Noarlunga Regional Centre Station Precinct Supply and Demand Study

Transcription

1 Noarlunga Regional Centre Station Precinct Supply and Demand Study Final Report June 2014

2 hudson howells june 2014 TABLE OF CONTENTS EXECUTIVE SUMMARY INTRODUCTION RESIDENTIAL ANALYSIS INTRODUCTION POPULATION PROFILE AND PROJECTIONS HOUSEHOLD STRUCTURE HOUSEHOLD OCCUPANCY RESIDENTIAL DWELLING SALES ACTIVITY FORECAST HOUSING MARKET TRENDS SUPPLY AND DEMAND SUMMARY RETAIL ANALYSIS INTRODUCTION REGIONAL CONTEXT/HIERARCHY CURRENT SUPPLY/TRENDS ANALYSIS OF POPULATION AND RETAIL AREA SPENDING DEMAND FORECASTS SUPPLY AND DEMAND SUMMARY RETAIL TURNOVER AND MARKET POTENTIAL Key Assumptions Estimated Turnover Calculation Escape Expenditure Calculation Retail Market Potential OFFICE AND SERVICES ANALYSIS INTRODUCTION... 40

3 hudson howells june REGIONAL CONTEXT EMPLOYMENT PROFILE Employment containment and sufficiency Industry of employment Method of travel to work CURRENT BENCHMARKING CURRENT SUPPLY CURRENT MARKET INDICATIONS CURRENT DEMAND STRATEGIC CONSIDERATIONS APPENDIX FIGURE A.1 - AVERAGE PER CAPITA EXPENDITURE GROWTH CALCULATION (SOUTH AUSTRALIA) FIGURE A.2 ESTIMATED TOTAL EXPENDITURE MARKET FOR NORTH COAST SLA... 57

4 hudson howells june 2014 executive summary 1 EXECUTIVE SUMMARY Overview Hudson Howells has been engaged by the City of Onkaparinga to undertake research and an initial demand assessment for residential, retail and commercial development at a new commercial centre at the Noarlunga Regional Centre Station Precinct. The demand assessment, based on desktop research and the adoption by Council of an intensive urban renewal strategy, identifies potential future development opportunities at the Station Precinct and broader Noarlunga Regional Centre over the next 5 to 10 years including: Residential development incorporating up to 60 to 70 apartments per annum over 5 years based on highly focused marketing to key community segments that might be attracted to specific residential precincts (e.g. café, retail, education and retirement precincts). Food and non-food retail development of up to 10,980 square metres by 2026 to meet expected demand for floorspace. Office and other services development of up to 77,000 square metres by 2026 to meet expected demand for floorspace. These potential demand scenarios offer an outstanding opportunity for Council and the development sector to plan for and design new forms of integrated urban development at the Noarlunga Regional Centre to meet changing community and business needs. Such urban development will require: Understanding market demand and segmentation that can drive intensive urban residential development at the Noarlunga Regional Centre; and Understanding the key drivers of general urban development including, for example, current economic conditions, availability of employment and development of advanced business infrastructure.

5 hudson howells june 2014 executive summary 2 Most importantly, matching of the Noarlunga Regional Centre s strengths to segmented market demand will identify opportunities for new forms of housing that will facilitate intensive urban renewal (as opposed to traditional urban infill). This will in turn, facilitate an exciting and achievable Vision for the Centre. While it has not the intention of this specific study to determine that vision and ultimate built form, the following examples are provided of potential sub-precincts and communities (high level market segments) based on Noarlunga Regional Centre s key attributes of access to transport, retail, health and education services. Each will have implications for longer term housing form. Examples of Potential Sub-Precincts Retail Precinct Colonnades Transport Precinct Station Precinct Health Precinct Noarlunga Hospital Education Precinct TAFE Entertainment/Nightlife Precinct Development Potential Restaurant/Cafe Precinct Development Potential Examples of Relevant Communities/Market Segments Couples, childless young couples and retirees Commuting singles, young couples and single parents Retirees and aged care Noarlunga TAFE and city students Singles and childless young couples Singles, young couples and retirees Compact apartment and potentially townhouse style developments with 1 3 bedrooms would support the attraction of these communities and development of the associated sub-precincts. Integration of residential development in these sub-precincts could deliver intensive urban renewal at the Noarlunga Regional Centre. For example, apartment style housing above or next to a renewed retail precinct or new commercial precinct, or student accommodation above or next to a renewed TAFE/education sub-precinct. Supported by appropriate place making by Council and State Government (e.g. landscaping, street furniture, street art, etc.), these sub-precincts could become the

