Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

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"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

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After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

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The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

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Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

[smartcode_project:default project_id=4661 project_image_fid=314259]

Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

[smartcode_project:default project_id=4661 project_image_fid=372550]

Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

[smartcode_project:default project_id=102717 project_image_fid=355297]

The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

[smartcode_project:default project_id=102717 project_image_fid=355293]

The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

[smartcode_project:default project_id=5743 project_image_fid=925]

Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

[smartcode_project:default project_id=5743 project_image_fid=5374]

The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

[smartcode_project_cta:default project_id=5743]

The apartment price gap drawing Sydney buyers west

A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

Supermarkets

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A supermarket in the regional Victorian town of Stawell has sold for $5.11 million.
The <a href="https://www.realcommercial.com.au/property-retail-vic-stawell-502257578" target="_blank">126-130 Main Street</a>, Stawell property comprises a total trading area of 1,622 square metres and more than 100 onsite car parks.
The property is anchored by a new 15-year lease to Ritchies SUPA IGA.
It received eight offers during the sales process, according to CBRE’s selling agent Joseph Du Rieu.
Du Rieu, who brokered the sale with Kevin Tong and Justin Dowers, said the sale – reflecting an initial yield of 5.82% – is a sign of the strength of Victoria’s retail investment market.
“Although there have been well publicised concerns around the potential increased cost of debt in the coming months, this transaction highlights the strength of the current buyer market and is further evidence of investors taking a long term position on these supermarkets,” he said.
“We were blown away by the response for this property from the 90 plus buyers who enquired, particularly given the location in a township where the permanent population is less than 10,000 people.
“Given that yields of 5% have typically been reserved for supermarkets operated by Coles or Woolworths, we feel this is a very strong result and a sign of the current market environment.”
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j.ballantyne1990-6AQqhLzZaK

Stawell IGA supermarket sells for $5.11 million

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A private owner has placed his Woolworths and Big W anchored sub-regional retail centre in the Upper Hunter Region – Muswellbrook Marketplace – up for sale in a move calculated to take advantage of a strong retail investment market.
The single-level mall at 72-78 Brook Street is the single largest landholding in the regional city’s CBD. 
The mall comprises 12,838 sqm of building area on 1.65 hectares.
The Centre includes a Woolworths Supermarket, Big W DDS, three mini majors and 28 specialty stores, and offers an estimated fully leased net annual income of $2.99 million, according to listing agents Steven Lerche and Andrew Palmer of Savills.
The property will be sold by expressions of interest closing March 8.
Lerche said he expected strong interest from investors given the dearth of sub-regional shopping centre assets currently available and particularly those which could offer such significant value add potential. 
“Obviously, Muswellbrook Marketplace offers exceptional income security through Woolworths Limited and Big W et al, but it also offers investors significant scope to add value through a refurbishment and remix and that is going to be particularly attractive to investors in what is set to be a busy 2017,’’ Lerche said.   
According to Savills Research, investors spent $6.5 billion on retail assets nationally in 2016, including $1.94 billion in NSW, pushing yields in some instances below 5 percent.
Lerche said all indications were that demand for well-located assets with strong lease profiles, would be as strong or greater in 2017.
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jonathanchancellor-7SQnKwU6yx

Muswellbrook marketplace in Upper Hunter region hits the market    

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ALDI have secured a 1500 sqm store site on Sydney's affluent Lower North Shore in Bridgeport Shopping Centre in Mosman.
Set to open in May 2017, ALDI will now be able to fill a major gap in their network with their nearest stores being in Manly, North Sydney and Chatswood.
“ALDI will function as the major customer attraction on Level 1 of the centre – complementing the offer of Harris Farm and IGA on the ground floor," said Bob Walsh, Principal of centre managers and retail leasing agents Ray White Retail. 
“The addition of ALDI will reinforce Bridgepoint's position as the premier shopping centre on the Lower North Shore."
“Bridgepoint is already rated in the top six shopping centres nationally for sales per square metre for centres of this type,” he said.
Bridgepoint Shopping centre is 6800 sqm in size and, in addition to the three major food tenancies, has 35 specialty stores. 
It was acquired by a local property trust through Ray White Retail for $43 million in mid-2011.
The announcement comes as the centre embarks on a $10 million refurbishment that will involve the provision of new enlarged customer amenities, as well as a comprehensive aesthetic upgrade.
Most notably, a new large passenger lift will be installed that will link both retail levels with all car parking levels.
 
