[+] Developers Deliver Shop-Top Living to Hungry Market

Developers are clambering to secure tenancy agreements with luxury retailers among the growing number of shop-top developments under way in inner-city suburbs across the country.

In yet another post-Covid residential trend, owner-occupiers want convenience right on the doorstep, seeking out developments above high-end retailers.

Convenience-based apartment stock chalked up an average 16 per cent premium on prices, compared to suburb averages.

And developers are definitely delivering.

What is shop-top living?

Shop-top housing is defined as one or more dwellings above ground-floor retail premises or commercial premises. It offers an alternative to more traditional housing types and is favoured by some councils in a bid to cater for a growing residential footprint.

While there’s evidence a number of developers are delivering shop-top housing in inner-suburban areas of Brisbane, Sydney and Melbourne, the trend is also emerging in the regions.

Lismore City Council in northern NSW has been pushing for these developments to add to the vibrancy of the CBD and to renovate disused floor space above shops and offices.

In Queensland, gourmet grocery brand Harris Farm Markets has announced a deal with State Development Corporation’s (SDC) Aviary Toowong with plans to take up residency on the ground floor of the residential project.

▲ Harris Farm Markets in on board SDC’s Aviary Toowong residential project.

The ground floor will include a mix of retail, hospitality and entertainment options for the inner-western suburbs, coupled with a 20-level building and prime residential tower.

SDC managing director Ross McKinnon confirmed that other retailers in the development include cafes, restaurants, specialty shops and a state-of-the-art cinema complex.

A shop-top housing project has developer Thirdi joining forces with Coles Group to create the $180-million Balfour Place, a soon-to-be-released mixed-use development planned for the existing Coles supermarket site in Lindfield, on Sydney’s North Shore.

The DA-approved site was sold by Coles Group to the developers in 2020 after more than 50 years of trading on the site.

Strong supermarket yields underpinned by high transaction volumes, with data showing a 230 per cent year-on-year increase and $854.2 million in shopping centre deals recorded over the three months to the end of July, 2021.

Vicinity’s big play

Vicinity Centres confirmed that shop-top living is also a key investment focus. It has plans to transform Queensland’s Buranda Village into more than 600 residential apartments above commercial space across four buildings.

Vicinity is also revitalising Melbourne’s Box Hill to create new residential and retail development.

▲ Vicinity and Golden Age Group’s The Glen will have 50 speciality stores and more than 500 apartments.

In one of Victoria’s largest private urban regeneration projects, the vision is to transform 5.5ha into a mixed-use and retail precinct for more than 3800 residents by 2030.

Vicinity and Golden Age Group has delivered a $450-million, three-tower “above-mall” project in Melbourne’s south-east atop The Glen. The $430-million redevelopment includes 50 speciality stores and more than 500 apartments.

Vicinity chief executive Grant Kelley said the ambitious mixed-use project had a combined value of $1 billion.

“Our strategy takes advantage of our shopping centres’ great locations around Australia as more and more people seek to live in areas which satisfy a range of diverse lifestyle needs,” he says.

NSW-based developer Panthera Group is also on the bandwagon, paying $45.8-million for Sunland Group’s retail development precinct The Lanes in the Gold Coast suburb of Mermaid Waters.

The 12,500sq m shopping village will feature retail laneways interwoven with a fresh food market hall, cafes, restaurants, medical centre, office space, lifestyle entertainment, and a lakeside communal space.

Not all good news

But not all councils are in favour of shop-top developments.

Late last year, the Central Coast voted down a relatively modest shop-top housing plan on the foreshore of Ettalong.

▲ Panthera Group’s The Lanes on the Gold Coast.

The $5.4-million plan for 302-306 Ocean View Drive came to the Central Coast Local Planning Panel due to a number of objections over the height. Opponents voiced concerns that the quaint village feel of Ettalong was in danger if the development was approved.

The proposal, by KHMS Corp, was for the partial demolition of the existing commercial building on the corner of Ferry Road, removal of a house and the construction of a three-storey shop-top housing development with parking.

What buyers want

Whittaker Property Group’s Grant Whittaker says the trend toward shop-top living has been noticeable in Sydney, Melbourne and Brisbane in particular. He has other similar developments in the pipeline in Brisbane, saying that this new generation of buyer wants convenience and amenity.

“People are buying into these developments knowing that a supermarket is going in, which always fuels a lot of interest. There are buyers out there who want to live on top of a good supermarket,” Whittaker says.

Developers are listening to the market and playing the role of visionary when planning new developments, he says. An interesting retail experience focused on food and convenience is coveted by buyers keen on this type of lifestyle, he says.

▲ Vicinity’s Buranda Village redevelopment will include 600 apartments across four towers.

“For this to work, you have to have the right location and to appeal to the right demographics; often downsizers and up-and-coming professionals. You can’t just buy any site and say we’re going to put a supermarket down below and then residential above. It’s about striking the right balance,” he says.

“I know there’s other developers in Brisbane looking to capitalise on this trend, and are working on similar concepts at the moment.”

Retailers are bending over backwards to secure these locations, too, he says: “It’s a captive market—and can underwrite their business.”

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Article originally posted at: https://www.theurbandeveloper.com/articles/the-rise-of-shop-top-living