‘Slow and Steady’ Wins the Race for Pellicano’s South City Square

A decade ago, the corner of Logan Road and Deshon Street in Brisbane’s Woolloongabba offered little reason for locals to linger. Today, the 2.3ha site is a curated precinct where 720 apartment residents can shop at a full-line Woolworths, catch a film at Angelika Cinemas and gather in a central public square—all without leaving their neighbourhood. Melbourne-based developer Pellicano has delivered five towers at South City Square with three more to come. Pellicano made a decision when developing South City Square that, even when selling residential towers to owner-occupiers, the company would keep every square metre of ground-floor and below-ground as retail. That move tied up significant capital in assets other developers may have handed off and monetised quickly. It has given Pellicano something increasingly rare in Australian mixed-use developments—complete control over the retail experience. The strategy has delivered. Pellicano has recently signed 10 new retail tenants at the Woolloongabba precinct, taking it to near 100 per cent retail occupancy even as national vacancy rates remain elevated. Pellicano joint managing director Nando Pellicano [ pictured top ] says the precinct’s success has taken time but is proof that the deliberate amenity and retail offering is working. “It has been a journey,” Pellicano tells The Urban Developer . “It hasn’t happened quickly but everything there now is part of a curated retail offering we wanted to achieve from the outset. “There’s a lot of carparking, it’s very convenient, we’ve got the central square and a lot of open space that suits a Queensland lifestyle very well.” ▲ ‘The Square ’ communal space serves 720 apartment residents and hosts monthly markets and food truck events. Retaining retail assets was intentional “to keep control of the masterplan and the vision”, he says. “Some tenancies we’ve left vacant longer than we had to but we just wanted to make sure we had the right use and the right tenant to fill each space.” The precinct now houses more than 30 retailers including Woolworths, Angelika Cinemas, Priceline Pharmacy, NAB and hospitality venues operated by Talisman Group. Recent additions include Snowscene’s second premises featuring its Signature Suite—the only in-store Goldbergh luxury sportswear showroom in Australia. Pellicano developed South City Square in partnership with Perri Projects. The masterplan went through multiple iterations before settling on a layout that has remained largely unchanged. “The only thing we’ve really changed from inception is what’s inside those towers,” Pellicano says. “The mix of what those towers were has changed and the uses have changed to some degree—probably more residential, less office in some of the later towers.” The family business has delivered five of eight planned towers in a mix of build-to-sell and build-to-rent stock. The first three towers were built to sell, with the next two developed for rental. Once complete, the precinct will deliver around 1100 apartments, with 800 build-to-rent homes and 300 to 400 market apartments. ▲ Five of eight planned towers have been delivered at South City Square on Logan Road and Deshon Street. Pellicano has a reputation for being a forerunner in the build-to-rent space before it was even a buzzword. The model has been in the blood since the 1970s, when Nando Pellicano’s father and uncle developed and held residential units. “We’ve still got some of those units we developed in the 70s,” Pellicano says. “We like the asset class. We’ve definitely gone a lot larger in it over the years.” The developer’s decision to retain all ground floor and below-ground retail assets—even in towers sold to owner-occupiers—has enabled consistent curation of the retail offering. The Woolworths supermarket is in a lower piazza beneath a residential building that Pellicano sold but the company kept the retail component, prioritising convenience-based health and wellness and service uses that generate daily foot traffic. Pellicano maintains in-house property management through Pellicano Living, operates hospitality venues via Talisman Group and runs the wellness facilities under its own banner. The developer has invested in public realm and ongoing activations including The Square, monthly food truck events, markets, school holiday workshops and more on the way. Pellicano says finding the balance between saleable space and open space required “looking at a lot of examples both locally and overseas before we started the process”. “We went to The Grove in LA, which was at a larger scale but that’s a very similar climate to Queensland, with a lot of outdoor experiences as well as indoors.” Delete Pellicano highlighted three priorities the company refused to compromise on throughout the development: open space and landscaping, amenity and the retail mix. The developer engaged different architects for retail and ground-floor design versus residential towers, recognising the different skill sets required. The remaining three towers comprise a sixth build-to-rent tower currently in design, a seventh tower combining 200 hotel rooms with 6000 to 8000sq m of commercial space and an eighth residential tower. Pellicano expects to start construction on the next build-to-rent tower this year, with subsequent towers following in sequence. The company will operate an “upper end” hotel through its existing capability, though the brand remains undecided. “Because of our Rambla brand, we’ve got the team and the skill set now to run these hotels,” Pellicano says. “It will be a premium model and we’ll run it in some way, shape or form.” The build-to-rent stock has high occupancy rates and the build-to-sell towers sold some years ago. Pellicano says resident retention can be attributed to the convenience of ground-floor retail. “The feedback we get is very, very positive,” Pellicano says. “People tend to stay there a reasonable amount of time. I think people enjoy having that convenience downstairs.” ▲ Hillyard House under construction at South City Square. Pellicano has three of eight planned towers still to deliver. While the developer has enjoyed bringing decades of experience building business parks, mixed-use developments and residential projects into the one precinct, Pellicano says it “would probably be a challenge to replicate a project like South City Square” elsewhere. “It’s not easy to find these types of sites—it’s over a 2ha site,” he says. “They don’t come around that often and they do take a lot of time for a private developer to develop.” That said, the company is open to opportunities. “Masterplan precincts are what we’ve always done, whether it’s business parks or mixed-use or residential. But we’re always looking and trying to do different things,” Pellicano says. “It might not exactly be a South City Square again but I think the concept is a good concept, even if it’s a smaller size. “You’re always learning and always doing things differently. It’s really market dependent. Nothing ever stays still and nothing ever stays the same. We’re always looking to improve, evolve, change.”

‘Slow and Steady’ Wins the Race for Pellicano’s South City Square

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