 26,000 people and sits 19km west of the Sydney CBD.

Colliers International’s James Wilson and Alex James-Elliott have been tapped to market the property on behalf of its private local owner.

James-Elliott says freestanding supermarket sales in New South Wales are exceptionally rare.

“Freestanding supermarket investments have become one of the tightest and most competitive markets among private investors, both domestic and offshore,” he says.

“On average only four freestanding supermarket transactions have occured each financial year over the past five years in New South Wales, reflecting how tightly held this asset class has been in over the past few years.”

Wilson says the short lease profile made the supermarket a compelling proposition with multiple options.

“An opportunity to acquire a freestanding supermarket featuring exceptional supermarket performance, and the flexibility of the short lease profile in metropolitan Sydney, rarely presents itself to the market,”

“Woolworths Ermington has an exceptional supermarket turnover, circa 60% above the national average, with significant potential income reversion given Woolworths current low occupancy cost.

“The short lease profile expiring in 2021 is attractive to investors, developers and occupiers given the redevelopment potential under the flexible “B2- Centre” zoning.”

The supermarket is being sold through expressions of interest.