D e c e m b e r 2 0 1 5

Kingfisher Town Centre

Economic Assessment

Prepared for

Wincity Developments

by

Essential Economics Pty Ltd

Authorship

Report stage Author Date Review Date

Draft report Nick Brisbane 24 April 2015 John Noronha 24 April 2015

Final report (Updated to include final plans on 3 June 2015)

Nick Brisbane 13 May 2015

Amended Final Report

Nick Brisbane 21 October 2015

Final Report (updated to include final plans as of 27 November 2015)

Nick Brisbane 3 December 2015

Disclaimer

Although every effort has been made to ensure the accuracy of the material and the integrity of the analysis presented herein, Essential Economics Pty Ltd accepts no liability for any actions taken on the basis of the contents of this report.

The information in this report has been prepared specifically for the stated client. This document should not be used or replicated in any way by any other party without first receiving written consent from Essential Economics Pty Ltd.

Contact details

For further details please contact Essential Economics Pty Ltd at one of our offices:

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ABN 92 079 850 427

Our Reference: 15218

Contents

Introduction ........................................................................................................................ 1

1 Context Analysis ........................................................................................................ 2 1.1 Regional Planning Context: The Sunbury Corridor ............................................................................ 2 1.2 Kingfisher Estate and Town Centre ................................................................................................... 6 1.3 Activity Centre Planning Context ...................................................................................................... 9

2 Trade Area Analysis .................................................................................................. 11 2.1 Trade Area Definition ...................................................................................................................... 11 2.2 Residential and Population Outcomes ............................................................................................ 13 2.3 Future Retail Spending by Trade Area Residents ............................................................................ 14

3 Economic Analysis of the Kingfisher Town Centre...................................................... 16 3.1 Supermarket Assessment ................................................................................................................ 16 3.2 Specialty Retailing in the Town Centre ........................................................................................... 18 3.3 Non-retail Floorspace in the Town Centre ...................................................................................... 19 3.4 Opportunity for Commercial Uses on Melbourne – Lancefield Road ............................................. 20 3.5 Summary of Potential Land Uses in the Kingfisher Town Centre .................................................... 21 3.6 Implications for the Role of the Kingfisher Town Centre ................................................................ 21

4 Kingfisher Town Centre Employment Outcomes ........................................................ 23

5 Summary of Key Findings ......................................................................................... 25

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I N T R O D U C T I O N

This report has been prepared on behalf of Wincity Developments (Wincity) to provide economic analysis of the potential for a town centre serving a neighbourhood role to be established as part of the proposed Kingfisher Estate in Sunbury East.

The Kingfisher Estate, located to the east of Melbourne-Lancefield Road, is planned to accommodate approximately 2,300 households. Potential for a Neighbourhood Activity Centre has been identified to serve the future residents of the Kingfisher Estate and existing residents in the suburbs of Goonawarra and Rolling Meadows located to the west.

Wincity are currently in the process of preparing a planning application for the initial stage of the Kingfisher Estate (referred to herein as Stage 1), which will include the planned Town Centre. This report will inform the preparation for the planning application and the level of floorspace that could be accommodated at the town centre in the short-term.

Additionally, the Metropolitan Planning Authority (MPA) is in the process of preparing the Lancefield Road Precinct Structure Plan. The Draft Urban Structure for the Lancefield Road Precinct Structure Plan identifies the need for a town centre at the Kingfisher Estate. This report provides an assessment of the supportable floorspace that could be accommodated at the proposed centre once the surrounding area is fully developed.

The report includes the following information:

Analysis of amount of retail and commercial development that would be supportable at

the proposed activity centre in the short and long-term

Identification of the role and scale of the town centre, including retail, commercial and

other potential uses

Analysis of local employment generation at the centre.

This Report

This report contains the following chapters:

1 Context Analysis

2 Trade Area Analysis

3 Economic Analysis of the Kingfisher Town Centre

4 Kingfisher Town Centre Employment Outcomes

5 Summary of Key Findings

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1 C O N T E X T A N A LYS I S

This Chapter provides contextual background to the economic analysis presented in this report, and includes the following:

1 An overview of the regional context for growth planning in the Sunbury Growth Corridor

2 A description of the Kingfisher Estate and the proposed Neighbourhood Centre.

3 An overview of existing and planned activity centres in the region.

1.1 Regional Planning Context: The Sunbury Corridor

The Kingfisher Estate and the Lancefield Road Precinct Structure Plan (PSP) are located in the Sunbury Growth Corridor, which comprises extensions to the Sunbury urban area mainly to the north (along Lancefield Road) and to the south (connecting to Diggers Rest).

