‘Shop-top’ apartments – a highly desirable form of housing in large Asian metropolis from Tokyo to Hong Kong, Singapore and Bangkok – will soon be a common sight in major Australian cities.
Triggered by a housing shortage - and aided by government incentives - building atop of shopping malls is emerging as a viable commercial proposition.
And it has already opened the doors for large Australian shopping centre owners to think about branching into build-to-rent (BTR) while monetising their surplus land surrounding their shopping malls.
Even without government imprimatur, Australian large retail asset owners – especially the listed Vicinity Centres and Scentre Group - have been exploring better and higher uses of their surplus land and air rights above their sprawling shopping malls.
The Westfield Group, the forerunner of Scentre, made its foray into residential development in 2017 partnering Greystar to build and manage a 300-apartment tower in San Diego California, indicating it would be a prelude to other residential developments in the US and UK.
Since then, the Australian arm of the group which was renamed Scentre, has revisited the strategy. At its February earnings call, the shopping centre owner told analysts that it has obtained approvals for 4,100 dwellings to be built at three shopping centres – two in Sydney and one in Woden, on the outskirts of Canberra.
Group CEO Elliott Rusanow told analysts that the group had lodged planning proposals at a further six Westfield destinations with the potential to deliver 16,100 dwellings.
The group holds more than 670ha of land, close to major transport hubs and where millions of people live and work, attached to its 37 shopping malls in Australia and 5 in New Zealand.
Vicinity Centres, is similarly seeking planning approval for more than 6,000 apartments earmarked for four prime shopping malls. Its largest project will have seven towers offering 1,700 apartments in total at its Box Hill shopping centre, in suburb Melbourne.
Vicinity owns 52 shopping centres at June 2025. It tested the concept when it sold the air rights of one of its centres, The Glen, in Melbourne to Chinese developer, The Golden Age to build apartments for sale.
While some projects will likely be built-to-sell, both Scentre and Vicinity are looking for capital partners to bankroll a BTR platform.
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