6 hudson howells june 2014 executive summary 3 drivers of intensive urban renewal at the Noarlunga Regional Centre incorporating the Station Precinct. Council could consider the following initiatives as part of its longer term strategy for development of the Noarlunga Regional Centre and the Station Precinct: Market research and market segmentation to support a Centre Vision, Urban Development Strategy, Branding and Marketing (i.e. a market driven approach ). Formulation of specific precinct plans based on existing and potential Noarlunga Centre attributes. Feasibility assessment of specific precinct proposals. Government engagement on the development of existing facilities and infrastructure. Land owner engagement on development of facilities in accordance with precinct plans with a specific focus on the integration of residential development into planned renewal programs and apartment style accommodation above and next to facilities. Formulation of an Economic Activation Strategy for business and infrastructure investment attraction consistent with a Centre vision and strategy. Formulation of an Incentives Package to accelerate appropriate business and housing relocation consistent with a Centre vision and strategy. Finally, there are reasons to be optimistic that intensive urban renewal will capture new housing demand as economic conditions improve and the housing market moves into an upward cycle. An exciting vision, strategy and implementation plan for the Noarlunga Regional Centre and the Station Precinct can deliver high investment growth scenarios for the Centre. The specific residential, retail and commercial demand assessment findings of this study are detailed below.

7 Floorspace (sq.m) hudson howells june 2014 executive summary 4 Residential It is assessed that an intensive urban renewal strategy focussed on the Station Precinct could achieve a significant percentage of the forecasted additional annual demand of apartments, flats and units per annum for the Onkaparinga (C) - North Coast SLA over the next 5 years. Assuming that apartments would comprise 50% of this demand, it is concluded that demand for apartments under an intensive urban renewal strategy focussed on the Station Precinct could be in the order of 60 to 70 per annum over the next 5 years. Retail Assuming no future retail developments, the following chart illustrates the estimated future undersupply of retail floorspace within the North Coast SLA. North Coast SLA Retail Floorspace Provision, ,000 85,000 80,000 75,000 Additional Sustainable Floorspace 70,000 65,000 Current Floorspace Provision (70,530 sq.m) 60, Year Source: Hudson Howells. Based on the range of research assumption detailed in this report, there is a current estimated undersupply of retail floorspace within the catchment area of approximately 600 sq.m, increasing to 10,980 sq.m by 2026.

8 Floorspace (sq.m) hudson howells june 2014 executive summary 5 Office and Services Assuming no future commercial developments, the following chart illustrates the estimated future undersupply of commercial (office and services) floorspace. Office and Services Floorspace Provision in the City of Onkaparinga, , , ,000 Additional Sustainable Floorspace 150, ,000 50,000 Current Floorspace Provision (200,240 sq.m) Year Source: Hudson Howells. Based on the range of research assumption detailed in this report, there is estimated to be a future undersupply of commercial floorspace within the City of Onkaparinga of 77,000 sq.m by 2026.

9 hudson howells june INTRODUCTION Hudson Howells has been engaged by the City of Onkaparinga to undertake research and an initial demand assessment for residential, retail and commercial development at a new commercial centre at the Noarlunga Regional Centre Station Precinct. Council requires commercial support for a prospectus being prepared for presentation to potential international and local investors in the Station Precinct. Council also requires justification for State government infrastructure support at the proposed precinct development. The research undertaken to support this initiative and detailed in this report includes: A residential supply and demand analysis incorporating a range of higher density residential forms of development. Commercial supply and demand analysis incorporating retail, office and services sector demand. This residential and commercial supply and demand assessment has been based on desktop research and consultation as required during the project. Importantly, it is noted here that while this assessment identifies current and estimated future supply and demand gaps, primary market research to analyse trends and to determine associated strategies to optimise future residential, retail and commercial outcomes was outside the scope of this current project. It is understood that the findings of this project will be used by Council to inform the Noarlunga Regional Centre Development and specific Station Precinct development strategy including requirements for: Future market research including segmentation analysis. Further concept development. Feasibility assessment and investment attraction.

10 hudson howells june RESIDENTIAL ANALYSIS 2.1 Introduction This section of the report is intended to provide an analysis of population projections compiled by the South Australian Government, demographic and housing profile of the region based on ABS Census Data, and sales history of the housing market in the region including: Historical and forecast population growth; Socio-economic profile; Household profile and formation; Housing market analysis; and Forecast housing market trends. The City of Onkaparinga is the largest South Australian council by population and covers 518 square kilometres of the southern Adelaide metropolitan area, stretching from the industrial areas of Lonsdale to the north, down along the coastline to the coastal community of Sellicks Beach, and the rural landscapes and townships of the north east, central and southern areas. The City comprises seven statistical local areas (SLAs) Hackham, Hills, Morphett, North Coast, Reservoir, South Coast and Woodcroft (refer Map 2.1). The Noarlunga Regional Centre is strategically located within the Onkaparinga (C) - North Coast SLA. Established in the early 1970s, the Centre and is a focus for business/government services and leisure needs, serving the outer southern metropolitan region as well as towns and rural areas in the Fleurieu Peninsula. The Centre incorporates a number of regional services (Noarlunga Health Centre and Hospital, Centrelink, and TAFE campus; retail centres, including the Colonnades Shopping Centre); and is a major public transport interchange, connecting commuter rail and bus services. The Centre is well-connected by key arterial vehicle routes via the Southern Expressway, Main South Road and Lonsdale Road.