Sunbury is a contained township which is surrounded by areas of rural land. Sunbury is located in close proximity to metropolitan Melbourne and is served by a range of transport connections, principally the Calder Freeway, and the Sunbury-Bulla Road which links with the Tullamarine Freeway. A bypass of the Bulla township is currently proposed to ease congestion across Deep Creek, and route options are under investigation. The Outer Metropolitan Ring Road (OMR) is a longer-term piece of infrastructure that will significantly improve connectivity to other growth areas in Hume-Whittlesea-Mitchell and Wyndham-Melton.

Urban development in Sunbury will also be supported by the existing rail line to Sunbury, that was recently electrified and which resulted in an increase in the level of services available to Sunbury residents. Additionally, the Principal Public Transport Network (PPTN) is planned to connect the Sunbury population to the train station, the town centre, and to surrounding metropolitan areas including Melbourne Airport, Broadmeadows and the Melton corridor, via a SmartBus service along arterial roads.

Opportunities have also been identified to improve localised transport connections throughout the corridor, including the continuation of Elizabeth Drive to Lancefield Road.

The Sunbury / Diggers Rest Growth Corridor Plan (2012), shown in Figure 1.1, identified the land containing the Kingfisher Estate and the Lancefield Road PSP area as future residential areas located to the east of existing urban areas. In general terms, Sunbury’s urban area is planned to expand to the north-east, south-east, south and south-west.

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Figure 1.1: Sunbury/Diggers Rest Growth Corridor Plan

Source: Growth Areas Authority, 2012 Note: Kingfisher Estate location indicative only

Kingfisher Estate

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The Sunbury / Diggers Rest Growth Corridor Plan (2012) provided the basis for more detailed planning of future growth areas. The MPA are currently preparing a PSP for Lancefield Road, which contains the Kingfisher Estate. A Draft Future Urban Structure has been prepared and is shown in Figure 1.2.

The Draft Future Urban Structure of the Lancefield Road PSP identifies the location of the proposed Neighbourhood Centre at the Kingfisher Estate along with the primary and secondary road network, locations for community facilities and open space, potential drainage and wetlands locations, etc.

Importantly, the Draft Future Urban Structure also highlights opportunities for the integration of future residential areas and town centres with the existing suburbs of Goonawarra and Rolling Meadows.

The potential for a Major Town Centre in the Lancefield Road PSP has also been identified for a location in the northern part of the PSP area. Further discussion on the anticipated roles of these centres is provided in Section 1.3.

MPA are also preparing the Sunbury South PSP located to the south of the Lancefield Road PSP area. The implications of the Sunbury South PSP on the surrounding activity centre hierarchy are discussed in Section 1.3.

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Figure 1.2: Lancefield Road Draft Urban Structure, December 2014

Source: MPA, December 2014

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1.2 Kingfisher Estate and Town Centre

The Kingfisher Estate forms part of the Lancefield Road PSP area and is located to the east of Melbourne – Lancefield Road. In total, Kingfisher is planned to contain a total of approximately 2,300 households, a primary school and a town centre (which is the subject of this assessment). Households in the Kingfisher Estate will have access to significant areas of Rural Conservation Zoned (RCZ) land as the estate adjoins the Urban Growth Boundary to the east. Emu Creek is located just beyond the Urban Growth Boundary.

The planned town centre is located central to the Kingfisher Estate and will serve a neighbourhood shopping and commercial role. Importantly, the location of the planned town centre will also be accessible to approximately 5,410 existing residents in Goonawarra and Rolling Meadows who are located to the west of Melbourne – Lancefield Road and who currently have limited access to neighbourhood and supermarket shopping facilities.

Unlike many greenfield residential and town centre developments, the Kingfisher Town Centre will benefit from an existing catchment which will enable the town centre to be developed in the early stages of development. This will provide existing residents in Goonawarra and Rolling Meadows with access to a greater level of neighbourhood shopping facilities.

The development of a town centre in the early stages will also have a positive impact on the rate of residential sales at the Kingfisher Estate. Wincity expect residential sales in the order of 150 sales per annum, which is reasonable having regard for the high level of amenity that will be provided at the Kingfisher Estate and the early development of a town centre.

Wincity are currently in the process of preparing a planning application for the initial stage of the Kingfisher Estate, which will include 619 residential lots (400 conventional housing lots plus 200 medium density lots) and the planned town centre.

Figure 1.3 shows an indicative Masterplan for the Kingfisher Estate while Figure 1.4 shows the Masterplan for Stage 1.

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Figure 1.3: Indicative Kingfisher Estate Masterplan

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Figure 1.4: Kingfisher Estate Stage 1 Masterplan

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1.3 Activity Centre Planning Context

Planning for a network of town centres to serve the Sunbury region has been informed by the Sunbury / Diggers Rest Growth Corridor Plan (2012), which identified potential for a Major Town Centre in Sunbury South in addition to the existing Sunbury Town Centre. The Growth Corridor Plan also identifies the need for a network of neighbourhood centres; however, does not detail the preferred locations for such centres.