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Aldi set to open Mosman store

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<img src="https://counter.theconversation.edu.au/content/63317/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Supermarkets have moved quickly to capitalise on a growth of inner city dwellers with smaller houses but some retailers like Walmart, Tesco, Morrisons and even Woolworths are back peddling due to the risks.
With the rise of smaller one and two bedroom apartments with smaller kitchens and an abundance of restaurants, bistros and cafes that amass inner-city streets, consumers are accordingly purchasing groceries more frequently, up to three times per week and in smaller volumes.
Convenience store growth, online grocery sales and the aggressive expansion of discounters like Aldi, have progressively changed shopping behaviour, encouraging regular top-up shopping rather than weekly one-stop shops. As a result, the big four UK grocery retailers now run more convenience stores like Tesco Express, Tesco Metro, Sainsbury’s Local and M Local, than full-line supermarkets. Woolworths have also dipped their toe cautiously into the convenience market.
<h2>The challenge of convenience</h2>
While the convenience market proposes opportunities for large supermarkets, it also presents risks. The attractiveness of lower build, fit out and leasing costs associated with opening smaller store formats, is weighed against less space and accordingly, less range. Misreading the needs of the local market and getting that range wrong, will negatively impact on sales.
The costs associated with running convenience are significantly higher than large format supermarkets. Wage costs in convenience stores can hover above 13 percent, whereas a full-line supermarket can run on less 9% wages to sales. Waste, shrinkage and other operating expenses are inflated as a result of lower sales.
Competition is ferocious. While a supermarket may compete with another neighbouring supermarket, supermarket run convenience stores may find themselves in direct competition with local delicatessens, bakeries, butcheries, news agencies, all vying for the best locations and customers’ dollar.
<h2>Eating themselves alive</h2>
There are no switching costs in grocery retailing and shoppers today are not mortgaged to any food retailer. This lack of shopper loyalty has driven UK supermarkets to ultimately cannibalise their own sales by rushing to open smaller format stores.
By opening convenience stores on high streets, transit hubs and inner-city areas, the supermarkets have encouraged consumers to shop more frequently for groceries, rather than doing the one big weekly shop.
Today, shoppers now pop into the convenience store to purchase their evening meal on the way home from work, shop in a supermarket for non-perishable foods and then drop into a discounter like Aldi for a bargains. While a move into convenience and smaller store formats make sense, supermarkets should be aware of the risks ever present.
<h2>Abandoning the small store strategy</h2>
In response to an aggressive rollout of small format stores and the protracted price wars, Tesco announced it would review its fleet of stores. It closed 43, 18 of which were Tesco Express convenience stores and 12 smaller Tesco Metro urban stores. Similarly, UK grocery chain Morrisons also moved to closed around 10 convenience stores.
In the US, Walmart announced the closure [over 100 Walmart Express stores] [https://blog.walmart.com/business/20160115/doug-mcmillon-answers-questions-about-sharpened-focus-on-stores], citing a return to the big retail store format.
Here in Australia, four Woolworths metro stores are targeted for closure with the renewal of leases of a further five stores in jeopardy.
It appears Woolworths CEO Brad Banducci has taken a leaf out of the play bookof Morrisons' Chairman Andy Higginson’s , who said he now wants Morrisons to focus on its supermarkets. Banducci’s briefing to the market illustrated a returned focus on Woolworths’ core business of supermarkets and liquor.
The strategy involved slashing ranges of tiered private label products, closing under performing stores, [increasing productivity and cutting costs.] [https://www.smh.com.au/business/retail/woolworths-ceo-brad-banducci-unveils-growth-aspirations-20160606-gpctce.html]. It’s a smart strategy indeed that will lead to a leaner, meaner, agile Woolworths in the years ahead.
Gary Mortimer is associate professor, Queensland University of Technology and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/gary-mortimer-1322" target="_blank">here</a>.
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Big retailers are realising the risk of moving into convenience stores

