NSW Industrial Lands Action Plan: What it means for the Large Format Retail sector?

The NSW Government released its Industrial Lands Action Plan in January 2025 which has been promoted to be a new approach to planning, securing and managing the supply of industrial land.

Key Initiatives of the Industrial Lands Action Plan

• Deliver a statewide policy for industrial lands based on the categorisation of areas and precincts as
  • State Significant
  • Regionally Significant
  • Locally Significant and;
  • Other Industrial lands
• Investigate planning and policy interventions to support intensification of State and Regionally significant industrial ands
• Finalise and release a statewide approach for an industrial lands supply pipeline
• Create an Employment Land Development Program to manage supply and coordinate infrastructure investment

What does this mean for the Large Format Retail Sector?

The ongoing shortage of appropriately zoned land to meet increasing demand for Large Format Retail floorspace remains a significant challenge for the sector.

We were optimistic that the NSW Government’s Employment Zones Reform package that was implemented in April 2022 would increase the volume of land in which Large Format Retailing could be located, the ‘wins’ were relatively piecemeal and small in nature.

Rezoning applications therefore continue to be the only option within NSW to increase the amount of land that is appropriately zoned for Large Format Retail purposes.

The Industrial Lands Action Plan does not provide an immediate solution to this issue. Once categorised, State Significant and Regionally Significant industrial land will still be off-limits for alternative uses, including Large Format Retail

However, there may be some potential opportunities for the LFRA sector in the pipeline:

1. Locally significant and other industrial areas are recognised as the categories that may contain areas with the potential to transition from industrial uses to alternative uses, or allow non-industrial uses based on a strategic assessment.

2. Once the industrial lands are categorised, it has been confirmed that existing policies such as the ‘Retail and Manage’ policy in Greater Sydney will no longer apply. This is good news as the ‘Retain and Manage’ policy effectively provides a moratorium on the ability for any industrial lands being rezoned to alternative uses.

3. One of the six objectives for the new Statewide policy is to allow for alternative uses in underutilised industrial lands, with an initial focus on alternative employment uses.

Watch this space

During Q1 and Q2 2025 the NSW Government is set to investigate the assessment criteria that would be applied to alternative land uses seeking to rezone as well as alternative planning pathways.  There may also be opportunity for industry to engage with the Government directly to provide feedback on the most appropriate assessment criteria.

For more information, please reach out to Claire Burdett, Associate Director at Ethos Urban. To understand what the Industrial Lands Action Plan means for the industrial sector, the Ethos Urban Industrial Specialists has prepared a separate analysis.

This article originally appeared in Unwrap Large Format Retail.