As input to the Lancefield Road and Sunbury South PSPs, the MPA commissioned HillPDA to prepare the Retail and Economic Assessment for PSP74 and PSP75 (Sunbury Township) (October, 2014).

Figure 1.5 shows the activity centre network as identified in the HillPDA report.

Figure 1.5: Potential Activity Centre and Employment Network (Hill PDA)

Source: Hill PDA, Retail and Economic Assessment for PSP74 and PSP75, October 2014

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HillPDA identify potential for 5,000m2 of retail floorspace at the Kingfisher Neighbourhood Centre (identified as E1 in Figure 1.5) plus 1,000m2 to 5,000m2 of office and community services floorspace. The other centres of relevance to the proposed Kingfisher centre include the following:

Regional Activity Centre: Sunbury Town Centre (A1), which Hill PDA identify potential to accommodate up to 91,000m2 of retail floorspace.

Potential Sub-regional Activity Centres:

- Sunbury South (B1): which Hill PDA identify potential to accommodate up to 32,000m2 of retail floorspace, including up to two Discount Department Stores and three supermarkets. Potential for up to 80,000m2 of total floorspace (including retail, office and community uses) has been identified by HillPDA. This centre is located to the south of the planned Kingfisher Town Centre.

- Lancefield Road (B2): which Hill PDA identify potential to accommodate up to 25,000m2 of retail floorspace, including up to two Discount Department Stores and three supermarkets. Potential for up to 63,000m2 of total floorspace (including retail, office and community uses) has been identified by HillPDA. This centre is located to the north of the planned Kingfisher Town Centre.

Existing Neighbourhood Centres: Goonawarra Local Centre (C2) is an existing local centre providing daily convenience retailing to the surrounding community. Hill PDA identify potential to accommodate 2,000m2 of retail floorspace at this centre, which is only sufficient to provide a limited extent of local day-to-day convenience retailing.

As shown in Figure 1.5, the proposed Kingfisher Neighbourhood Activity Centre (shown as E1 in Figure 1.5) is located central to a neighbourhood catchment that lies between the two planned Major Town Centre (refer B1 and B2 in Figure 1.5). These Major Town Centres will serve larger sub-regional catchments than the proposed Neighbourhood Activity Centre at the subject site.

Importantly, the Kingfisher Neighbourhood Activity Centre (or town centre) will provide the surrounding catchment with convenient access to day-to-day and weekly shopping, without having to travel to larger centres for such items. When undertaking convenience related shopping at large centres the size planned for Sunbury South (B1) and Lancefield Road (B1), consumers often have to content with inconveniences such as increased traffic and car parking which is often provided some distance from the intended shopping destination.

In this context, the proposed Kingfisher town centre is well-located to serve a neighbourhood centre role in the context of the planned activity centre hierarchy.

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2 T R A D E A R EA A N A LYS I S

This Chapter provides an overview the trade area that will be served by the Kingfisher Town Centre, including population outcomes and the retail spending capacity of trade area residents.

2.1 Trade Area Definition

A trade area has been defined with reference to the locations of existing, planned and potential town centres (refer Section 1.3), and other geographical features such as, creeks, road connections, and the like.

The trade area for the Kingfisher Town Centre is shown in Figure 2.1 and includes the following:

The Kingfisher Estate

Established suburbs of Goonawarra and Rolling Meadows

Land to the immediate north and south of the Kingfisher Estate that will also have relatively easy access to the Kingfisher town centre relative to other planned centres.

While the trade area shown in Figure 2.1 is anticipated to account for the majority of customers at the planned Kingfisher Town Centre, the centre will also attract customers from areas beyond the trade area.

This is especially the situation for areas to the north of the trade area including the townships of Romsey and Lancefield who also have limited access to major and full-line supermarket facilities. People living in this region are served by a limited range of retail facilities, comprising:

Romsey: 5,120m² of retail floorspace, including 2,100m² of supermarket floorspace

Lancefield: 1,580 m² of retail floorspace, including 500m² of supermarket floorspace.

The proposed Kingfisher Town Centre will be the only supermarket based centre serving residents located to the north-east of Sunbury for the foreseeable future; the development of the planned Lancefield Road sub-regional centre (Refer Section 1.3) is not anticipated to occur for some time. The centre’s proximity to Melbourne-Lancefield Road will enable the centre to capture a level of passing trade, including residents of Romsey and Lancefield who may pass by the Kingfisher Town Centre while travelling to and from work.

