Woolworths set to open ‘Food Quarter’ in Kiaora Lane precinct in Double Bay, preventing Harris Farm from moving in
WOOLWORTHS has won its fight to prevent natural grocer About Life from transferring its lease at the Kiaora Lane precinct in Double Bay to Harris Farm.
Wentworth Courier
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WOOLWORTHS has won its fight to prevent natural grocer About Life from transferring its lease at the Kiaora Lane precinct in Double Bay to Harris Farm Markets.
A judgement handed down in the Supreme Court of NSW has paved the way for the supermarket giant to pursue its plans to open a smaller retail offering such as a Woolworths Food Quarter on the site when About Life vacates the premises.
In May, Wentworth Courier revealed About Life was planning to close its Double Bay outlet to focus on its flagship store at Bondi Junction.
The natural grocer sold the store to Harris Farm for $10 million in April and agreed to transfer the 77-year lease as part of the sale.
But the plan hit a major roadblock when Woolworths, which developed the Kiaora Lane precinct in a $110 million joint venture with Woollahra Council, sued About Life and Harris Farm in the Supreme Court on the basis it was entitled to the first right of refusal over the lease.
On Thursday morning, Justice Arthur Emmett ruled in the supermarket giant’s favour, concluding it was entitled to an order restraining About Life from transferring the lease to Harris Farm unless it first offered the lease to Woolworths.
Woolworths is now expected to make an offer to take over the site, which is still occupied by About Life.
According to the judgement, Woolworths’ general manager of property management Matthew Franich said the supermarket giant was “content” to see About Life lease the space because it had dropped plans to build a Thomas Dux there and because of the “symbiotic relationship” that existed between Woolworths and About Life.
“Mr Franich said that, conversely, if the subject premises were occupied by a retailer that sells many of the same products that are sold by the Woolworths supermarket, as a typical Harris Farm store would, Woolworths would lose the benefit that the co-location with About Life brings to the supermarket, without obtaining any offsetting benefit,” the judgement said.
Mr Franich said Woolworths planned to establish “its own smaller innovative retail offering such as a Woolworths Food Quarter”, which would predominantly provide ready-to-eat meals in a similar fashion to About Life.
The site could also facilitate an expansion of Woolworths’ “Click & Collect” point for online shoppers and a Dan Murphy’s cellar business.
This would be in addition to its “flagship” supermarket at Kiaora Place which the company believes will be “one of the top two or three performing stores nationally for Woolworths within the next two or three years”.
The Judgement also states Harris Farm had no knowledge of Woolworths’ first right of refusal and that CEO Angus Harris was assured by About Life on two occasions there were no restrictions on the natural grocer selling its interest in the premises.
Justice Emmett dismissed Harris Farms’ allegations the supermarket giant had breached an “enforceable undertaking” with the Australian Competition and Consumer Commission to not enter into restrictive, anti-competitive leases.
A Woolworths spokeswoman said: “Woolworths welcomes today’s decision upholding its first right of refusal over the retail premises occupied by About Life Double Bay.”
About Life owner Tammie Phillips declined to comment.
Harris Farm was also contacted for comment.
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