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Coles has placed its newly developed Coburg North Village shopping centre — anchored by a flagship Coles Supermarket — in Melbourne, on the market through Savills.
The 6,283 square metre GLA centre, on the corner of Gaffney and Sussex streets, will by sold by expressions of interest closing July 13.
The deal includes a new 15-year lease to Coles and Liquorland with the property earning an estimated $1.9 million per annum.
According to marketing agents Pat De Maria, Tom Forrest and Steven Lerche, the complex is expected to attract strong local and off-shore interest due to the appeal of retail investments.
Retail property transactions are currently running at $7 billion to $8 billion a year, bolstered by off-shore and institutional investors and compressed yields, according to Savills’ research. 
“The limited availability to purchase quality retail investments, and the high level of investment demand has intensified competition for available assets,’’ De Maria said.
The centre opened in August 2015 and has a flagship full-line ‘market style’ Coles Supermarket and Liquorland of 4,175 square metres. 
There are 15 other retailers, including a medical centre and pharmacy.
Forrest said the centre benefitted from a large main trade area accommodating more than 46,000 residents and was forecast to grow to 52,050 by 2026.
 
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Coles puts flagship Coburg North Village in Melbourne on market

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GUEST OBSERVER
It’s reporting season, and over the past few weeks some of Australia’s biggest companies have been releasing information on how they’re travelling.
These reports reflect key themes of how things are going in key sectors of the economy. Over coming days we’re going to report on the results a handful of major companies in key sectors, transport, construction, retail, mining, insurance and banking. Today we look at the retail sector.
Dominant retail giants Wesfarmers - owner of Coles supermarkets - and Woolworths hold a 70 percent of market share of Australia’s fresh food grocery market, but have had contrasting fortunes over the past few years. Half-year results for Wesfarmers and Woolworths for 2016 show very different outlooks.
 
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<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/113819/width754/image-20160304-9463-1cuzyw1.png" alt=""><a class="license" href="https://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a>
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Meanwhile, the major retail players are continuing to feel the disruptive impact of smaller players such as Aldi and highly competitive market conditions; both will have employ new strategies away from the tried and true defensiveness that has worked in the past.
Wesfarmers reported a net profit after tax of $1.4 billion, up 1.2% since the same time last year, while Woolworths reported a net loss of $973 million after a profit of $1.3 billion. Over the last few years Coles has seen stronger sales growth and comparatively better market share.
By contrast, Woolworth’s strategy problems with its home improvement business, Masters, has been widely ventilated. The company attributed $1.8 billion loss to the costs related to its exit from Masters.
Woolworths' underlying profit was $925 million, still down 33 percent on prior year. Woolworths would hope that its exit from the ultimately costly Masters endeavour will serve as a boost to investor confidence.
Woolworths has also struggled with branding and has seen advertising agency changes over the last few years the most recent being the dropping of Leo Burnett and a return to M&amp;C Saatachi.
Perhaps more revealing to the outlook of the industry are some of the underlying similarities in strategy. Both Woolworths and Wesfarmers emphasised price deflation, cost reduction and further price cutting, as key strategies.
The companies expect highly competitive market conditions and consumers to remain price sensitive, and will largely focus on improving supply chain productivity, through cost reduction. Woolworths is reducing its spending on activities such as marketing, property acquisition and rent as part of $500 million in cost savings during the 2016 financial year (July 2015 to July 2016).
Likewise, Wesfarmers has highlighted similar measures, with cost cutting objectives, the company hopes will allow them to lower their prices in the supermarket even further.
In an industry where profit margins are already low, such intense competition would carry significant risk. If sales don’t meet expectations, the retailers have little room to lower prices when margins are low. As a consequence, covering fixed costs like maintenance and rent of stores becomes increasingly difficult and the likelihood of making a loss is higher.
To some extent these price wars reflect the two retail giants directly competing against each other, but another factor is the disruption caused by new entrant Aldi. The supermarket chain has gained 11% of the market since it came onto the scene in 2002, using its streamlined, low cost supply chain to undercut Woolworths and Wesfarmers on price.
Aldi is a unique player in this space. In the past Coles and Woolworths could exercise their market share and size to squeeze out small producers; but Aldi is a different beast, a global company with a presence in both Europe and the USA.
Aldi may not even be the biggest problem facing the locals, if reports that European retailers such as German retailer LIDL are sizing up the Australian market prove true. LIDL is the fourth biggest retailer in the world, with $128 billion in annual sales. Whatever hold true for Aldi is doubly true for LIDL. Other hypotheticals floated around Danish discounter Netto and UK grovery giant, Tesco.
The traditional defensive strategy against competitors employed by the Aussie giants relies on economies of scale, being larger than your rival and being able leverage this efficiency to deliver a cheaper end product or more controversially to loss lead and force your opponent out of business maintain your market share and eventually maximise your profit.
Woolworths and Coles are falling back on their old ways to try and beat Aldi, the companies' corporate strategy for the most part is focused on a doubling down on the traditional squeeze out all newcomers approach. However Aldi brings global resources to the table that Woolworths and Coles don’t have access to.
In the retail sector Aldi will continue to steal market share from Wesfarmers and Woolworths more so if the companies continue with old strategies and don’t think of a way to innovate the retail space.
 
