Amid shifting economic conditions and tightening capital markets, one segment of Australian commercial property continues to shine: supermarkets. Offering defensive, inflation-hedged income and exposure to essential household spending, they remain the go-to for investors chasing stability and scale.
The latest example to hit the market is Woolworths Mount Gambier, a full-line, high-performing, freestanding supermarket plus 3 shops that anchors South Australia’s second-largest city. The property, which has a net lease to Woolworths, is being brought to market by Stonebridge Property Group, with Expressions of Interest closing Wednesday, 17 November 2025.
A Supermarket Built for Performance
Purpose-designed for accessibility, the supermarket features five entry points, a direct-to-boot drive-through, and an oversized, shade-covered car park that minimises walking distances and maximises convenience.
Its island-site configuration ensures full main-road exposure with no competing buildings, cementing Woolworths as the dominant retail destination in the city.
The asset has paid percentage rent for six consecutive years, a clear indicator of strong turnover and robust trading above base rent thresholds.
Regional Reach and Long-Term Growth
While Mount Gambier’s population sits around 28,000, its trade area extends deep into the Limestone Coast and western Victoria, capturing a broad and loyal customer base.
As regional migration continues and infrastructure investment supports decentralisation, assets in major regional centres are attracting increasing investor attention.
“Mount Gambier is a regional powerhouse,” said Justin Dowers, National Partner of Stonebridge Property Group. “It benefits from both local loyalty and wider regional visitation — exactly the type of catchment depth that underpins supermarket success.”
A Defensive Play in an Evolving Market
Supermarkets have proven remarkably resilient across market cycles, with investors viewing them as defensive, inflation-protected assets.
Leases are typically structured with fixed annual increases or CPI-linked escalations, providing an inbuilt inflation hedge.
“Supermarket-anchored retail is outperforming because it sits at the intersection of essential spending and long- term income security,” said Philip Gartland, National Partner, Stonebridge Property Group. “Following our successful sales of Woolworths Maleny at a 5.12% yield and Woolworths Glenorie at 4.74%, we’re seeing ongoing demand from both private and institutional buyers for quality retail assets like Mount Gambier.”
Scarcity Driving Demand
With high construction costs and limited new supermarket developments, replacement cost has become a critical benchmark. Investors are recognising that established, high-performing supermarkets trading below replacement cost offer built-in value protection.
“New supply is constrained, and replacement costs are rising,” Dowers added. “That scarcity — combined with the strength of tenant covenants like Woolworths — is driving competition for well-located, standalone supermarkets.”
The Outlook
Supermarket yields have remained firm, even as other retail sectors have softened.
With inflation moderating, borrowing conditions improving, and consumer demand for essential goods holding strong, Stonebridge analysts expect investor appetite for supermarket-anchored retail to remain elevated well into 2026.
Stonebridge’s retail investments team — which has transacted over $4 billion in major retail assets nationally over the past five years — is managing the Expressions of Interest campaign for Woolworths Mount Gambier closing Wednesday, 17 November 2025 at 5pm AEDT (4:30pm ACDT).
For more information, visit www.stonebridge.com.au
Or contact the Stonebridge Property Group retail investments team.
1 As per audited figures to 30-Jun-25
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