Costco Expands in Victoria with Fifth Store by 2027

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Bulk retailer Costco has announced plans to open its fifth store in Victoria by 2027, continuing its national expansion backed by strong profits and growing membership. The latest site is planned for Pakenham, in Melbourne’s fast-growing south-east corridor, on a large allotment within a new logistics centre developed by Brookfield Properties.

“When deciding on new warehouse locations, the focus is to find lots close to our members that are large enough to house our full range of goods, specialty services, fuel stations, and car parks,” said Chris Tingman, country manager at Costco Australia.

Costco operates 15 warehouses nationwide, following its first Australian store in Melbourne’s Docklands in 2009. Membership fees range from $65 to $130 annually, depending on the plan.

The rollout is supported by impressive financial performance. In the year to September 2024, Costco Australia, which also manages operations in Taiwan, reported $11.37 billion in revenue and $279 million in profit, a 46% increase from the previous year. The company paid a $205 million dividend to its parent entity.

Tingman added, “Our Pakenham warehouse will offer members exclusive access to brand-name merchandise at competitive prices, along with warehouse services such as a fuel station. We aim to be a valued part of the local community by creating jobs, delivering an exceptional retail experience, and providing a competitive offering of goods, services, and fuel.”

The Pakenham site forms part of the Cardinia Logistics Estate, spanning over 185,000 square metres across two properties purchased by Brookfield in 2022 for approximately $45 million and $49 million. Industrial land in the area trades between $550-$650 per square metre, making the Costco site potentially valued at $34-$40 million.

The logistics estate will be developed in four stages, with stage one set for completion in Q4 2025. Brookfield manages more than 480 logistics warehouses and distribution centres across 14 countries, and views Costco’s arrival as a commercial catalyst for the area.

“This transaction supports our development of the remainder of the Cardinia Logistics Estate and will enhance leasing enquiries,” said Danny Poljak, co-head of Brookfield Real Estate Australia.

Property consultants from JLL and Colliers have been appointed to manage leases for the remaining sites. Colliers’ Gordon Code noted rising leasing interest, saying, “The Costco deal will help the area, boost amenities, and drive further commercial activity.”

With strong sales, steady membership growth, and strategic expansion, Costco’s continued investment in Victoria highlights both its confidence in the Australian market and the potential of Melbourne’s south-east corridor as a major retail and logistics hub.