Hidden in Plain Sight: Unlocking Value in Shopping Centres
How REITs are sitting on billions in untapped development potential—and the collaborative approach to releasing it
Given our housing crisis, you may walk through any major retail centre at sunset, and you'll see it: acres of empty rooftop parking. What I see is a vast expanse of unused air rights stretching skyward, service areas that could be so much more.
After seven years with Vicinity Centres, developing strategies across more than 60 assets nationally, I've learned that the biggest opportunities in REIT portfolios are often hidden within existing assets, rather than in acquiring new ones.
The Invisible Portfolio
Most REITs focus on their operating assets: retail GLA, occupancy rates, and rental yields. But there's a shadow portfolio that rarely appears in analyst reports:
Air rights above existing structures
Rooftop parking decks ripe for mixed-use conversion
Excess land around loading docks and service areas
Underutilised zones between buildings
Strategic corners with untapped development potential
During our feasibility studies for the Boxhill asset, we discovered that what appeared to be a fully developed site actually contained multiple development opportunities. The challenge wasn't finding them; it was reimagining what was possible within existing operational constraints.
Beyond "Highest and Best Use"
Traditional development thinking asks: "What's the highest and best use?" But for operating REITs, the better question is: "What's the highest and best use that enhances our existing asset?"
This shift in perspective transforms everything:
Traditional approach: Maximise developable area
Integrated approach: Optimise value across the entire precinct
Traditional: Separate P&Ls for each use
Integrated: Ecosystem thinking where each use amplifies others
Traditional: Development as disruption
Integrated: Development as evolution
Fig 1. Shannon Cloete overview
The Art of Seeing Possibilities
Unlocking dormant value requires a different lens—one that sees beyond current constraints. Working across Vicinity's portfolio, patterns emerged:
1. The Rooftop Revolution
Those dated rooftop carparks? They're actually development platforms. With the right structural strategy and staging plan, they can become:
Residential towers that activate centers after hours
Office spaces that drive weekday retail traffic
Hotels that create destination appeal
Entertainment venues that extend dwell time
The key is maintaining operational continuity. Nobody wants to lose 1,000 parking spaces during peak Christmas trading.
2. Air Rights Alchemy
Many retail centers have valuable air rights that remain unused due to perceived complexity. But with collaborative planning approaches, these become:
Build-to-rent residential providing steady income streams
Medical and wellness precincts leveraging ground-floor retail
Education facilities creating captive customer bases
Mixed-use towers that transform suburban centers into urban villages
3. Edge Activation
The forgotten edges—service areas, loading zones, unused corners—often hold surprising potential:
Last-mile logistics hubs for the e-commerce age
Food production facilities serving multiple tenants
Community facilities that build social license
Green infrastructure that enables broader intensification
The Collaboration Imperative
Here's what I've learned: unlocking this value isn't a design challenge or a financing challenge; it's an alignment challenge.
Success requires orchestrating multiple stakeholders with competing priorities:
Existing tenants worry about construction disruption
Councils seek community benefit
Investors want certainty
Operators need continuity
Communities deserve consultation
The magic happens when you find where these interests overlap. During the Chadstone Masterplan development, we discovered that what retailers feared most wasn’t construction, but losing customers to competitors. By demonstrating how mixed-use development would increase catchment and dwell time, resistance gave way to enthusiasm.
The Feasibility Framework
Not every opportunity should be pursued. Through multiple development cycles, I've developed a framework for assessment:
Stage 1: Desktop Discovery
Review planning schemes for permissible uses
Analyse catchment demographics and gaps
Map infrastructure capacity and constraints
Identify operational impact zones
Stage 2: Stakeholder Soundings
Early engagement with key retailers
Council pre-lodgment meetings
Community sentiment testing
Investor appetite assessment
Stage 3: Integrated Feasibility
Development modelling that includes operational impacts
Staging strategies that maintain income
Risk matrices that address stakeholder concerns
Value creation across the entire asset, not just the development
The projects that proceed are those where everyone wins, not through compromise, but through the creation of creative value.
Case Study: Thinking Differently
Without breaching confidentiality, I can share how this thinking transforms outcomes:
The Challenge: An iconic Sydney shopping centre with mixed MAT that varied level by level, massive open space, and underutilised parking structures, and community opposition to "overdevelopment."
Traditional Solution: Status Quo or Minor Refurbishment.
Integrated Approach:
Engaged the community early to understand concerns
Worked with the council on affordable housing integration
Designed a masterplan that had more focused needs, including a health and wellness precinct above retail
Created a public realm that became a community asset
Staged construction to maintain trading
Result: Rather than fighting planning restrictions, we aligned with community needs. The development enhanced the centre’s role as a community hub while creating new value streams. The existing retail benefited from increased visitation. Everyone won.
The Skills Gap
The biggest barrier to unlocking dormant value isn't planning restrictions or construction costs; it's mindset and capability.
Most organisations separate their operating and development teams. But realising these opportunities requires professionals who can:
Think like operators while planning development
Understand retail dynamics while challenging designers and consultants on residential
Navigate planning frameworks while maintaining returns
Build stakeholder consensus while driving timelines
See possibilities while respecting constraints
This isn’t about being a unicorn; it's about building collaborative teams where these skills exist collectively.
Looking Forward: The REIT Evolution
The REITs that thrive in the next decade won’t be those with the most assets; they’ll be those who best activate what they already own.
This requires:
Leadership that sees development as enhancement, not disruption
Teams that blend operational and development expertise
Processes that integrate rather than separate
Metrics that value long-term transformation over short-term yields
Courage to pursue complex but rewarding opportunities
A Personal Observation
After decades in property, what excites me most is helping organisations see their assets with fresh eyes. There's profound satisfaction in walking a site everyone knows, asking different questions, and suddenly, collectively seeing possibilities that were always there.
The best part? When done right, these developments don’t feel forced or foreign. They feel inevitable, like they were always meant to be there.
That's when you know you’ve truly unlocked value: when the new enhances rather than replaces, when stakeholders become champions rather than obstacles, and when dormant potential becomes living reality.
The opportunities are there. The question is: are we ready to see them?
Shannon Cloete partners with REITs and property owners to identify and activate dormant development opportunities within existing portfolios. With experience across $20B+ in mixed-use and hospitality developments, he specialises in creating value through strategic intensification and stakeholder alignment.
Connect me on contact@shannoncloete.com or LinkedIn or explore more at www.shannoncloete.com