11 hudson howells june Map 2.1 Onkaparinga (C) Statistical Local Area Boundaries

12 hudson howells june Population Profile and Projections Historically, the Onkaparinga district has experienced a continued increasing population, reflecting recent urban growth in Woodcroft, Seaford and Seaford Rise. Forecast population growth is expected with ongoing housing developments within limited greenfield and infill opportunities in the southern growth corridor, stretching from Seaford Rise to Sellicks Beach. These developments are estimated to provide around 20,000 dwellings and 45,000 people by around Further residential development after this time will be restricted to infill only due to constrictions by the Urban Growth Boundary. Taking into consideration growth forecasts produced by DPTI, Table 2.1 details relevant forecast population and growth based on the most recent Estimated Resident Population (ERP) data produced by the ABS. Key points to note include: Average annual population growth between 2006 and 2011 within the City of Onkaparinga has been strong, most significantly within the South Coast SLA (5.2% per annum). In comparison, population growth within the Greater Adelaide region and South Australia is estimated at an average of 1.3% and 1.2% per annum respectively over the same five years. Current population data estimates the population in the City of Onkaparinga of nearly 164,700 people in 2011, or 13% of the Greater Adelaide region, and 10% of the South Australian population. Based on official population forecasts, growth within the City of Onkaparinga is expected to continue to increase over the next years, most strongly in the five year period to This expected growth is likely to be as a result of continued residential developments within Seaford Heights and Hackham South. Future population levels within the Greater Adelaide region are growing at a slower rate to 2026.

13 Table 2.1 Onkaparinga (C) Historical and Forecast Population, Estimated Resident Population (ERP) Av. Annual Growth (%) Actual Forecast Actual Forecast Onkaparinga (C) SLAs Hackham 14,177 15,135 17,932 19,214 20, % 3.4% 1.4% 1.1% Hills 11,619 12,479 14,631 16,128 17, % 3.2% 2.0% 1.7% Morphett 23,754 23,365 24,358 24,874 25, % 0.8% 0.4% 0.4% North Coast 17,794 18,828 20,581 22,072 23, % 1.8% 1.4% 1.3% Reservoir 25,848 26,207 27,926 28,560 29, % 1.3% 0.5% 0.4% South Coast 25,895 32,979 38,809 41,835 43, % 3.3% 1.5% 0.6% Woodcroft 35,499 35,682 37,741 38,589 39, % 1.1% 0.4% 0.4% Total Onkaparinga (C) 154, , , , , % 2.0% 1.0% 0.7% Greater Adelaide 1,189,445 1,264,091 1,348,564 1,416,762 1,476, % 1.3% 1.0% 0.8% South Australia 1,567, ,741,092 1,825,451 1,902, % 1.2% 1.0% 0.8% Source: Australian Bureau of Statistics (2014), Regional Population Growth, Australia - Estimated Resident Population, Statistical Areas, South Australia, Cat. No ; South Australian Department of Planning and Local Government (2011), Local Government Area Projections ( ); Onkaparinga City Council (2011), Population by SLA, Onkaparinga, 2011 to 2026.

14 hudson howells june The following points provide an overview of key characteristics of the Onkaparinga (C) North Coast SLA and City of Onkaparinga population compared to the Greater Adelaide statistical area [refer Table 2.2 and Charts 2.1 to 2.3]: Changing age profile within the region reflects the ageing population with migration into the region by younger families. The proportion of dependent residents (those aged younger than 14 years and older than 65 years) is greater within the North Coast SLA when compared to the Greater Adelaide population. Median weekly personal and household incomes reflect a greater proportion of lower-to-middle income earners within the region, most significantly within the North Coast SLA. Household incomes when compared to the Greater Adelaide region are significantly lower than personal incomes due to the greater proportion of lone households and unemployment rates, especially within the North Coast SLA. Above average proportion of residents employed within the City of Onkaparinga, in addition to a higher than average labour force participation. Labour force participation within North Coast SLA reflects an above average dependency ratio. Reflecting the large industrial uses within the City, over 40% of North Coast SLA residents are employed in blue collar occupations, significantly higher when compared to the City of Onkaparinga and the Greater Adelaide region (35% and 30% respectively). As noted earlier, the Noarlunga Regional Centre is a transport hub for public transport, reflected in the proportion of North Coast SLA residents using public transport as a method of travel to work. Nearly half of all North Coast SLA residents (49%) and 41% of City of Onkaparinga residents work within the City of Onkaparinga. Overall, the North Coast SLA is characterised by an ageing population and a higher than average blue collar workforce and proportion of residents employed within the region (compared with other metropolitan regions). There is potential, and a need therefore, for new employment generation within the North Cost SLA as the region s manufacturing sector undergoes transition and a loss of jobs.

