Capitalising on Government Transport Infrastructure Investment / Transport Oriented Development

Discussion Points

Major infrastructure initiatives create step change in real estate values

These projects stimulate urban renewal and new greenfield projects

This process supports broader policy objectives in terms of utilisation of public transport and sustainability

The uplift in land value and development activity creates direct and indirect fiscal benefits for Government

Trends in other jurisdictions

CBRE Research Report

$41bn of transport related infrastructure development is planned for this decade

$18bn in transport infrastructure 2000 - 2010 created 26 million sqm of industrial property

QLD and VIC represent 60% of investment with NSW being the “laggard”

“Big Wheels Keep On Turning”by Kevin Stanley, Executive Director

Global Research & Consulting

NSW share of investment in transport infrastructure declining from 18% to 12%... Where to from here?

Changing trends in infrastructure investment from road to rail (11% to 33%) and intermodal links

Increasing focus on non-metropolitan areas, particularly seaports and regional centres(Newcastle, Geelong)

CBRE Research Report“Big Wheels Keep On Turning”

by Kevin Stanley, Executive DirectorGlobal Research & Consulting

Spending on Australian transport infrastructure2000-2020

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

AU$'s

'000,

000

Source: CBRE (August 2011)Note: includes projects most likely to influence the industrial property sector

Forecast

Share of GDP vs share of transport infrastructureinvestment 2000-2020

0

5

10

15

20

25

30

35

40

45

50

Northern Territory Western Australia South Australia New South Wales Victoria Queensland

% s

har

e

Share of projects 2000-2010Share of projects 2011-2020Share of GDP

Source: CBRE (August 2011)Note: includes projects most likely to influence the industrial property sector

Step change in real estate valuesand catalyst for urban renewal

/ greenfields projects

East Perth Redevelopment, Perth (WA)

Whilst not stimulated by transport infrastructure, case study in tracking real estate value changes through major projects

25% impact on values and linear relationship with distance

Resultant fiscal impacts for Government

Rouse Hill Regional Centre (NSW)

Initially delayed pending State Government commitment to upgrade Windsor Road

Premised on rail and bus linkages

Relative success, but constrained by lack of delivery of N-W rail commitment

Eastern Creek / Brickworks, M7

M7 commitment led to opening up vast employment lands

Dramatic impact on industrial land values and development in Eastern Creek

Other traffic benefits from the ring road

Darwin City Waterfront, Darwin (NT)

Obsolete port after relocation of freight activity, cruise ship terminal unsatisfactory

Convention and exhibition centre key catalyst for total precinct redevelopment, including cruise ship terminal

Successful value outcome for NT Government as well as broader policy benefits

RNA Showgrounds, Brisbane (QLD)

Obsolete showgrounds precinct requiring substantial recapitalisation

Major urban renewal initiative linked to public infrastructure, including exhibition facilities and rail services

Stimulating adjacent redevelopment and property values

The Link Project, Perth (WA)

Inner city blighted site, effectively separating the inner city

Existing rail and bus services

Upgrading of rail / bus interchange acting as a catalyst for a major urban renewal mixed use project

Broader Government Policy Objectives

Transport orientated development (TOD)

In most cases T Adjacent D (TAD)

Current trend in Government policy and many case studies from overseas (good and bad)

Typically to achieve increased utilisation of public transport and urban infill policy

Public transport, particularly light/heavy rail used as an instrument of land use planning

Careful not to ‘adopt’ overseas, particularly US models which are based on different financial drivers, tax structures and building codes

Portland, Oregon, US

Fruitvale, California, US

Union Station, Denver, US

Vauban, Freiburg, Germany

Orestad, Copenhagen, Denmark

Conclusion

Governments should take a more holistic view of transport investment and delivery

Development / redevelopment opportunities

Intermodal linkages

Selective land acquisition

Public / private ‘joint ventures’

Direct and indirect fiscal benefits

Public transport patronage

Investment return