Woolies’ Bellarine supermarket’s special lease to draw buyers

Portarlington’s Woolworths Supermarket is listed for sale via expressions of interest. It’s landlord-friendly lease is expected to be widely sought.

A Woolies supermarket on the Bellarine Peninsula is set to become a honey pot for investors as it hits the market with a landlord-friendly lease.

The freestanding Woolworths supermarket at Portarlington has been listed for sale in an expressions of interest campaign that’s expected to be closely watched.

Located at 6-8 Brown St, the 1914sq m Commercial 1 zoned property is about 240m from the town’s waterfront, dominated by billionaire Paul Little’s investments in the town, such as the Portarlington Grand Hotel and the daily Port Phillip Ferries service to Melbourne’s Docklands.

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Woolworths Portarlington is only the second opportunity to acquire a regional Victorian supermarket in the past 12 months, following the sale of Coles Phillip Island, also handled by JLL, which transacted for $23.75 million at a benchmark yield of 4.66 per cent.

A similar yield would net close to $10m for the property.

Woolworths’ 15-year lease runs until November 2028, with two further 10-year options, providing a secure annual income of $483,998, plus GST.

While Woolworths pays all outgoings, including land tax, in the net lease structure, it also has fixed rental growth and future turnover rent upside, providing an income stream that protects against rising expenses and taxes.

The supermarket is on the edge of Portarlington’s CBD and 250m from the waterfront.

The supermarket is being offered via expressions of interest closing October 2 through JLL’s Stuart Taylor, Tom Noonan and Romanor Falconer.

Mr Taylor said supermarkets continued to attract strong demand from investors, particularly those underpinned by “older style” lease structures.

“These assets provide investors with exceptional income security, while protecting against the downside risk of rising expenses and taxes,” Mr Taylor said.

“Woolworths Portarlington also provides fixed rental growth, a benefit not often seen in supermarket leases that will be extremely attractive in the Melbourne market.”

Mr Noonan said the popular regional location still close to Melbourne would be a drawcard.

“To be able to invest in a tenant that’s Australia’s largest supermarket, it has a very landlord-favourable lease, a very defensive income from the daily needs tenant is certainly on the list of every private investor we deal with,” Mr Noonan said.

Investment by billionaire businessman Paul Little in the Portarlington Grand Hotel and Port Phillip Ferries service has bought more people into the town.

He highlighted that Portarlington’s transformation into a thriving commuter and lifestyle destination with an established population that swells significantly over summer, added to the strength of the opportunity.

“It’s a part of the appeal of investing in the likes of Portarlington, because connectivity to the Melbourne CBD is certainly going to drive investment in the town,” Mr Noonan said.

“It’s can to open it up to commuters to Melbourne and the underlying fundamentals of retail, and in particular grocery retail is pretty simple. More people in the town means more people in the store, which means a better performing tenant.”

Visitation grew by 36 per cent in 2024, supported by multiple major residential developments and the daily Port Phillip Ferry service, he said.

“The combination of strong population growth and rising tourism visitation will only continue to strengthen the supermarket’s long-term trading performance.”