Shumi Akhtar is senior lecturer, University of Sydney, and can be contacted <a href="https://theconversation.com/profiles/shumi-akhtar-228494" target="_blank">here</a>.
Farida Akhtar is lecturer, Curtin Business School, Curtin University, and can be contacted <a href="https://theconversation.com/profiles/farida-akhtar-228499" target="_blank">here</a>.
Both are authors for The Conversation.
 
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Big retailers feel the pressure of the new challengers

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SUPA IGA Doonside, a freestanding supermarket in an established suburb west of Sydney's Blacktown, has sold for $14,750,000 via an expressions of interest campaign.
A private investor bought the property on an initial yield of 6.1 percent, said selling agents Steven Lerche and Pat De Maria of Savills.
“The opportunity to secure a supermarket with both a net lease structure and built in rental growth is a rare prospect and therefore resulted in overwhelming interest from local, interstate and overseas investors," Lerche said.
The property has a gross leasable area of 4,402.3 square metres and is 100 percent leased to a wholly owned subsidiary of ASX-listed Metcash Limited, expiring in 2024 with a 10-year option. There are an additional four internal sub-lease tenancies. 
The centre sits on a site area of 15,300 square metres with on grade parking for about 224 vehicles.
Its location also allows for future redevelopment due to its B2 Local Centre Zoning allowing for a multitude of uses subject to council approval.
The Doonside suburb is 40 km west of Sydney’s CBD.
The centre is close to the junction of the M4 Western Motorway and the M7 Westlink. 
“The infrastructure planned for the Greater Western Sydney Region will result in a windfall for Doonside. With the release of designated development land throughout the North West corridor it will allow for further business and housing to be built for the area surrounding Doonside,” added Lerche.
Across the country, offers are due today on a fully leased neighbourhood shopping centre in Swan View that comes with an IGA store.
It is the first neighbourhood shopping centre to head to market this year, and includes a centre anchored by as 1204sq m IGA Supermarket, a Caltex Service Station, 10 specialty retail shops and four ATMs. 
The IGA Supermarket is on a 20-year lease, not expiring until 2028, and the total estimated net income exceeds $1.1 million per annum.
It is listed through Colliers International and Savills.
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Private investor snaps up SUPA IGA in Doonside for $14.75 million

