Woolworths Sues for Over $70 Million Over Compulsory Acquisition for Suburban Rail Loop
Woolworths has initiated legal proceedings against the Suburban Rail Loop Authority (SRLA) in the Victorian Supreme Court, seeking over $70 million in compensation for the compulsory acquisition of its warehouse facility in Notting Hill, Melbourne.
The Two-Pronged Legal Claim
The legal action comprises two distinct claims:
- Fabcot Pty Ltd, Woolworths' property development arm and the owner of the land, is seeking $40.7 million for the property itself.
- Woolworths is separately claiming $29.6 million for commercial losses and costs incurred as a direct result of the acquisition.
Failed Negotiations Over Compensation
The SRLA first notified Woolworths in 2023 that the land would be compulsorily acquired for the Suburban Rail Loop East project. Woolworths was required to vacate the warehouse by February 2024. Despite months of talks, the parties failed to reach a settlement.
- July 2023: SRLA made an initial offer of $35.2 million. Fabcot rejected this offer in November 2023, countering with its own valuation of $40.7 million.
- February 2024: SRLA revised its offer downward to $32.1 million, which Woolworths rejected in April 2024.
- On the commercial losses claim, SRLA offered just $60,000 in February 2024. Woolworths rejected this offer in April 2024.
The Site and Its Impact on Operations
The acquired site, located on Howleys Road in Clayton, contained two freestanding warehouses. One warehouse was actively used as an online customer fulfilment centre for Woolworths' supermarket operations. The other had become vacant after a third-party tenant departed upon learning of the impending acquisition.
The Broader Project
The Suburban Rail Loop is a massive, $35.4 billion infrastructure project. It involves constructing a 60-kilometre underground railway tunnel between Box Hill and Cheltenham, with the acquired land slated for the new underground Monash station.
Responses from the Parties
Woolworths declined to comment, stating that the matter is before the courts.
An SRLA spokesperson said the land was acquired to build the new underground Monash station and that compensation was paid as determined by the valuer general.