Woolworths pivots into large mixed-use development projects

Major supermarkets traditionally lease sites, but they are now opting to own some property to give them flexibility and control over the developments.

The Waterloo project is one of the first in Sydney and complements the plans for similar projects it has under way in Elsternwick and Glen Iris, Melbourne. In Perth, Woolworths recently received approval to push ahead with a mixed-use project in Scarborough.

The group is also looking at a mixed-use development proposal for its landholdings near the flagship supermarket in Neutral Bay in Sydney’s lower north shore. The proposal is still in concept form, pending planning approvals. It has plans for a site in nearby Mosman, which are still in the early stage.

Woolworths is a $50.5 billion ASX-listed supermarket operator and has a property portfolio comprising large-scale distribution centres, warehouses and now mixed-use developments. In June, it spun off its Endeavour pubs and drinks division.

Woolworths’s head of mixed-use development, Pierre Abrahamse, said the group’s vision was to create a vibrant, well-connected and contemporary development, “which integrates seamlessly with the broader Waterloo and south Sydney precincts”.

“We believe our plans align with the City of Sydney’s broader vision to reinvigorate and transform the south Sydney area while delivering much-needed shopping and community benefits for residents,” Mr Abrahamse said.

Known as the “Bourke & Young” mixed-use development at 923-935 Bourke Street, the site will focus on offering sustainability and innovation in its design.

Woolworths’s proposal includes a new market-style full-line supermarket supported by basement car parking and “direct to boot” facilities as part of new post-COVID-19 contactless shopping practices.

Sydney architects Bates Smart have been commissioned to prepare two different concept plans for the site and a community consultation process will commence shortly. If approved, it will create 250 jobs during construction as well as about 290 ongoing retail jobs once complete.

The project will also have a percentage of the residential component dedicated to affordable housing for key workers in the area.

There will be an array of convenient specialty retail shops, commercial and community space and a mix of 1, 2 and 3-bedroom apartments, along with an open public plaza with pedestrian connections from Bourke Street through to Young Street.

The projects will be developed with a builder but the ownership of the land gives Woolworths the flexibility in the size and planning of the anchor supermarket.

Gabriel Metcalf, chief executive of the Committee for Sydney, said the proposal was in line with the committee’s plans for much-needed housing that is close to public transport, with a proper supermarket where residents can pick up the groceries within a short walk.

“We look forward to seeing the concept plans,” Mr Metcalfe said.

Mr Abrahamse said Woolworths’s development plans would contribute positively to Waterloo and the surrounding precincts, creating convenient retail options and high-quality commercial and community spaces.

“We’re confident we can deliver a vibrant mixed-use development that supports the City of Sydney’s revitalisation of the area utilising innovative and sustainable design to create a great place to live, work, shop and visit,” he said.