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GUEST OBSERVER
For 25 years, Woolworths told shoppers they were “the fresh food people”. It was a very clear point of difference and delivered the group a sustainable competitive advantage. Any attempt by a competitor to replicate it would have been dismissed as lacking credence; a simple market-follower strategy.
In contrast, Coles appeared lost and without direction, the result of an ever-changing senior leadership team, until Ian McLeod arrived in 2008. Prior to 2000, Coles was “serving us better”, then in 2002 shoppers were “saving everyday”. In 2004, Coles was “delighting their customer” and then things were getting a “little better … every day”. Finally, the more recent “down, down” campaign has aligned with its “quality food costs less at Coles” slogan, cutting through with shoppers.
Somewhere along the way Woolworths was blindsided. The group fell out of favour with suppliers and was distracted by its troubled Masters hardware chain. The turnaround plan suffered a further blow with the news chief executive Grant O'Brien would step down after less than four years in the job.
<h2>Lack of differentiation</h2>
At the same time Coles was closing underperforming stores, <a href="">cutting its range</a> to streamline supply chains, cutting overhead costs and investing heavily in store refurbishments.
The fastest, although not the smartest, way to compete with an aggressive competitor is to replicate; that’s exactly what Woolworths and more recently IGA did. A quick look at Coles', Woolworths' and IGA’s catalogues and stores today illustrates the same deep discounting strategy.
It was clearly an error of judgement for Woolworths to move away from its very successful “fresh food people” position. The “cheap, cheap” campaign confused loyal shoppers and played into the hands of Coles, which was better positioned to deliver on price. With both majors driving a message of “price”, more shoppers also started trailing the German discounter Aldi.
<h2>The lowest price doesn’t necessarily win</h2>
If you are not a discounter, move away from price. While most supermarkets will carry a range of low-priced, generic private-label products to service the discount-shopper segment, sending the message that you sell groceries “cheap, cheap” and “down, down” every day is risky.
Even Metcash-owned IGA has moved away from its “local” campaign to now promote itself as “the same” as the big two with a recently launched “price match” campaign. Price is easily comparable and replicated, and this has been played out across Australian supermarkets over the last few years.
Internationally, grocery discounters like Lidl and Aldi continue to take market share away from the major full-line supermarkets, while the supermarkets continue to discount heavily. The practice of deep, unsustainable and potentially unprofitable deep discounting has even begun to attract criticism for grocers.
However, while Australian supermarkets and independent grocers continue to focus on price, shoppers will continue to shop between all brands for the lowest; loyalty is lost. This is most evident with Aldi, which in Australia has the lowest customer loyalty at 7%, compared to the majors at 25% and IGA at 30%. Supermarket retailing in Australia has become a race to the bottom.
<h2>Fresh – the future fight</h2>
Discounters will always win on price. The smart approach to combating this threat is not to position yourself as the same, but different. A focus on what the discounters don’t offer – such as range, value, service and fresh foods – is a much smarter approach.
The price of a litre of milk or a loaf of bread is easily comparable, whereas “fresh” is not. The fresh food component of a supermarket also delivers more profit than dry groceries. Fresh is where the next battle will be fought and won.
Now that Coles has established its position as the provider of low-priced groceries, its next move will be to focus on the “fresh food” space now vacated by Woolworths, which still appears to be cutting prices.
<h2>The future of convenience</h2>
When shoppers have been conditioned to think about the price they pay each week for a basket of groceries, the franchised grocer model no longer works. Already, experts have suggested that within 10 years Metcash’s independent grocers will no longer feature in the Australian grocery market.
Yet overseas the convenience store model is growing faster than full-line supermarkets. While some of this growth comes from the ability to embed small store footprints into high streets and high-density areas, much of it is the result of major supermarkets moving into this space with their brands: Tesco Metro, Tesco Express, Sainsbury’s Local and Carrefour Metro.
With Roy Morgan’s latest shopper loyalty research illustrating IGA has the most committed shoppers, even with perceived higher prices, IGA would be best to walk away from a price war. If IGA is unable to defend against the growth of Aldi and a re-energised Coles and Woolworths, it is highly probable it will either exit the market or reposition itself upmarket as a premium grocer.
Either way, it is likely that both Woolworths and Coles will look favourably at moving into this space with a chain of Woolworths Metro or Coles Express convenience stores.
Gary Mortimer is senior lecturer, QUT Business School, Queensland University of Technology and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/gary-mortimer-1322" target="_blank">here</a>.
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