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Figure 2.1: Kingfisher Neighbourhood Activity Centre Trade Area

Produced by Essential Economics using MapInfo and Bing Maps

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2.2 Residential and Population Outcomes

The opportunity to establish a town centre as part of the Kingfisher Estate will be largely driven by retail demand generated by the existing community in Goonawarra and Rolling Meadows, the eventual population in the initial stage of development at Kingfisher (referred to as Kingfisher Stage 1), the population in the balance of the Kingfisher Estate and the population in the balance of the trade area.

This analysis of demand for retail shopping provision is based on the following population outcomes:

Goonawarra and Rolling Meadows: Approximately 5,410 residents live in Goonawarra and Rolling Meadows based on ABS Estimated Resident Population data at the small area level. This population is expected to remain relatively constant over time.

Kingfisher Stage 1: A total of 619 households are planned for Stage 1. For the purpose of this analysis, an average household size of 2.8 persons per household has been applied as a conservative basis on which to estimate population outcomes. Based on this assumption, approximately 1,730 residents will live in Kingfisher Stage 1.

Assuming the first residents of Kingfisher Stage 1 move in during 2017 and an annual sales rate of approximately 150 sales per year is achieved, Stage 1 will be completed by around 2021.

Balance of Kingfisher Estate: Approximately a further 1,680 households are planned for the balance of the Kingfisher Estate. Assuming a conservative average household size of 2.8 persons, approximately 4,710 residents will live in the balance of the Kingfisher Estate once it is fully developed.

Balance of the Trade Area: Approximately 2,070 residents are estimated to live in the balance of the trade area based on the area of developable land identified in the Draft Future Urban Structures prepared by MPA for the Lancefield Road and Sunbury South PSPs and assuming the following:

- A land development efficiently of 70%

- A housing density of 15 lots per hectare

- An average household size of 2.8 persons.

Based on the above parameters, the following population outcomes are forecast for the Trade Area:

Existing (2015): Approximately 5,410 residents in Goonawarra and Rolling Meadows.

Completion of Kingfisher Stage 1 (2021): Approximately 7,140 residents in Goonawarra, Rolling Meadows and Kingfisher Stage 1.

At capacity (assumed to be 2038): Approximately 13,920 residents in the Trade Area.

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2.3 Future Retail Spending by Trade Area Residents

Estimates of retail spending by Trade Area residents are provided for the following broad retail categories:

Food, liquor and groceries (FLG), which comprises household spending on take-home food, groceries and liquor. This type of spending is usually directed to retail stores that include supermarkets, fresh food stores, bakeries, butchers, etc.

For the purpose of this analysis, it is assumed 70% of FLG spending is directed to supermarkets. This assumption reflects retail spending patterns in outer suburban areas.

Food catering, which includes household spending at cafes, restaurants and take-away food outlets.

Non-food retailing, including household spending on apparel, leisure and general merchandise, bulky merchandise and homewares.

Retail services, which comprises household spending on services such as hair dressing, dry cleaning, video hire, and optometry.

Per Capita Retail Spending, 2015

Estimates of per capita retail spending by Trade Area residents have been prepared with reference to the MarketInfo retail spending model. MarketInfo is a micro-simulation model which uses data from the ABS Household Expenditure Survey, the ABS Census of Population and Housing, ABS Australian National Accounts, and other relevant sources.

Estimates of the average per capita retail spending levels of residents in Goonawarra and Rolling Meadows are shown in Table 2.1. For the purpose of this assessment, it is anticipated that future residents in the Trade Area will have similar retail spending patterns to those in Goonawarra and Rolling Meadows.

The analysis shows that current average retail expenditure within the trade area is estimated at approximately $13,160 per capita, which is approximately -7% below the per capita average for Metropolitan Melbourne.

Table 2.1 also shows average retail spending of Trade Area residents in 2015 by retail category. Figures are in constant 2015 dollars.

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Table 2.1: Average Per Capita Retail Spending of Trade Area Residents, 2015 ($2015)

Retail Category Kingfisher Trade Area

Metropolitan Melbourne

Variation from metropolitan Melbourne

FLG $5,370 $5,480 -2.0%

Food Catering $1,500 $1,800 -16.7%

Non-food $5,850 $6,260 -6.5%

Retail Services $440 $550 -20.0%

Total $13,160 $14,090 -6.6%

Source: Essential Economics, based on MarketInfo Note: Figures expressed in 2015 dollars; supermarket FLG refers to the share of FLG spending typically

directed to supermarkets (and noting that supermarkets also attract a small share of expenditure on other product categories)

Forecast Total Retail Spending, 2015-2038

Total available retail spending by Trade Area residents is calculated by applying average per capita spending shown in Table 2.1 to the forecast population in the Trade Area (refer Section 2.2); with the application of real growth in spending per capita based on historical growth rates in retail spending over the past 20 years, as derived from ABS Australian National Accounts data and which reflects an average growth rate of approximately 1% pa.

