Construction has begun on an ambitious joint venture between the Anglican Church and a private developer that will see an eight-storey residential tower rise alongside a century-old Sydney parish — the first deal of its kind in the diocese, and potentially the model for dozens more to come.

Work started this week on 48 luxury apartments at the corner of Finlayson Street and Rosenthal Avenue in Lane Cove, on land adjoining St Andrew's Anglican Church — a building that dates to 1924 and will itself be extensively renovated as part of the arrangement. The project, named Finrose Residences, is valued at $800 million and is being delivered in partnership with developer Traders in Purple.

In exchange for selling the airspace above and around the church site, the Anglican parish will receive a newly built 400-seat auditorium, additional offices, and car parking — more than doubling the existing 200-seat capacity and giving the growing congregation room to expand for what church leaders describe as the next century of ministry.

A win for housing and the parish

Anglican Bishop of North Sydney Chris Edwards said the Lane Cove deal was straightforwardly good for the city at a time when the Sydney housing crisis continues to deepen.

"This is a good project that will provide community space that wouldn't otherwise exist," Bishop Edwards said. "In addition, Sydney needs more housing, and we want to help."

"The church in Lane Cove is growing, and parishioners need a bigger building and more facilities, and the community needs more cultural spaces. By selling the airspace, we've ensured this is a win for everyone."

Ross Jones, chief executive of Sydney Anglican Property, acknowledged that the finances did not support a social or affordable housing model at this particular site, but said the broader drive remains to address the city's housing shortage.

"The key driver was that the parish is growing out of its space, and it's no longer fit for a modern ministry," Jones said. "So we went into this first partnership with a developer, and we'd love it to be the beginning of many more. There is a community housing crisis, and we want to help provide a solution."

The two- and three-bedroom apartments at Finrose Residences start at $2 million, and pre-sales have been strong. The penthouse has already sold for $5.5 million — a record for Lane Cove, a suburb where the median unit price sits at around $950,000 and the median house price exceeds $3 million.

Developer sees untapped potential in church land

Traders in Purple executive director Charles Daoud said his company had previously developed former church buildings into residential projects, but this marks the first time it has partnered with a congregation that is remaining and actively growing on the site.

"It's a church that's over 100 years old, but we've been building for its future to make it ready for the next 100 years," Daoud said.

He noted that church sites often occupy prime suburban locations precisely because communities historically formed around places of worship.

"Often, these churches are located in really good parts of suburbs because you often start with the church, and the suburb is built around it," he said. "This project is a great development in an excellent location, near the new Metro and The Canopy, and having the oversight of the church is an excellent endorsement."

To realise the project, Traders in Purple also acquired two neighbouring residential properties, which together with the existing church site allowed the developer to construct the expanded auditorium, an additional hall, and the residential tower above.

Thirty parishes already eyeing similar deals

The Lane Cove project may be the first, but it is unlikely to be the last. The Anglican Church holds 1,000 properties across 270 parishes in the Sydney diocese, and at least 30 of those parishes have already indicated they would like to pursue similar arrangements with developers.

Five sites are already in the pipeline: in Five Dock, Marsden Park, Riverstone, Box Hill and Catherine Fields.

The church has previous experience with residential development on its land, having transformed a disused church and property at Beacon Hill into specialist social housing for young people with disabilities. It has also received approval to build apartments integrated with churches at Bankstown and Regents Park, earmarked for single women over 55 and to be operated by Anglicare.

However, the Lane Cove model — market-rate housing developed with a private partner, with church upgrades as the return — represents a new approach, and one that church and property leaders say could be replicated at scale across suburban Sydney wherever Anglican land sits close to town centres, transport links and growing communities.

With Sydney's housing pressures showing no sign of easing, the Anglican Church appears increasingly willing to put its considerable land holdings to work — and a growing number of its parishes are ready to follow Lane Cove's lead.