15 hudson howells june Table 2.2: Socio-Economic Characteristics, 2011 Onkaparinga (C) - North Coast Total Onkaparinga (C) Greater Adelaide Population 1 : Average Age years 18.0% 19.5% 17.7% years 12.9% 13.1% 13.7% years 26.4% 26.4% 27.2% years 25.8% 27.3% 26.0% 65+ years 16.9% 13.8% 15.5% Dependency ratio % 33.3% 33.2% % Australian Born Residents 70.0% 74.3% 70.2% Income Characteristics: Median Weekly Personal Income $431 $542 $554 Variation from Non-Metro SA -22.2% -2.2% Median Weekly Household Income $816 $1,080 $1,106 Variation from Non-Metro SA -26.2% -2.4% Labour force: Employed 53.0% 62.8% 60.7% % Unemployment 8.8% 5.9% 5.8% % Labour force participation 48.3% 59.1% 57.2% Blue collar workers % 35.0% 30.1% Public transport to work 7.6% 5.9% 8.5% Place of work 4 Onkaparinga (C) 49.3% 41.1% Adelaide (C) 11.0% 12.6% Marion (C) 8.3% 9.3% West Torrens (C) 7.7% 8.2% Mitcham (C) 7.4% 9.4% 1. Based on place of usual residence. 2. Dependency Ratio refers to the proportion of the population aged 0-14 years and 65+ years. 3. Does not include 'Inadequately described/not stated' category. 4. Place of work in South Australia. Does not include undefined and no fixed address categories. Source: Australian Bureau of Statistics, 2011 Census of Population and Housing (Basic Community Profile), Cat. No Census Tables.

16 hudson howells june Chart Comparison of Age Ranges 1, % 25% 20% 15% 10% 5% 0% Onkaparinga (C) - North Coast Total Onkaparinga (C) Greater Adelaide 0-14 years years years years 65+ years 1. Count of Persons based on place of enumeration. Source: Australian Bureau of Statistics, 2011 Census of Population and Housing (Basic Community Profile), Cat. No Census Tables. Chart Change in Age Profile 1, % 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% 0-14 years years years years 65+ years Onkaparinga (C) - North Coast Total Onkaparinga (C) 1. Count of Persons based on place of enumeration. Source: Australian Bureau of Statistics, 2011 Census of Population and Housing (Basic Community Profile), Cat. No Census Tables. In the absence of detailed survey data (and beyond the scope of this project), it is difficult to account for the changing age profile and especially the North Coast SLA s increasing year olds. However, it is possible due to new affordable housing opportunities and some level of gentrification in the region.

17 hudson howells june Chart 2.3 Net Migration of Onkaparinga (C) Residents 1, Marion (C) Mitcham (C) Adelaide - West Adelaide - North Unley (C) Holdfast Bay (C) Adelaide - Central And Hills Non-Metro SA 0-14 years years years years 65+ years 1. Based on place of usual residence. Source: Australian Bureau of Statistics, 2011 Census of Population and Housing (Basic Community Profile), Cat. No Census Tables. The above net migration data reveals an important trend for the broader Onkaparinga Council region. The loss of year old residents to Marion, Mitcham, Adelaide and Holdfast Bay requires investigation to determine the underlying reasons for this shift and, if appropriate, what corrective action can be taken by Council and others to arrest this trend. It has important and potentially long term implications for housing and retail demand, including the Station Precinct proposal and the broader Noarlunga Regional Centre development. It may reflect that residents are being attracted by more and/or better housing options closer to the City, or that there is not the diversity of housing in Onkaparinga to meet the changing needs of residents. 2.3 Household Structure Table 2.3 shows the variation in household structure between Onkaparinga (C) North Coast SLA and City of Onkaparinga compared to Greater Adelaide statistical area. This highlights a greater proportion of households in Onkaparinga (C) North Coast comprising single parent families and lone households, while Onkaparinga (C) comprises larger family households. While this issue requires further investigation to determine the underlying reason for the variation, it may reflect historical migration patterns and/or the availability in the North Coast SLA of affordable properties.