On this basis, residents in the identified Trade Area will generate total retail spending of approximately $100.4m in 2021, upon the completion of Kingfisher Stage 1 (figures in constant 2015 dollars). This includes approximately $27.4m in FLG spending directed to supermarkets.

Once the Trade Area is fully developed (by 2038), Trade Area residents are forecast to generate total retail spending of approximately $239.0m (in 2015 dollars), including approximately $56.2m in FLG spending directed to supermarkets.

Table 2.2 provides a summary of forecast retail spending of Trade Area residents by retail category.

Table 2.2: Total Retail Spending by Trade Area Residents, 2015-2038 ($2015)

Retail Category 2015 2021 2038

FLG $29.1m $39.2m $80.2m

- Supermarket FLG $20.3m $27.4m $56.2m

- Other FLG $8.7m $11.8m $24.1m

Food Catering $8.1m $11.2m $24.5m

Non-food $31.7m $46.6m $125.2m

Services $2.4m $3.5m $9.1m

Total Retail $71.3m $100.4m $239.0m

Source: Essential Economics; MarketInfo Note: Figures expressed in 2015 dollars; supermarket FLG refers to the share of FLG spending typically

directed to supermarkets (and noting that supermarkets also attract a small share of expenditure on other product categories).

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3 EC O N O M I C A N A LYS I S O F T H E K I N G F I S H E R TOW N C E N T R E

Based on the preceding population and retail spending estimates, this Chapter presents an assessment of the development potential for the proposed Kingfisher Town Centre, including an assessment of the supermarket, speciality retail and non-retail development that would typically form part of such a centre.

This assessment takes into consideration the supportable floorspace upon the completion of Kingfisher Stage 1, as well as the Trade Area when fully developed.

3.1 Supermarket Assessment

Supermarkets are the anchor tenants that support surrounding speciality shops within neighbourhood centres, and are therefore integral to the viability of such centres. The following assesses the opportunity for supermarket development at the Kingfisher Town Centre upon the completion of Stage 1 and once the Trade Area is fully developed.

Kingfisher Stage 1 – 2021

An analysis of the supportable supermarket floorspace at the proposed Kingfisher Town Centre upon the completion of Stage 1 is shown in Table 3.1 and indicates that sufficient demand will exist by 2021 to support a major supermarket of approximately 3,200m2.

The provision of a major supermarket will enable the centre to capture a relatively high share of spending by Trade Area residents, who are forecast to spend approximately $27.4m of FLG spending directed to supermarkets (refer Table 2.2).

A major supermarket at the Kingfisher Town Centre could capture a market share estimated at 65% of Trade Area residents’ supermarket spending at this time. The balance of spending would be directed to other supermarkets located further afield, namely those located in the Sunbury Town Centre.

In addition to capturing spending from Trade Area residents, a supermarket at the Kingfisher Town Centre would also capture spending from beyond the Trade Area, in particular from residents living to the north of the Trade Area who are not currently served by major supermarkets. Approximately 6,400 residents live in the townships of Romsey and Lancefield and a share of their supermarket needs may be served by a major supermarket at the Kingfisher Town Centre.

Allowing for 20% of supermarket turnover to be generated from beyond the Trade Area and 6% of turnover to be generated from the sale of non-FLG merchandise, a 3,200m2 supermarket at the Kingfisher Town Centre could achieve estimated turnover in the order of $24m by 2021 (in constant 2015 dollars). This would be sufficient to attract a major supermarket operator (e.g. Woolworths or Coles) who would typically seek to locate in growth areas once a Trade

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Area population approaches 6,000 residents and with estimated store turnover approaching $20m. With these benchmarks in mind, it is likely that a major supermarket operator may seek to establish a store in the Kingfisher Town Centre by approximately 2018 or 2019.

Table 3.1 summarises the above supermarket assessment.

Table 3.1: Supermarket Development Potential – Kingfisher Stage 1, 2021

Category Value Kingfisher Stage 1

(2021)

FLG spending by trade area residents directed to supermarkets $27.4m

Market share 65%

FLG spending retained $17.8m

Plus FLG turnover from beyond the trade area (@20%) $4.5m

Total supermarket FLG turnover $22.3m

Plus non-FLG turnover (@ 6%) $1.4m

Total estimated supermarket turnover $23.7m

Supportable supermarket floorspace 3,200m2

Average supportable supermarket turnover per m2

$7,410/m2

Source: MarketInfo; Essential Economics Note: Figures are in constant 2015 dollars

Full Development – 2038

Once the Trade Area is fully developed, which is assumed to be by 2038, the Kingfisher Town Centre has the potential to support the following:

One major supermarket of 3,800m2, which would be an expanded version of the supermarket developed in Stage 1

One smaller supermarket in the order of 1,500m2.

