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hopping centre landlords are again turning to the residential market to bolster returns from their projects with several major companies planning apartment towers above or around their developments.
The improving residential market has made such projects attractive after a period in which they either offered a break-even to developers or were a burden to their plans.
AMP Capital is set to become the latest to get in on the trend with residential group Blackburne to develop 94 high-end apartments on the east side of Perth’s Karrinyup Shopping Centre, which is undergoing an $800 million development.
The listed Vicinity Centres is already pursuing this course, flagging it will undertake more mixed-use developments at its key centres, including Melbourne’s Box Hill and potentially Sydney’s Bankstown.
The retail landlord earlier this month kicked off the $450m three-tower luxury residential address Sky Garden on top of The Glen in Melbourne.
Vicinity Centres sold the air rights above the mall to Chinese-backed developer Golden Age Group which is developing the 555-unit residential complex.
Sector leader, Scentre, the owner of Westfield malls across Australasia, has also flagged some residential projects at its sites, including at Sydney’s Hurstville where it promoted plans for six towers of up to 20 storeys.
The Karrinyup project will have one-, two- and three-bedroom apartments and penthouses, adding to the 109,000sq m of premium retail, food and entertainment space.
AMP Capital WA divisional development manager shopping centres, Scott Nugent, said mixed-use development was a trend that was being embraced both locally and nationally.
“By combining shopping, dining, entertainment and living, we’ll be creating a lively community hub where people can meet, relax, shop, dine or enjoy unique experiences close to their own home,” he said.
Blackburne managing director Paul Blackburne said the project presented a unique opportunity to create larger, higher-end residences in a premium location.
“Located on the east side of Karrinyup Shopping Centre, the elevated site provides incredible views over Lake Gwelup, surrounding parklands and the city skyline,” he said.
Longer term, AMP Capital is also planning a $1 billion redevelopment of Sydney’s Macquarie Centre with about 1000 new apartments in four tower blocks on the drawing board.
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