18 hudson howells june Table 2.3 Household Structure, 2011 Onkaparinga (C) - North Coast Total Onkaparinga (C) Greater Adelaide No. % No. % No. % Average Household size Household Composition Families: - Couples without children 1,915 25% 17,383 28% 127,894 27% - Couples with children 1,721 23% 19,326 32% 140,835 29% - One parent families 1,192 16% 7,939 13% 55,696 12% - Other families 87 1% 538 1% 5,980 1% Group household 315 4% 1,596 3% 18,663 4% Lone person 2,405 31% 14,327 23% 131,148 27% Household numbers 1 - One 2,405 31% 14,327 23% 131,148 27% - Two 2,692 35% 21,790 36% 163,445 34% - Three 1,107 14% 9,915 16% 74,095 15% - Four % 9,692 16% 70,587 15% - Five 323 4% 3,465 6% 25,797 5% - Six or more 175 2% 1,335 2% 10,355 2% 1. Number of persons usually resident; count of occupied private dwellings. Source: Australian Bureau of Statistics, 2011 Census of Population and Housing (Basic Community Profile), Cat. No Census Tables. 2.4 Household Occupancy Tables 2.4 and 2.5 show the variation in household occupancy between Onkaparinga (C) North Coast SLA and City of Onkaparinga compared to Greater Adelaide statistical area. This highlights a greater number of public housing tenants within the North Coast SLA, and greater homeownership within recent residential developments within the City of Onkaparinga. House ownership within the North Coast SLA is below average in comparison to the Greater Adelaide region, as is average household size, reflecting the older age profile in the Region. In comparison, home ownership with the City of Onkaparinga is higher than average, reflecting a greater proportion of home owners making mortgage repayments. Greater proportion of separate houses in both the North Coast SLA and City of Onkaparinga, reflecting historical and traditional housing development within the region.

19 hudson howells june Table 2.4 Household Occupancy, 2011 Onkaparinga (C) - North Coast Total Onkaparinga (C) Greater Adelaide No. % No. % No. % Housing Tenure 1 Owned outright 1,890 26% 17,538 30% 149,888 33% Owned with a mortgage 2,469 34% 26,844 46% 173,179 38% Rented: - Real estate agent 1,011 14% 5,686 10% 53,711 12% - State or territory housing authority 1,076 15% 3,123 5% 29,416 6% - Other landlord type % 5,079 9% 50,465 11% - Total 2,932 40% 13,888 24% 133,592 29% Dwelling Structure Separate house 6,237 83% 54,553 90% 366,912 77% Semi-detached, townhouse etc % 3,396 6% 57,695 12% Flat, unit or apartment 594 8% 2,199 4% 49,413 10% Other dwelling 18 0% 376 1% 1,408 0% Total occupied private dwellings 7,550 60, ,428 Unoccupied private dwellings 715 9% 5,642 9% 41,823 8% Total private dwellings 8,265 66, ,251 Number of bedrooms 2 None % % 1, % One bedroom % 1, % 17, % Two bedrooms 1, % 7, % 96, % Three bedrooms 4, % 35, % 250, % Four bedrooms % 13, % 87, % Five bedrooms % 1, % 12, % Six or more bedrooms % % 2, % 1. Does not include 'Other tenure type' or 'Tenure type not stated'. 2. Does not include Not stated categories. Source: Australian Bureau of Statistics, 2011 Census of Population and Housing (Basic Community Profile), Cat. No Census Tables.

20 hudson howells june Table Change in Dwelling Structure, Onkaparinga (C) - North Coast No % of total No. % of total No. % of total Av. Annual growth Separate house 5,780 81% 6,021 85% 6,235 83% 0.8% Semi-detached, townhouse etc % 393 6% 701 9% -1.7% Flat, unit or apartment 469 7% 664 9% 594 8% 2.4% Other dwelling 50 1% 33 0% 18 0% -9.7% Dwelling structure not stated % Total occupied private dwellings 7,147 7,114 7, % Av. Annual growth -0.1% 1.2% Total Onkaparinga (C) Separate house 48,228 90% 50,542 90% 54,553 90% 1.2% Semi-detached, townhouse etc. 3,296 6% 2,660 5% 3,396 6% 0.3% Flat, unit or apartment 1,571 3% 2,436 4% 2,199 4% 3.4% Other dwelling 434 1% 318 1% 341 1% -2.4% Dwelling structure not stated % Total occupied private dwellings 53,683 55,963 60, % Av. Annual growth 0.8% 1.6% Greater Adelaide Separate house 332,449 76% 348,217 78% 366,911 77% 1.0% Semi-detached, townhouse etc. 55,939 13% 52,428 12% 57,696 12% 0.3% Flat, unit or apartment 43,188 10% 46,038 10% 49,414 10% 1.4% Other dwelling 1,967 0% 1,600 0% 1,226 0% -4.6% Dwelling structure not stated 2, % Total occupied private dwellings 435, , , % Av. Annual growth 0.6% 1.2%

21 hudson howells june Residential Dwelling Sales Activity The following points provide an overview of key characteristics of recent dwelling sales activity within the City of Onkaparinga [refer Charts 2.4 to 2.7]: An average quarterly median house price growth within total North Coast SLA suburbs of 0.4% per quarter between 2012 and Recent increase in residential building approvals growth after a high of 39% per annum growth in the City of Onkaparinga between 2007 and The highest number of residential building approvals occurred between 2007 and Average building costs for residential dwellings in City of Onkaparinga have increased by an average of 4.8% per annum since 2001, compared to 5.7% for South Australia, potentially reflecting a different mix of housing developments in the Onkaparinga region compared with broader South Australia (e.g. a higher rate of greenfield development). Chart 2.4 Average Quarterly Growth in Median House Price, % 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% Q Q Q Q Q Q Q Q Christie Downs Noarlunga Downs Port Noarlunga Christies Beach O'Sullivan Beach Av. North Coast SLA Suburbs Source: REISA SA Median House Prices