The smaller supermarket is unlikely to be a major operator and in today’s supermarket environment may comprise an ALDI or IGA supermarket. However, the retail sector is a dynamic sector and new supermarket operators may enter the market over the next 20 or so years. The development of a second smaller supermarket would rely on the individual plans of the potential operator and whether they plan to operate within this region, or within any of the other planned centres.

Combined, potential exists for approximately 5,300m2 of supermarket floorspace to be supported at the Kingfisher Town Centre at full-development, and these supermarkets are forecast to achieve a combined turnover of $44m and a market share of 63% of Trade Area spending directed to supermarkets.

Table 3.2 summarises the above supermarket assessment.

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Table 3.2: Supermarket Development Potential – Full Development, 2038

Category Value Full Development

FLG spending by catchment residents directed to supermarkets $56.2m

Market share 63%

FLG spending retained $35.4m

Plus FLG turnover from beyond the catchment (@15%) $6.2m

Total supermarket FLG turnover $41.6m

Plus non-FLG turnover (@ 6%) $2.7m

Total estimated supermarket turnover $44.3m

Supportable supermarket floorspace 5,300m2

Average supportable supermarket turnover ($/m2) $8,360/m

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Source: MarketInfo; Essential Economics Note: Figures are in constant 2015 dollars

Based on the above assessment, it is recommended that planning for the Kingfisher Town Centre take into consideration the following:

An expansion area adjacent to the major supermarket site that would allow the Stage 1 supermarket to expand from 3,200m2 to 4,000m2.

An area within the Kingfisher Town Centre that could accommodate a second smaller supermarket should demand eventuate in the longer term. This area should be considered as a subsequent stage to the development of a town centre in Stage 1.

3.2 Specialty Retailing in the Town Centre

The provision of specialty retail floorspace at neighbourhood centres is highly dependent on the level of sales and customer activity generated by the anchor tenant. An overview of the speciality retail floorspace that could be supported at the Kingfisher Town Centre in Stage 1 and upon full development is discussed below.

Kingfisher Stage 1 – 2021

Typically, a supermarket achieving the level of sales identified above would be expected to support speciality retail floorspace in the order of 50%-60% of the size of the supermarket.

However, recent trends in neighbourhood activity centre development indicate that it is becoming increasingly difficult to support a large number of speciality stores and that many new centres are being developed with less than 15 speciality shops. Nevertheless, when planning for activity centres it is important to provide a certain level of flexibility to ensure that when a centre is developed in the future, it can be developed in a manner that reflects the market expectations at the time.

On the basis that a 3,200m2 supermarket at the Kingfisher Town Centre (Stage 1) could support specialty floorspace in the order of 50% of the size of the supermarket, approximately 1,600m2 of specialty retail floorspace should be factored in for planning purposes. This is

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broadly equivalent of up to 15 speciality retail shops which may include fresh food outlets (e.g. bakery, butcher, fruit and vegetable store), takeaway food, pharmacy, hairdresser, and cafés and restaurants.

Therefore, planning for Stage 1 of the Kingfisher Town Centre should accommodate potential for a total of approximately 4,800m2 (rounded: 5,000m2) of retail floorspace.

Full Development – 2038

Allowing for a greater level of flexibility in the extent of speciality retail floorspace that could be supported, having regard for the longer timeframe and the dynamic nature of the retail sector, it is assumed speciality retail floorspace equivalent of up to 55% of supermarket floorspace could be supported once the Trade Area is fully developed. On this basis, the following reflects the anticipated level of supportable speciality retail and total retail floorspace at the Kingfisher Town Centre in 2038:

Supermarket floorspace: 5,300m2

Speciality retail floorspace: 2,900m2

Total retail floorspace: 8,200m2

3.3 Non-retail Floorspace in the Town Centre

In addition to retail activities, neighbourhood centres also accommodate a range on non-retail shopfront businesses. Examples include real estate agents, travel agents, post offices and range of small business including solicitors, conveyances, accountants, tax agents, financial advisors, consultant suites etc. In some circumstances home-based businesses may seek small office space in neighbourhood centres as they expand.

State government policy seeks to expand the range of uses in neighbourhood centres to include a wider variety of commercial office uses. This policy is supported by the MPA, which aims to improve employment sustainability by encouraging local job provision in close proximity to residential communities.

The proportion of non-retail floorspace in neighbourhood centres varies considerably. For example, single-ownership neighbourhood centres in growth areas typically have a relatively low proportion of non-retail floorspace. Previous research indicates that on average, non-retail uses make up just 10% of centre floorspace in growth areas.

