The $1.5b housing opportunity at Westfield Hornsby
Westfield Hornsby on Sydney’s upper north shore could become home to as much as $1.5 billion worth of new apartments, or more than 2000 units, courtesy of the state government’s push to fast-track housing development.
The big boost at Hornsby, along with six other areas earmarked for rezoning across the city, provides a clear template for how vital higher-density housing can be made possible, according to Elliott Rusanow, chief executive of Scentre Group which owns and operates Westfield malls.
Rezoning land around major malls, which typically have strong transport connections in large cities such as Sydney and Melbourne, as well as in New Zealand where Scentre also operates, is the key.
“These substantial land holdings, when combined with their strategic locations, have the potential to be part of addressing the housing supply issues in both countries. We expect this will provide the group with significant long-term growth opportunities,” he said.
The shopping mall at Hornsby, owned and operated by the ASX-listed group, stands on more than six hectares of land. It is one of seven areas across Sydney that are being rezoned under the state’s transport-oriented development scheme, known as TOD.
Master plans for those areas were finalised a week ago, with the potential to provide almost 60,000 much-needed homes.
Of the land controlled by Scentre at Hornsby, the reforms would allow for multiple high-rise towers of up to 53 storeys each. Morgan Stanley analysts calculate that an uplift could yield 330,000 square metres of built space, up from 98,000 square metres currently.
That is the equivalent of 2300 new apartments. The development rights for that, according to the broker’s estimate, could generate $230 million if traded to a third-party developer.
With the median price for a two-bedroom apartment in Hornsby at about $700,000, the value of the potential development would surpass $1.5 billion.
Scentre has yet to decide how it will maximise that opportunity.
“We already own the land, which is a major advantage, co-located next to the infrastructure that people want to be near. And we are a company which has a huge capacity. It’s not new to us to be building this kind of stuff,” Mr Rusanow told AFR Weekend.
The NSW government has created master plans for six other transport hubs around Sydney: Bankstown, Bella Vista, Crows Nest, Homebush, Kellyville and Macquarie Park.
But Mr Rusanow said the potential uplift shown by the TOD applied to the Hornsby precinct means the concept could be extended more broadly. Scentre has 42 major malls, with 670 hectares of land holding.
“We’re not just a major landlord, we’re actually a major landholder,” he said.
“Densification, such as what can happen at our destinations, is actually a logical part of helping solve the supply issue with regards to housing.
“And that’s because our destinations are co-located next to already built infrastructure, or infrastructure that is planned to come, be it transport nodes, rail, light rail, bus, the Suburban Rail Loop [proposed in Melbourne] for example.”
He observed that population growth is being more efficiently housed not just by public infrastructure, but by private infrastructure “such as what we historically called shopping centres”.
“But they are now destinations housing hospitals, schools, allied health and a lot of housing already,” Mr Rusanow said.