22 hudson howells june Chart 2.5 Annual Residential Building Approval Growth (No. Of Dwellings), % 40% 30% 20% 10% 0% -10% -20% -30% -40% Total Onkaparinga (C) Total SA 1. Increase/decrease on previous year; Ending June. 3. Total does not include conversions and dwelling units approved as part of alterations and additions or the construction of non-residential building. Source: Australian Bureau of Statistics, Building Approvals, Australia (8731.0). Chart 2.6 Onkaparinga (C) Residential Building Approvals (No. of Dwellings), ,600 1,400 1,200 1, Houses Other Residential Building Note: Total does not includes conversions and dwelling units approved as part of alterations and additions or the construction of non-residential building. Source: Australian Bureau of Statistics, Building Approvals, Australia (8731.0).

23 hudson howells june Chart Average Residential Building Approval Cost Comparison, $250,000 $200,000 $150,000 $100,000 $50,000 $0 Onkaparinga (C) South Australia Note: Building approval values at current prices. 1. Ending June Total does not include conversions and dwelling units approved as part of alterations and additions or the construction of non-residential building. Source: Australian Bureau of Statistics, Building Approvals, Australia (8731.0). 2.6 Forecast Housing Market Trends The following section summarises information obtained from the March 2013 South Australian Housing Industry Prospects Report produced by the Housing Industry Prospects Forum (latest available report): On present trends, a recovery is likely during 2013/14 providing there are no major negative impacts on the economy or changes to Commonwealth and State government policies that would affect the housing market. Pent-up demand is building up and expected to be released during 2013/14. Consumer and producer (builders, etc), remain uncertain about Global economic conditions and their impact on Australia. South Australia s high level of net migration and population change is abating. Premium medium-density developments will remain fairly strong but constrained only by availability of suitable land. High-density dwelling developments to remain steady largely due to the ongoing strong retirement accommodation sector.

24 hudson howells june Locally within the City of Onkaparinga there are a number of developments that are likely to support demand greater than the metropolitan average including the relative affordability of the region, the duplication of the Southern Expressway and the extension and electrification of the Noarlunga Railway line to Seaford. Improved accessibility via these infrastructure projects is likely to impact demand growth positively over the next 10 years. Map 2.2 Onkaparinga Projected Dwelling and Population Estimates To 2032 Source: City of Onkaparinga

25 hudson howells june Supply and Demand Summary The above data and research are used in this section of the report to assess the residential supply and demand balance for the Noarlunga Regional Centre Station Precinct. This is the specific subject area of this study which is located within the Onkaparinga (C) - North Coast SLA. As at 2011, the North Coast SLA had the following characteristics: Total Occupied Dwellings - 7,550 Estimated Resident Population - 18,828 (2.49 per household) Predominantly separate houses - 83%; Semi-detached and townhouses - 9% Apartments, flats, units - 8% A relatively high proportion of privately rented accommodation - 14% (compared with 10% for the Council region and 12% for the Greater Adelaide region) A relatively high proportion of lone person households - 31% (compared with 23% for the Council region and 27% for the Greater Adelaide region) The following dwelling structure trends are important in determining future demand: Table 2.6: Dwelling Structure Trends, Onkaparinga (C) - North Coast Total Onkaparinga (C) Greater Adelaide Average annual increase in total occupied dwellings ,955 Average annual growth rate 0.6% 1.2% 0.9% Market share (of Greater Adelaide) 1.0% 17.3% 100% Average annual increase in separate houses ,446 Average annual growth rate 0.8% 1.2% 1.0% Market share (of Greater Adelaide) 1.3% 18.4% 100% Average annual increase in semi detached and townhouses Average annual growth rate -1.7% 0.3% 0.3% Market share (of Greater Adelaide) n/a 5.7% 100% Average annual increase in apartments flats and units Average annual growth rate 2.4% 3.4% 0.3% Market share (of Greater Adelaide) 2.0% 10.1% 100%

26 hudson howells june Note: Other and Not Stated both declined The following 5 year forecasts are made for dwelling growth in the Onkaparinga Council region based on the historical annual growth rates between 2001 and 2011: Table 2.7: Dwelling Growth Forecasts, Occupied dwellings Separate houses Semi Detached & Townhouses Apartments, flats & Units Current sales data are another indicator of current demand with the following sales recorded over the last 12 months to 15 th May 2014 for the Onkaparinga Council area 1 : 60 houses ($335,000 median sales price) 197 units2 ($239,000 median sales price) Based on the above analysis, it could be expected that the demand for apartments in the subject area would be less than 70 per annum and in the order of 30 to 40 per annum considering flat and unit creation and ongoing sales trends. However, these projections are for existing demand led residential development in the subject area based on past trends. However, Council is looking at attracting more residential growth than these forecasts in order to deliver urban renewal objectives in the Station Precinct. The objectives of a static analysis as undertaken above ignore important future questions and trends such as: What kinds of innovative new forms of housing product could allow an increased apartment target to be contemplated i.e. a market driven as opposed to a supply driven approach? 1 Source: RP Data 2 Other than single houses as defined by RP Data

