Flood-ravaged Toombul could be razed to make way for high-rise

There’s growing speculation over the future of Toombul Shopping Centre after it was damaged during the February floods.

Will the flood-ravaged Toombul Shopping Centre be demolished to make way for high-rise residential development?

City Beat spies tells us centre owner Mirvac is running the numbers on the viability of reopening the centre, severely damaged during floods earlier this year.

One option would be to raze the 54-year-old centre to the ground and redevelop it as a more lucrative build to rent (BTR) residential precinct incorporating a smaller retail component. Toombul is close to rail and bus routes making it ideal for apartment living.

Mirvac declined to comment on its long-term plans for Toombul but said further announcements would be made next week.

“We are still working through the important decontamination works and further assessment to understand the extent of the damage,” Mirvac says. “At this stage we don’t know how long the centre and carpark will remain closed.”

Any decision to demolish will be a tough call for tenants who are struggling to find new locations for their businesses following the floods. Some have managed to reopen in nearby centres but other remain without a home.

Queensland University of Technology retail expert Gary Mortimer says the flood damage provides the ideal opportunity for regeneration of the 10ha site, suggesting the number of shopping outlets be halved to incorporate residential development.

He says the centre has struggled to attract new tenants in recent years with the scale of the number of outlets leaving it vulnerable to market duplication.

In 2016, ASX-listed Mirvac paid $228.1 million for Toombul, which in 2003 was acquired by Centro Properties which was rebranded Federation Centres and later Vicinity Centres.

The centre opened as Westfield Shopping Town Toombul on Wednesday 11 October 1967. It was originally anchored by a Barry and Roberts Department store, Coles supermarket, Bayards store and 60 specialty stores. It was the first shopping centre in Brisbane built with air-conditioning and had off-street parking for up to 1500 vehicles.

In a recent operation update Mirvac said: “Our retail asset Toombul, in Brisbane experienced extensive flood damage and is currently closed as we assess the damage and determine the appropriate next steps.”

Flooding inside Toombul shopping centre. Photo: Jamie Weston

Mirvac is among the growing number of property firms eyeing the lucrative Build to Rent market and currently has $1bn BTR assets under construction,

Mirvac’s head of integrated investment portfolio Campbell Hanan says conditions across the BTR sector are buoyant with residential vacancy rates at 16 year lows and renters one of the fastest growing cohort of the residential segment. Hanan says Mirvac’s BTR Indigo project in Sydney is now 98 per cent leased and the outlook remains positive.

“We expect limited forecast apartment supply and the recent re-opening of international borders will help drive demand in the sector,” says Hanan.

-With reporting by Brendan O’Malley