Why these Sydney publicans are pivoting from pints to property

Some of the state’s largest hospitality groups and poker machine operators are using a fast-track planning pathway to pursue multimillion-dollar housing redevelopments of their suburban venues.

Across NSW, pubs and RSL clubs are increasingly turning to the state’s Housing Delivery Authority (HDA) to advance large proposals that would struggle to gain approval under traditional local planning controls.

Established in late 2024, the HDA enables fast-tracked approvals for major residential projects that can begin construction within 12 months, bypassing local councils.

Hospitality operators pivoting from pouring pints to property development have gained approval for 3292 apartments across a dozen hotel and club sites. Six pub projects pitched to the HDA carrying more than 1500 units were knocked back, but more are flowing down the pipeline.

Some developments include towers rising as high as 19 storeys in suburbs historically defined by low-rise buildings.

The shift signals a structural change in how pub land is valued. Where operators once relied on food, gaming and beverage sales as primary revenue streams, their sites are now seen as strategic housing opportunities in a deepening supply shortage.

Leading the trend is Iris Capital, headed by Sam Arnaout, which has lodged plans to convert 10 of its hotel sites across Sydney and regional NSW into mixed-use developments with a total of 2445 apartments and 85 hotel rooms.

Its proposals include a 15-storey, 225-apartment tower above the Narwee Hotel, set to become the suburb’s tallest building.

The Cabramatta Hotel is earmarked for a 440-unit, two-tower project, while Riverwood and Chullora sites could deliver 180 and 291 apartments, respectively. The Strathfield Hotel has 190 apartments planned while retaining the heritage-listed pub, dating back to 1918.

Arnaout said residential development is central to the company’s strategy, and the state’s new planning regime, including the HDA makes more projects viable.

“Local council planning systems have failed to deliver sufficient housing because [controls] particularly around height and density meant [proposals] were no longer commercially feasible,” he said.

“A project can meet every benchmark, but if it’s not commercially feasible, it won’t be built. The HDA helps bridge that gap.”

It’s not just pubs using HDA. Clubs – many facing declining revenue and ageing infrastructure – are turning to the fast-track pathway to diversify their income.

On Sydney’s northern beaches, Dee Why RSL lodged plans for a 115-unit development alongside health and community facilities, after a $14.4 million acquisition of neighbouring land.

Mortdale RSL revived a previously rejected 13-storey housing redevelopment with a new 20-storey scheme featuring 233 apartments, a rebuilt club and a supermarket.

The project would demolish a neighbouring apartment block. The club is talking to residents about relocation, timing and other “transition matters”.

This redevelopment is critical to the club’s survival, a project spokeswoman said.

“Throughout NSW, clubs are becoming less financially secure and at risk of having to close,” she said.

“Without renewal, the club’s ability to support veterans, members and the broader community will become increasingly untenable.”

Developers and industry groups welcome the streamlined HDA process, but heritage advocates and some residents argue locals are being sidelined.

Burwood Historical Society president Chery Kemp pointed to the Strathfield Hotel as an example.

“Placing a large tower above a heritage building risks dominating the site and diminishing its character,” she said.

“They simply don’t make pubs like this any more – and once it’s gone, it can’t be replaced.”

Property Council NSW executive director Anita Hugo said the HDA helps address the housing shortage, describing hospitality sites as logical candidates for redevelopment.

“They are often close to transport, jobs and services. Using them more intensively is part of how cities adapt to growth,” she said.

Nicole Gurran, University of Sydney urban and regional planning professor, said pub sites are often well-located for housing, but their redevelopment carries risks.

“Pubs and hotels are important community anchors, but there are inherent land-use conflicts by adding housing on top of venues – particularly around noise,” she said.

“While residents may want to live near pubs, they don’t always want to hear them, and that creates conflicts that are difficult to mitigate.”

In Newcastle and the Hunter region, Iris Capital is planning redevelopments of the Sydney Junction Hotel in Hamilton (272 apartments), the Argenton Hotel (300 apartments) and the Gunyah Hotel (192).

Wests Group is pursuing a 192-unit development of its Newcastle site, which chief executive Philip Gardner said will provide more stable, long-term revenue.

Australia’s largest pub owner, Endeavour Group, is exploring redevelopment at multiple venues, including the Forest Hotel in Frenchs Forest and the Castle Hill Tavern.

Gurran said the challenge is how to repurpose pubs without losing community value.

“We still need spaces in our cities for social life, for culture, and the night-time economy,” she said. “Otherwise, cities risk losing the diversity that makes them work.”

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