27 hudson howells june What new forms of residential product can be pursued to boost the overall housing projections? Are there any other products that might help build regional demand? What could Council do to boost demand, in particular what policies or initiatives could be incorporated into the implementation plan? Overall, it is considered that the above desktop analysis offers a body of work that provides a valid basis for demand projections. However, it is also important to consider: Higher growth scenarios consistent with more Intensive Urban Renewal objectives for the Station Precinct; and More innovative urban renewal strategies to deliver Intensive Urban Renewal objectives of for the Station Precinct. In terms of meeting Council s objectives for the Station Precinct, there is a major gap between the above statistical demand extrapolation, which predicts future urban development growth based on existing market trends, market shares and more traditional urban infill development (i.e. scenarios that are supply driven based on historical patterns) and what might be possible and lead to higher growth scenarios associated with consideration of more innovative and intensive urban development strategies a market driven methodology based on an innovative approach to the Station Precinct development. This could involve higher residential and medium/higher density forecasts based on: 1. Increasing Council s market share of Greater Adelaide s apartment growth from 10% to 15%. This assumption is adopted on the basis that accelerated growth (under an Intensive Urban Renewal objective for the Station Precinct) is more likely to be in apartments, units etc. than the traditional separate and semidetached houses. 2. Increasing Onkaparinga (C) - North Coast SLA share of Council s apartment, flat and unit growth from 20% to 50% reflecting a desired intensive urban development

28 hudson howells june focus on the Station Precinct, and increasing its market share of Greater Adelaide s growth from 2% to 7.5%. These extended high growth scenarios for new housing units in the Onkaparinga (C) - North Coast SLA produce the following changes to the trend findings: Table 2.8: Revised Dwelling Growth Forecasts, Original Apartments, flats & Units Revised Apartments, flats & Units These higher growth scenarios are still, however, considered conservative in the context of planned intensive urban renewal of the Station Precinct. Depending on Council s ultimate Vision for the Precinct and implementation strategy, the following Intensive Urban Renewal growth scenarios are considered appropriate for consideration by Council for the Onkaparinga (C) - North Coast SLA: Table 2.9: Intensive Urban Renewal Revised Dwelling Growth Forecasts, Original Apartments, flats & Units Revised Apartments, flats & Units Intensive Urban Renewal (Additional 20%) In conclusion, it is assessed that an intensive urban renewal strategy focussed on the Station Precinct could achieve a significant percentage of the forecasted additional annual demand of apartments, flats and units per annum for the Onkaparinga (C) - North Coast SLA over the next 5 years. Assuming that apartments would comprise 50% of this demand, it is concluded that demand for apartments under an intensive urban renewal strategy focussed on the Station Precinct could be in the order of 60 to 70 per annum over the next 5 years.

29 hudson howells june RETAIL ANALYSIS 3.1 Introduction This section reviews retailing in regional and local contexts. Forecast supply and demand for retail associated with the Station Precinct is estimated based on a number of factors, including: Current estimated retail supply of competitive importance; Current and forecast population growth within the local area; and Current and forecast retail spending. 3.2 Regional Context/Hierarchy The following map (Map 3.1) outlines the activity centres with the City of Onkaparinga. Noarlunga Regional Centre: a focus for business/government services and leisure needs, serving the outer southern metropolitan region as well as towns and rural areas in the Fleurieu Peninsula. The centre incorporates a number of regional services (health, Centrelink, and tertiary education), retail, and is a major public transport interchange. Seaford District Centre: opened in the 1990s, the Seaford Rail Extension provides increased public transport access to the Seaford District Centre. The centre comprises the Seaford Shopping Centre (a sub-regional shopping centre of approximately 20,500 sq.m), education (Government and non-government schools), child care, and recreation. Aldinga District Centre: located within the southern limits of the City of Onkaparinga, the Aldinga District Centre comprises the Aldinga Shopping Centre (approximately 8,550 sq.m), library and community training centre. Commercial and community uses include health (GP Plus), recreation centre, Police station, vet and offices. Aberfoyle Park Hub: comprises retail (including three large supermarkets and associated specialty shops), education, recreation, commercial floorspace, and bus interchange.

