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Supermarkets, churches, fast food outlets: Sydney’s unexpected property developers

Whether you are selling groceries, making hamburgers or spreading religion, the booming real estate market is allowing property owners to reap profits by building apartment towers.

McDonald’s has joined local councils, churches, RSL clubs and supermarkets in the growing list of unlikely property developers who have discovered that their lucrative properties are worth even more with tall towers.

McDonald’s wants to build a residential tower on the site of its outlet in the Parramatta CBD.

McDonald’s wants to build a residential tower on the site of its outlet in the Parramatta CBD.Credit:

The fast food giant wants to build a residential tower with property developer Stockland on the site of its outlet in the Parramatta CBD. But its plans have been stalled over the provision of parking and drive-through facilities.

Stockland’s executive general manager of apartments, Ben Christie, said the developer was working with McDonald’s and the City of Parramatta “to create and curate a community that includes apartments within a mixed-use precinct”.

Committee for Sydney planning policy manager Estelle Grech welcomed the fast food giant’s move into residential development.

“The McDonald’s in question is located on the doorstep of the new light rail, directly across from a park, and a very short walk to the bustling Parramatta city centre,” she said. “We need more housing built in great spots like this.”

Fulfilling NSW Premier Chris Minns’ aim for Sydney to “go up” rather than increase urban sprawl also requires more creativity around site selection, Grech said.

An artist’s impression of Woolworths’ mixed-use residential development in Neutral Bay.

An artist’s impression of Woolworths’ mixed-use residential development in Neutral Bay.Credit: Woolworths

“If existing landowners like churches, supermarkets, RSL clubs and even food businesses like McDonald’s are in a position to redevelop well-located sites, why not partner with developers to deliver much-needed homes?”

The political focus on the housing crisis has also prompted businesses such as Woolworths to enter the residential market, said Property Council of Australia’s NSW executive director, Katie Stevenson.

“It’s a trend we expect to see continue in the years ahead as more businesses diversify in response to the clear policy signals from the prime minister and the NSW government on the importance of increasing housing supply and affordability,” Stevenson said.

Woolworths plans to build apartments with supermarkets in Sydney, Melbourne and Brisbane. Its director of property development, Andrew Loveday, says this “reflects an urban trend of higher density in metropolitan locations”.

Club Bondi Junction RSL, Club Willoughby and The Cyprus Club in Stanmore are among dozens of registered clubs that also have plans, some under way, for residential developments incorporating new club facilities.

A ClubsNSW spokesman said that registered clubs “are well positioned to assist” in addressing the state’s housing crisis.

“Clubs, particularly those near rail and metro stations, are exploring ways they can meet community needs for housing,” the spokesman said. “Importantly, any plans for residential development of club-owned assets must go through a process of approval by club members and then relevant planning authorities.”

Churches have also sought to cash in on vast real estate holdings by redeveloping property into offices and apartments.

The Anglican church in Bankstown is facing possible heritage protection, which would put future developent in jeopardy.

The Anglican church in Bankstown is facing possible heritage protection, which would put future developent in jeopardy.Credit: Dean Sewell

A residential development proposed by the Seventh-day Adventist Church in Wahroonga and the Anglican Church’s fight to stop the heritage listing of a Bankstown church have both provoked opposition from residents and church members.

Racecourses and golf courses occupying inner-city real estate are other prime targets for redevelopment – especially since they can easily relocate to lower-cost locations on the edge of cities, said Colliers’ national director for build-to-rent, Robert Papaleo.

The Melbourne Racing Club wants to stop horse-racing at Sandown, rezone it for housing and sell the land to fund redevelopment at its Caulfield racetrack.

Sydney’s former home of harness racing, Harold Park Paceway in Forest Lodge, held its last race in 2010 and was turned into a residential development.

Knight Frank director and head of investment sales for North Sydney, Mark Litwin, said he expected more retailers to become developers.

“As Sydney continues to increase in density, more of these sites will be rezoned, which will then allow for greater development potential and profits to be made,” he said.


“A well-established brand to anchor the retail component of a mixed-use development can help to secure development approval from council and helps the developer to secure a good position for their apartment building, which will help with sales.

“For the retailer, the apartment component gives them a ready-made customer base.”

Sydney’s rapid transformation and increasing population density meant it made sense for retailers such as Woolworths to make the most of their sites.

“Property development isn’t necessarily more lucrative than selling fries, but developing their sites to the highest and best use makes sense as it will unlock the value,” Litwin said.

But there is more responsibility with owning a site as opposed to leasing, he said, including knowing how to develop a property “to unlock the greatest profits and maintain the site”.

“But with ownership comes the reward of profits – if the development is done well – and the ability to take control of the density upside or rezoning led by the government.”

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