ALDI investment marks strong opportunity amid shift to value-led spending
A CBD-fringe supermarket investment backed by ALDI has hit the market in Melbourne, priced at upwards of $15 million.
The ground-floor supermarket at 512 Spencer Street, just 800 metres from the CBD, is supported by a 14-year lease to ALDI, with options extending to 2051. This provides the new owners with a strong tenant at a time when consumer behaviour is shifting toward price-driven spending.
“Supermarkets have firmly re‑established themselves as one of the most defensive and reliable retail investment classes,” said Colliers’ national director of retail middle markets, Tim McIntosh.
“We’re seeing a 33‑basis‑point yield compression compared to the 10‑year average, which is remarkable given broader economic uncertainty. ALDI West Melbourne is backed by one of the world’s strongest supermarket covenants, and assets like this – inner‑city, highly accessible, with long leases – rarely come to market.”
Unlike traditional full-line supermarkets, ALDI’s streamlined operating model and consistent price leadership have cemented its role as a key beneficiary of cost-of-living pressures, supporting stable foot traffic and trading performance across its network.
The offering also coincides with a sharp contraction in supermarket supply across Victoria. New development is forecast to fall 52 per cent below the state’s 10-year average in 2025, intensifying competition for existing assets and reinforcing the appeal of tightly held investments.
Located within The Market, a newly completed mixed-use development comprising 195 apartments, the 1595-square-metre supermarket also includes 62 secure basement car parks and benefits from residential customers. West Melbourne continues to grow with 2100 dwellings delivered in the past five years and a further 4000 in the pipeline.
The property also benefits from strong exposure along Spencer Street and proximity to major infrastructure projects, including the Metro Tunnel’s Arden Station, which is expected to further enhance accessibility and customer catchment.
Looking ahead, the combination of constrained supply and population growth is expected to continue to put upward pressure on supermarket performance. Victoria is projected to record the lowest supermarket development pipeline on the eastern seaboard through to 2030, while population growth of more than 16 per cent by 2035 is set to drive increased turnover across existing stores.
This makes assets aligned with value-driven retail a key focus for capital seeking both income security and long-term relevance.
ALDI West Melbourne is being offered through an expressions-of-interest campaign, which closes on May 13.
