David Bonaddio, Real Estate Reporter
Melbourne’s sprawling retail car parks are being eyed as future housing sites as the state looks for more homes near shops, jobs and trains.
Bunnings-style stores, homemaker strips and shopping centre edges could eventually make room for apartments, but only where planning rules, retail needs and development costs stack up.
The fight is simple, Melbourne needs more homes, but shoppers, retailers and residents still expect parking close to the front door.
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Monash University urban planning and design senior lecturer Dr Liz Taylor said some big-box sites had “more car park than there is building”.
The push is no longer purely theoretical.
Victoria’s first 10 activity centre plans include Broadmeadows, Camberwell Junction, Chadstone, Epping, Frankston, Moorabbin, Niddrie, North Essendon, Preston and Ringwood, with the state aiming to deliver 60,000 new homes close to public transport, jobs and services.
A former Bunnings retail area in Preston has also been listed for assessment through the government’s Unlocking Strategic Sites pathway.
Sky Garden at The Glen in Glen Waverley has already delivered more than 500 apartments above the shopping centre, showing how retail land can accommodate housing.
Monash University urban planning and design senior lecturer Dr Liz Taylor says some large-format retail sites have “more car park than there is building”.
At The Glen in Glen Waverley, Sky Garden has already put more than 500 apartments and about 1500 residents directly above the shopping centre.
In Doncaster, a two-level, 11,000sq m Bunnings store sits below a Mercure hotel beside Westfield.
Dr Taylor said big-box retail car parks were shaped by planning rules and retailers wanting shoppers to find a convenient space.
“They’re certainly very large car parks,” she said.
“It’s partly the planning system and it’s partly the retailers themselves.
“When you’re trying to find a park, all you notice is, can I find one right out the front?
“So that’s the only time people usually think about the parking.”
The former Bunnings Doncaster site before redevelopment, when the prominent Doncaster Rd property was dominated by a low-rise big-box retail footprint.
Bunnings Doncaster after – for herald sun real estate
Dr Taylor’s 2014 paper, “Fight the towers! Or kiss your car park goodbye”, found carparking was a significant issue in 52 per cent of 325 Victorian planning appeals studied.
Nine in 10 of the appeals involving parking also involved third-party objectors.
Dr Taylor said the fiercest parking fights were often around infill housing in residential streets, where existing residents feared new homes would make it harder to park.
But she said large-format retail car parks were likely to face more scrutiny as housing pressure grew and shopping habits changed.
“We have, since the 1950s at least, had a regulatory focus on making sure that cars have places to fit,” she said.
“There’s more of a right to park the car than there is right to housing.”
The former Bunnings site at 372-394 Whitehorse Rd, Nunawading, is now occupied by Amart and sits within one of Melbourne’s major bulky-goods corridors.
Bunnings Oakleigh South occupies a former Masters site, with the large-format store and extensive surface carpark illustrating the scale of land used by big-box retail.
She said a single parking bay could take up about 20sq m to 25sq m, making parking a direct trade-off against other uses.
“Every couple of parking spaces you put in, required or otherwise, that literally translates as one less house,” Dr Taylor said.
“There is a direct trade-off between the priority we give to parking and the opportunity for housing that we have.”
Urbis retail sector lead Hamish McKnight says zoning is only part of the equation, with construction, labour and borrowing costs determining whether housing actually stacks up.
Urbis retail sector lead Hamish McKnight said the idea that large-format retail car parks were hiding housing potential was “probably a little simplistic”, but not wrong.
Mr McKnight said some large retail sites were already in zones where housing could be allowed, while others were on Commercial 2 Zone land where residential uses were generally prohibited.
He said sites would shift only when the market made higher-density development viable.
“Once you get to that threshold level of value, you’ll basically transition the land to development,” Mr McKnight said.
Highpoint Shopping Centre in Maribyrnong is among the major Melbourne retail precincts surrounded by substantial parking and commercial land being examined for longer-term intensification. Picture: Hamish Blair
Sunshine Marketplace is one of the centres identified by planners where surplus land around an existing shopping centre could potentially accommodate residential development.
But he said Victoria’s biggest housing constraint was not simply a lack of land.
“It really comes down to the market,” he said.
“The construction costs are really high, labour is really high and the cost to borrow the money to fund development is really high.”
Mr McKnight said building apartments directly above an operating shopping centre, as occurred at The Glen, could work but was one of the most expensive ways to deliver housing.
“The Glen is an example where it has been successful,” he said.
“Market conditions were quite different then.”
He said stronger opportunities were often likely to be around the edges of shopping centres or on surplus land, rather than through the middle of them.
Vanta Advisory business owner and ALBA Commercial partner Alex Groh says sophisticated buyers increasingly assess large-format retail sites for existing income and future redevelopment potential.
Vanta Advisory commercial buyer advocate Alex Groh said sophisticated buyers already looked at large-format retail sites for more than rent.
Mr Groh said they also considered what the land could become if a major tenant left.
“What’s the downside of this property?” Mr Groh said.
He said housing above or around big-box retail could be realistic in the right location, but apartment demand, zoning, access and site size had to line up.
Melbourne needs more homes near shops, jobs and trains, but some of its most familiar suburban sites are still designed around the car.
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