First blue-chip supermarket investment offering for Fishermans Bend precinct

26 May 2023

The first major supermarket offering in the Montague precinct of Fishermans Bend – leased to S&P/ASX 20 giant Coles – has hit the market, offering a blue-chip opportunity to invest in Australia’s largest urban renewal precinct.

Fitzroys’ Chris Kombi, Chris James and Ben Liu are marketing the 2,345sqm property at 263 Normanby Road, South Melbourne, on the ground level of the brand-new R.Iconic development.

Coles and Liquorland will begin trading from the premises in November once all tenancy fit- out works are completed, on a secure 10-year lease plus options on a deal that was also negotiated by Fitzroys.

Expectations for the Coles at 263 Normanby Road are of in excess of $17 million and interest is expected from local, national and international buyers.

The self-contained property comprises a ground floor area of 1,752sqm and mezzanine level of 593sqm, at the base of the 32-level R.Iconic residential tower. Liquorland will trade from 180sqm within the property, which has a dominant 90-metre frontage to Normanby Road and Boundary Street.

The Coles is perfectly positioned opposite the Montague Street Light Rail Station, providing access to thousands of daily commuters and a direct route to the Melbourne CBD and surrounding suburbs. The property is within walking distance to Crown Casino, Southbank Promenade, the Melbourne CBD and Docklands. There is also convenient access to major arterials including Citylink and West Gate Freeway.

“This is a remarkable chance to invest in both a brand-new blue-chip retail asset and in Australia’s largest urban renewal precinct,” Kombi said.

“This will be the first major supermarket to service the Montague precinct.

“Coles undertook a feasibility study of the area and has made the astute decision to get into a prime location of the Montague precinct, within affluent South Melbourne, in a corner site on the cusp of a building boom.”

“The property is at the epicentre of the Montague precinct’s building boom, with 4,800 dwellings within only 500 metres of the property at various stages of completion, planning and construction.”

The R.Iconic towers has delivered 456 apartments, while the 40-level stage 2 of the project, next door at 253 Normanby Road, will deliver 40 levels and another 471 apartments.

Normanby Road set to become a major high-rise thoroughfare, with several 30-plus level developments under construction and planned for the precinct.

“We’re really starting to see the development potential of the Montague precinct come to fruition. We’re also starting to see the flow-on effect to the area’s retail landscape,” James said.

“Coles has found a position at the seat of Australia’s largest urban renewal project. The 480-hectare Fishermans Bend currently has a population of 4,354, and Melbourne City Council expects this will skyrocket to 80,000 residents and provide employment for 80,000 people by 2050.”

“The apartment development pipeline in the immediate area will provide an excellent catchment for Coles in the coming years, and the precinct’s focus as a key residential and employment hub offers unrivalled prospects for ongoing trade growth.”

“We’re seeing the development pipeline responding to huge demand that will secure ongoing growth. There’s currently a major undersupply of dwellings, and Australia is about to welcome a record 715,000 migrants over the coming two years, and Melbourne will receive many of them. Particularly at a time of flexible working arrangements, many people are favouring highly accessible inner-city locations with quality amenity to live, work, shop and play.”

“Inner-city Coles investment opportunities are extremely rare, let alone with this unrivalled level of trade growth potential.”

Liu said, “The resilience of essential services and daily needs retail have been demonstrated resoundingly over the past three years. The high-inflation environment is expected be short- lived and defensive, income-producing assets purchased now will prove to be very prudent investments”.

Coles recorded a 7% year-on-year increase in group sales revenue across its supermarkets in the March quarter, and 7.9% growth in gross supermarket retail sales to $8.874 billion.

Expressions of Interest in close Tuesday, 15th June at 3pm.