Woolworths and Coles streamline operations with $160m sale of neighbourhood centres

Woolworths and Coles, two of Australia’s largest supermarket chains, have recently offloaded $160 million worth of neighbourhood centres in separate deals. The move signals a shift in the companies’ business strategies as they seek to focus on their core retail operations and improve their bottom line. 

Woolworths Group, which operates the Woolworths and Countdown supermarket chains, sold 10 of its neighbourhood centres to property investment firm Charter Hall for $127 million. The centres are located in New South Wales, Victoria, and Queensland and include a mix of retail and commercial properties. 

Coles Group, meanwhile, has sold four of its neighbourhood centres to property fund manager Primewest for $33.7 million. The centres are located in Victoria and South Australia and include a mix of retail and medical properties. 

Both Woolworths and Coles have indicated that the sales are part of a broader strategy to focus on their core retail operations and streamline their businesses. By offloading non-core assets, the companies can free up capital and resources to invest in areas that are more closely aligned with their retail operations. 

For property investment firms like Charter Hall and Primewest, the acquisitions represent an opportunity to add high-quality assets to their portfolios. Neighbourhood centres are seen as a stable investment, with solid demand from both retailers and consumers. The centres offer a mix of convenience, accessibility, and a sense of community, making them attractive to both tenants and shoppers. 

Woolworths and Coles’ decision to offload $160 million worth of neighbourhood centres are a reflection of their strategy to focus on core retail operations and streamline their businesses. Supermarkets are seeking to adapt to these changes by investing in e-commerce, improving their in-store experience, and offering more specialized products and services. The move also highlights the challenges facing the retail sector in Australia, as companies seek to adapt to changing consumer habits and increasing competition.