From Shopping Centres to Mixed-Use Projects: Major Redevelopment Plans from Scentre Group and Vicinity Centres

Australia’s retail property sector is undergoing significant transformation as major landlords pivot toward mixed-use developments, leveraging strategic landholdings to drive long-term value for their assets. Recent announcements from Scentre Group and Vicinity Centres affirm this shift and reflect a clear focus on urban density, residential integration and commercial diversification.

Scentre Group: Strategic Rezoning and Development Pipeline

On 26 February 2025, Scentre Group announced it had secured rezoning approvals for Westfield Hornsby (NSW) and Westfield Belconnen (ACT), paving the way for large-scale developments in these high-density areas. It has been reported that they are also actively engaging with the NSW Government on similar opportunities for sites located in Brookvale, Tuggerah, Parramatta, Eastgardens and Kotara.

According to Scentre Group’s 2024 Annual Report, the group is focusing on “adding density to our large and uniquely located strategic land holdings,” with a $4+ billion development pipeline already in place to achieve this. This aligns with the increased demand for diversified assets that combines living, working and shopping spaces in a single location.

Vicinity Centres: Fast-Tracked Redevelopment and National Expansion

Vicinity Centres is also pushing ahead with ambitious redevelopment plans. Its Bankstown Central project has been fast-tracked by the NSW Housing Delivery Authority, with plans for a mixed-use precinct that includes:

• approximately 1,300 residential apartments;
• approximately 226,000 sqm of retail and commercial space;
• a hotel; and
• student accommodation.

Additionally, Vicinity is replacing other existing retail assets with mixed-use precincts that combine residential, commercial, and retail offerings. It appears that redevelopment is already underway at their sites in Chadstone (VIC) and Buranda (QLD).

What Does This Mean for Tenants?

As these large-scale redevelopments unfold, tenants will face both short-term challenges and long-term opportunities.

• Operational Disruption

  Tenants in affected centres can expect to be impacted by reduced access to core amenities, building services, concierge services, car parking facilities and benefits offered by the presence of 'anchor' tenants if redevelopment is carried out in stages.

• Long-Term Benefits

  The integration of retail spaces within residential and commercial zones will have consumers well positioned to opt for convenience and likely provide retail operators with access to increased foot traffic.

Key Leasing Considerations for Tenants

• Incentives

  Tenants should give weight to incentives paid upfront, as opposed to incentives paid out over the term of the lease, as termination of the lease for redevelopment purposes may impact the total incentive paid out.

• Make Good

  Tenants should negotiate terms that invalidate make good and redecoration requirements if a lease is terminated in connection with redevelopment works carried out by the landlord.

• Demolition

  Tenants should look to negotiate terms that state that the landlord is not permitted to serve a demolition notice prior to a certain date if the tenant commercially requires a minimum tenure for the operation to be feasible.

• Disturbance

  Tenants should carefully consider the impact of disturbances that have been disclosed in a lease or disclosure statement as they will generally restrict or limit a tenant's capacity to make a claim for compensation.