In contrast, multiple-ownership centres in more established areas (often in a main-street context) tend to have a greater diversity of uses and a higher proportion of non-retail floorspace. Research undertaken by Essential Economics in various centre studies throughout Melbourne indicates that non-retail floorspace provision can be up to 30%, and sometimes more, of total centre floorspace in some neighbourhood centres. These businesses often take up secondary (low rent) tenancies on the edge of centres, or are found in upper-level premises.

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The extent to which non-retail uses are likely be accommodated in the Kingfisher Town Centre will therefore depend upon factors such as:

Ownership model - single-ownership centre or multiple-ownership centre

Design format - strip orientated or enclosed shopping centre

Business environment - the extent to which the surrounding population generates

demand for business services, and the extent that these demands are met elsewhere

(such as higher order centres in the region).

Levels of entrepreneurship - the extent to which the local population invests in new

business development, and has the appropriate professional and managerial skills.

Having regard for these factors, the following presents a broad estimate of the potential non-retail floorspace that could be accommodated in the Kingfisher Town Centre based on the analysis of supportable retail floorspace presented in the previous Section:

Stage 1 (2021): up to 1,000m2 of non-retail commercial floorspace

Full-development (2038): up to 2,000m2 of non-retail commercial floorspace.

These calculations are based on the types of non-retail businesses (real estate agents, tax agents, accountants, other small businesses etc) that are typically found in neighbourhood centres. The analysis does not include consideration of additional uses that may possibly be co-located with or adjoining activity centres in order to encourage local employment opportunities. For instance, potential may exist for the establishment of a medical centre within the Kingfisher Town Centre, this would be in addition to the non-retail commercial floorspace estimates provided above.

Potential may also exist for a variety of community uses within the town centre.

3.4 Opportunity for Commercial Uses on Melbourne – Lancefield Road

In addition to the retail and non-retail uses identified for the Kingfisher Town Centre, potential exists for a variety of commercial uses to be located with direct frontage to Melbourne-Lancefield Road. These uses would benefit from the anticipated high levels of vehicular traffic that would pass by the site and could potentially serve a wider catchment, including residents of Lancefield and Romsey located to the north.

Potential land uses may include a service station and up to two fast food outlets. In addition, it is understood that an Emergency Services Hub may seek a site with Melbourne-Lancefield Road frontage.

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3.5 Summary of Potential Land Uses in the Kingfisher Town Centre

A summary of the supportable retail and non-retail floorspace at the Kingfisher Town Centre based on the analysis presented in this Chapter is provided in Table 3.3. An indicative estimate of land area requirements is also provided assuming a site coverage of 30%.

Table 3.3: Summary of Development Opportunities in Kingfisher Town Centre, 2020 and 2038

Land Use Kingfisher Stage 1 (2021)

Full Development (2038)

Supermarket 3,200m2 5,300m

2

Major supermarket 3,200m2 3,800m

2

Second smaller supermarket - 1,500m2

Specialty Retail 1,600m2 2,900m

2

Total Retail 4,800m

2

(rounded: 5,000m2)

8,200m2

Non-retail Commercial (1)

1,000m2 2,000m

2

Total Retail and Non-retail Commercial 6,000m2 10,200m

2

Indicative Land Area Requirements (assuming 30% site coverage)

2.0ha 3.4ha

Melbourne-Lancefield Road Uses - Service station - 1-2 fast food outlets - Emergency services hub

- Service station - 1-2 fast food outlets - Emergency services hub

Source: Essential Economics Note:

(1) Should a medical centre be attracted to the centre, this would be in addition to the non-retail

commercial floorspace stated in the Table.

It is important that the long-term planning for the Kingfisher Town Centre provides flexibility to ensure that the centre is developed in manner that reflects the market characteristics and the needs of the surrounding community at the time of development.

3.6 Implications for the Role of the Kingfisher Town Centre

The indicative development schemes identified above for both Stage 1 and at full-development remain consistent with the expectations for centres serving a neighbourhood role. For instance, a general description of ‘large neighbourhood centres’ provided by HillPDA in the Retail and Economic Assessment for PSP74 and PSP75 (Sunbury Township) (October, 2014) which informed the planned activity centre hierarchy in the Lancefield Road PSP is provided below:

“Large neighbourhood centres generally accommodate between 5,000- 10,000sqm of retail floorspace and are anchored by at least one full-line supermarket that is complemented by a range of specialty store retailing (typically 20-40 stores) which predominantly provides for convenience goods, retail services,

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café / restaurant space and a limited range of discretionary retailing.” (emphasis added, p. 44)

HillPDA (p. 44) also provide the following in relation to indicative retail uses in ‘large neighbourhood centres’:

The provision of one large and one small supermarket, and a total of 8,200m2 of retail floorspace at the Kingfisher Town Centre at full-development aligns with the general expectations of a large neighbourhood centre.

