Woolies Bids Big

Woolies Bids Big

The Lake Macquarie Reporter, based in Newcastle, New South Wales, filed a story on May 23 stating Woolworths had bid $20 million for a prime development site at Windale, trumping an offer from Bunnings by $6 million.

The vacant, eight-hectare site is on the Pacific Highway is currently owned by Lake Macquarie City Council. A confidential council report said the Woolworths offer exceeded the estimated current market value of the site and that the council would enter exclusive negotiations with Woolworths subsidiary, Hydrox Holdings. Hydrox is a joint venture between Woolworths and Lowe’s.

‘As a new entrant into the market, Hydrox will provide increased competition to the hardware-home improvement retail sector, which will have flow-on benefits to residents,’ the council report read.

As well as Bunnings, Woolworths beat Newcastle’s Nathan Tinkler-backed company Buildev, and BB Retail, which recently built a Warners Bay bulky goods project.

The newspaper report suggested the sale price would be reduced if part of the land cannot be developed and that the council would enter into a contract with Woolworths if council general manager Brian Bell accepted the final negotiated deal. If Mr Bell was not happy with the deal, the council would ‘enter into exclusive negotiations with Bunnings’, according to the council report.

When quizzed by AHJ, a Woolworths spokesperson confirmed that the story was “fairly accurate”. Bunnings Managing Director, John Gillam, responded by saying, “Bunnings has an extremely strong presence in the Newcastle region, which includes warehouse stores at Kotara, Glendale and Belmont. A further store is also planned for Wallsend.

“While we (Bunnings) continue to actively seek high quality sites as part of an ongoing network expansion strategy, our approach is extremely disciplined and every site needs to stack up on its own merits.”