Sydney’s North Shore: Navigating the TOD & LMR

What the NSW Government’s TOD and LMR planning reforms really mean for North Shore commercial property owners

The NSW Government’s Transit Oriented Development (TOD) and Low and Medium Rise (LMR) housing policies aim to accelerate housing supply by encouraging higher-density development around transport hubs. Designed to address Sydney’s housing crisis, these reforms are also having major ripple effects for commercial and mixed-use property owners across the North Shore.

While the reforms create exciting possibilities for well-positioned sites and reputable developers, the reality is more complex. Not every property within a TOD precinct is automatically a developer goldmine – and in some cases, waiting for policy changes to materialise could mean missing one of the strongest market we’ve seen in years.

The promise vs the reality

Since the reforms were announced, owners within 400 metres of train stations have been told their properties could one day be worth multiple times their current value. In theory, that sounds enticing. However, in reality, it’s far from guaranteed.

As Bill Geroulis, Director and Head of Commercial Sales and Leasing at Shead, explains:

“We’ve had owners approach us expecting huge premiums overnight. The truth is, the TOD framework is still evolving, councils are pushing back, and approvals could take years – if they happen at all. In the meantime, there’s strong demand for quality commercial sites right now.”

In other words, it may take two, three, even five years before TOD rezoning outcomes are confirmed. And while owners wait, today’s demand for income-producing assets remains robust, particularly around established commercial centres like Chatswood and other suburbs on Sydney’s Upper and Lower North Shore.

A reality check for owners

Consider the following hypothetical but very real scenario.

A retail owner near a North Shore railway station is told their shopfront could be worth $10 million once TOD rezoning takes effect. However, the property is already worth $7 million as a leased, income-producing investment today. Furthermore, the higher figure depends entirely on uncertain approvals, rising construction costs and buyer appetite years down the track.

Sell today, and the owner could achieve an excellent outcome under current conditions. However, by holding out for a future return that may never arrive, they risk being locked into years of stagnation.

If it sounds too good to be true, it probably is

Adding to the confusion are developers offering eye-watering figures attached to conditional contracts.

Bill says, “We know of developers who have offered commercial property owners $20 million for a property currently worth around $5 million on the proviso that they get approval for a 40-storey tower. But what many owners don’t realise is that these conditional contracts can tie them up for years. The developer will take a 1– 2% deposit, lodge the DA, and in the meantime, the owner’s hands are tied. They can’t sell to anyone else, locking them into uncertainty while the market moves on.”

These situations highlight why property owners need clear, independent advice before committing to anything that could restrict their flexibility for years.

Balancing optimism with realism and opportunity with prudence

Shead’s approach has always been to balance optimism with realism. There’s genuine potential in well-located sites, but also significant risk for those relying on untested policy outcomes.

“Owners need to understand their true value today, not just a speculative value tomorrow,” says Bill. “While waiting for the perfect developer or policy to take effect, many risk missing out on strong current demand.”

At Shead, our focus is on strategy, timing and trusted partnerships. We work with reputable developers and experienced investors who understand the realities of feasibility, design and long-term value creation. Our deep knowledge of North Shore commercial and retail markets allows us to help clients distinguish between hype and genuine opportunity – identifying when to hold back, when to sell, and how to structure deals that deliver both certainty and flexibility.

Backed by a proven track record in matching the right owners and developers, we are known for our transparency, diligence and commitment to long-term relationships. Many of our clients have achieved outcomes they never thought possible – not through speculation, but through smart, strategic decision-making.

To recap:

• Adopt a balanced approach – While the TOD and LMR reforms will eventually reshape Sydney’s built environment, the path ahead is still uncertain. For property owners, the key is to act with eyes wide open, balancing opportunity with prudence.
• Understand your asset’s current worth, not just its potential future value – Seek independent advice before signing anything that sounds too good to be true. And above all, trust experience over speculation.
• Know how the market is tracking – For owners of commercial or mixed-use properties within TOD and LMR zones, the best strategy right now may be to leverage current conditions. Buyer appetite for well-located, income-producing assets remains strong, particularly in established retail and business precincts across Sydney’s North Shore.