Are standalone supermarkets and small retail centres in our suburbs ripe for increasing housing supply?

News from Germany in recent days has seen Aldi Nord announce that it intends to build a combined 2,000 apartments above its stores in Berlin.

According to Deutsche Welle, the retailer will build above 30 different stores throughout the metropolitan area of Berlin with 200 apartments already under construction at two of its stores.

The model has already been introduced in Hamburg and one of the primary benefits cited for Aldi is that it allows the company to expand the traditionally smaller supermarkets at each site.

Rather than renovate old, one-storey supermarkets it owns, often in prime locations, the retailer hopes to get planning permission for 30 blocks with larger stores on the ground floor and apartments above.

Irish Times

It's not just a story of extracting even more value from the land and buildings they own - and no doubt that would be a key determinant - Aldi Nord will reportedly give back to the city by reserving 30% of the new apartments for social housing.

Berlin's population, like Melbourne's, is growing and while space and development sites are more constrained in the German capital, for Melbourne - and all major Australian cities for that matter - there is still a wide range of opportunities to redevelop traditional retail-surrounded-by-carpark sites.

Shopping centres and single-site retail precincts surrounded by car parks can often, but not always, be found near rail lines and other high-frequency public transport modes in suburban centres.   

There are already some examples in Melbourne where apartments have been developed above supermarkets - ALDI in Balwyn North on Doncaster Road is an example - but this was a case of redeveloping an old garage with a new building with supermarket space.

• existing small to large-scale shopping centres and single-outlet premises will generally be located in a Commercial Zone.
• Commercial Zones can have residential uses mixed in with commercial uses

This Woolworths on Riversdale Road in Camberwell is zoned C1Z, likewise, this Coles on Grantham Street in Brunswick West is zoned C1Z.

Piedemonte in Fitzroy North has a proposal which would see the existing supermarket demolished, and an entirely new building erected on site, complete with an enlarged supermarket.

Yet one of the main gripes with this proposal is that there was no affordable housing component - which is not surprising given that developers and not compelled to include it in their developments.

Among the listed large-scale developers, Mirvac and Lendlease have both made it known they are looking to expand into the build-to-rent market and likewise they both have significant holdings in retail centres around the country.

However, it remains to be seen if these market rentals that may be built in the near future will aid with affordable housing.