Investor confidence in the NSW freestanding retail market is showing signs of renewed strength, evidenced by recent transactions in tightly held Sydney metropolitan and dominant regional locations – brokered by Stonebridge Property Group.
Average national yields for retail investments between $10 million and $30 million sit at 6.31% for FY25, reflecting a 38-basis point softening year-on-year. However, the return of sub-5% yields on recent transactions marks a pivotal shift in the market, with the falling interest rate environment further supporting a positive outlook heading into FY26.
As private investors seek a dwindling supply of safe-haven assets, record yields and lower interest rates, are signalling a positive market shift not seen since the heady days of the post-pandemic era.
In a standout off-market transaction, Woolworths Glenorie sold for $19 million, reflecting a 4.74% yield – the tightest recorded for an NSW supermarket since 2022.
The 3,674 sqm freestanding supermarket, positioned on a substantial 1.8-hectare landholding with 185 car parks, is underpinned by a rare 20-year lease to Woolworths to 2031, with options extending to 2072.
Originally developed and held by Woolworths since 2011, the sale reflects continued demand from investors for long-term income and growth potential, with store sales reportedly approaching the turnover rent threshold.
The Woolworths Glenorie transaction is the latest in a string of freestanding retail transactions, across Sydney and regional NSW. Woolworths Metro West Pennants Hills transacted to a private investor for the sharpest strata supermarket yield since 2022.
The campaign generated 244 enquiries predominantly from private investors, eager to secure one of the rare blue-chip supermarket assets for sale.
Regionally, Myer Dubbo also transacted – the freestanding department store sold via an on-market campaign. The sale of the Myer store marked the largest CBD retail deal in Dubbo in recent years, with the property positioned prominently on Macquarie Street with over sixty metres of retail frontage. The asset is secured by a lease to ASX-Listed Myer highlighting the strength of covenant in this dominant regional centre.
“These sales collectively reflect the growing strength of NSW’s freestanding retail market, with investor appetite returning to high-quality, securely leased assets in both metropolitan and regional locations” said Phillip Gartland, National Partner, Stonebridge Property Group.
Outside of NSW, freestanding retail investments also continue to trade aggressively, with a Woolworths in the popular Sunshine Coast hinterland town of Maleny trading for $13,750,000, reflecting a sharp 5.12% yield. This asset comprised a 2,038 sqm supermarket on a site of 5,225 sqm with 109 on-site car parks. The property sold unconditionally almost immediately following the EOI campaign.
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