Therefore, while at full-development the Kingfisher Town Centre may contain more than the identified 5,000m2 of retail floorspace as identified in the HillPDA report (p. 74), it will continue to serve a neighbourhood role. This is important in the context of supporting other larger centres in the surrounding areas. Catchment residents will continue to visit larger centres such as the two planned sub-regional centres and the Sunbury Town Centre for higher-order shopping, a wider choice in retailers, and other facilities and services.

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4 K I N G F I S H E R TOW N C E N T R E E M P LOY M E N T

O U TC O M E S

When fully developed, and assuming the eventual development outcome at the Kingfisher Town Centre reflects that identified in this report, potential exists for total direct employment of an estimated 520 people on an ongoing basis, including full-time, part-time and casual positions. Measured as Full-time Equivalent (FTE), this amounts to approximately 390 FTE jobs. Employment associated with land uses along Melbourne-Lancefield Road would be in addition to these estimated employment outcomes.

Table 4.1 summarises the potential direct employment outcomes of the Kingfisher Town Centre at full development. Estimates of employment are based on the following industry benchmarks:

Supermarket: one job per 20m2 of retail floorspace

Speciality retail: one job per 30m2 of retail floorspace

Non-retail: one job per 25m2 of non-retail speciality floorspace

Table 4.1: Estimated Ongoing Employment at Kingfisher Town Centre at Full Development

Land Use Estimated Jobs

(FTE)

Supermarket 270 (180 FTE)

Specialty Retail 130 (100 FTE)

Non-retail 120 (110 FTE)

Total jobs 520 (390 FTE)

Source: Essential Economics Note: FTE: Full-Time Equivalent jobs. Figures rounded

In addition to this ongoing direct employment, significant indirect or ’flow-on’ employment benefits would be generated for the wider economy.

According to Australian National Accounts information, the employment multiplier for the retail sector is 1.9. Thus, for every ten retail jobs directly created, another nine are indirectly created in the wider economy through the multiplier effect. On this basis, up to an estimated 250 FTE indirect jobs would be created in the local and wider economy as a result of the proposed retail development of the Kingfisher Town Centre.

Table 4.2 summarises the analysis of indirect employment for all FTE jobs at the proposed Kingfisher Town Centre and shows that a total of 420 indirect FTE jobs would be generated in the wider economy as a result of the proposed centre. Table 4.2 also provides an overview of total employment stimulated by the development of Kingfisher Town Centre at full development.

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Table 4.2: Direct and Indirect Employment Generation at Kingfisher Town Centre at Full Development

Land Use Direct FTE Jobs Multiplier Indirect FTE Jobs Total FTE Jobs

Total retail 280 1.9 250 530

Non-retail 110 2.5 170 280

Total jobs 390 2.1 420 810

Note: Job figures rounded Source: Essential Economics; ABS, Input-Output table, Cat No: 5209

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5 S U M M A RY O F K E Y F I N D I N G S

The key findings derived from the analysis presented in this report are described below:

1 Strategic support for the Kingfisher Town Centre: The location of the Kingfisher Town Centre is supported by research prepared by HillPDA as input the preparation of the Lancefield Road PSP. Additionally, the HillPDA report supports retail development up to 5,000m2 of retail floorspace.

2 An established Trade Area population: The Kingfisher Town Centre will serve the communities of Goonawarra and Rolling Meadows, which combined have a population of approximately 5,410 residents. This established population will provide the opportunity for the Kingfisher Town Centre to be developed in the early stages of the overall development.

3 Strong growth in the Trade Area population: Upon the completion of Kingfisher Stage 1 which is anticipated to occur in 2021, the Trade Area population is forecast to be approximately 7,140 residents. Once the Trade Area is fully developed, the Trade Area will have a population of approximately 13,920 residents.

4 Summary of development potential at the Kingfisher Town Centre: The Table below summaries the potential level of supportable retail and non-retail uses at the Kingfisher Town Centre upon the completion of Stage 1 and at full development.

Land Use Kingfisher Stage 1 (2021)

Full Development (2038)

Supermarket 3,200m2 5,300m

2

Major supermarket 3,200m2 3,800m

2

Second smaller supermarket - 1,500m2

Specialty Retail 1,600m2 2,900m

2

Total Retail 4,800m

2

(rounded: 5,000m2)

8,200m2

Non-retail Commercial (1)

1,000m2 2,000m

2

Total Retail and Non-retail Commercial 6,000m2 10,200m

2

Indicative Land Area Requirements (assuming 30% site coverage)

2.0ha 3.4ha

Melbourne-Lancefield Road Uses - Service station - 1-2 fast food outlets - Emergency services hub

- Service station - 1-2 fast food outlets - Emergency services hub

Source: Essential Economics Note:

(1) Should a medical centre be attracted to the centre, this would be in addition to the non-retail

commercial floorspace stated in the Table.