30 hudson howells june Map 3.1 City of Onkaparinga Activity Centres

31 hudson howells june Current Supply/Trends The competitive framework provides an overview of the estimate of current retail floorspace supply of competitive relevance. Total estimated retail floorspace within the North Coast SLA, and further to include those centres of competitive relevance to the SLA, is provided in Table 3.1 and presented visually in Map 3.1. This total is used later to calculate under/oversupply of floorspace within the catchment area. We note that this analysis is based on desktop research using available sources, including the Property Council s Shopping Centre Directory 2014 and previous activity centre and development research. Table Competitive Framework within the City of Onkaparinga Centre Regional Centre: Distance (km) Gross Leasable Area (GLA) Noarlunga Subregional Centre: Key tenants Big W, Kmart, Myer, Coles, Woolworths Seaford Big W, Woolworths, Foodland Reynella Target, Coles Neighbourhood Centre: Christie Downs Supermarket Christies Beach Woolworths Hackham Woolworths Morphett Vale Village Woolworths Morphett Vale Plaza Foodland

32 hudson howells june Map 3.2 Competitive Retail Centres 3.4 Analysis of Population and Retail Area Spending In order to estimate the future market potential for any future retail development within the Noarlunga Regional Centre Station Precinct, the total retail expenditure generated by residents needs to be assessed.

33 hudson howells june Current retail expenditure growth has been based on the following industry subsections of total retail turnover, as estimated by the ABS (not including the Household goods retailing subsection): Food retailing (less Liquor) Liquor retailing Cafes, restaurants and takeaway food services Clothing, footwear and personal accessory retailing Department stores Other retailing The methodology for calculating per capita retail spending growth is provided in Figure A.1 in the Appendix. As shown in Table 3.2, in South Australia real growth in per capita retail spending (i.e. not taking population growth or inflation into consideration) was highest in food retail between 2009 and 2013 (+2.3%). Over the same period, there was an average annual decrease in per capita expenditure on total retail of approximately 0.4% per annum, reflecting the decrease in non-food retail expenditure, most significantly clothing and accessories (-4.6%). Table Retail Trade Expenditure, South Australia 1 Total Food Total Nonfood Total Retail 2010 dollars - total ($m) 8, , , per capita ($) 5,321 3,233 8, (in 2013 dollars) - per capita 5,514 3,403 8, dollars - total ($m) 9, , , per capita ($) 5,806 2,993 8,799 Av. Annual Growth Rate ( ) 1.7% -4.2% -0.4% 1. As at June. Source: Australian Bureau of Statistics, Retail Trade, Australia, Cat. No Retail Turnover, State by Industry Subgroup, Original; Australian Bureau of Statistics, Consumer Price Index, Australia, Cat. No CPI: Groups, Index Numbers by Capital City. The Household Expenditure Survey, , produced by the ABS, provides the data for calculating retail expenditure within the North Coast SLA. Detailed expenditure items for South Australia used from the HES are provided in Table A.2 in the Appendix.

34 hudson howells june Taking both calculated average annual growth in per capita expenditure in each industry subgroup (as calculated in Table 3.2) and 2010 average household expenditure into consideration, calculated total expenditure on household goods retailing within the catchment area in 2013 is shown in Table 3.3. The methodology for calculating total expenditure market is provided in Figure A.2 in the Appendix. Table 3.3 North Coast SLA Retail Expenditure, Total Food Total Nonfood Total Retail 2010 dollars per SA household - per week ($) $ $ $ per annum ($) $11,486 $7,474 $18, (in 2013 dollars) - per h hold p.a. $11,987 $7,811 $19,798 Av. Annual Growth Rate ( ) 1.7% -4.2% -0.4% 2013 dollars - per capita ($) $12,512 $6,862 $19,374 - North Coast SLA h hold p.a ($) $10,101 $5,539 $15,640 - total North Coast SLA ($m) $85.7 $47.0 $ total North Coast SLA (per cap.) $4,392 $2,408 $6, As at June. Source: Australian Bureau of Statistics, Retail Trade, Australia, Cat. No Retail Turnover, State by Industry Subgroup, Original; Australian Bureau of Statistics, Consumer Price Index, Australia, Cat. No CPI: Groups, Index Numbers by Capital City. Total catchment area expenditure is calculated in the previous Tables 3.2 and 3.3, and based on: Average annual retail expenditure in South Australia in 2009/10 was approximately $18,960 (total retail less household goods); An increase in CPI between June 2010 and June 2013 of 4.2%, or an average 1.4% per annum; Real growth in turnover in the industry subgroups of between 2.3% and -4.6% in South Australia (total retail = -0.4%) over the period June 2010-June 2013; Difference in estimated average household income of approximately -19.3% between the North Coast SLA and South Australian average in 2013; and An average household size of 2.3 people and ERP population of 19,500 people (as at June 2013) within the North Coast SLA. Current annual retail expenditure by North Coast SLA residents is therefore calculated at $132.7 million, or around $6,800 per capita (as at June and in current $2013).

35 hudson howells june Demand Forecasts Growth in retail expenditure can be expected to increase in the future based on a combination of the following key factors: Real growth in retail expenditure (i.e. increased propensity of retail consumption above inflation); Change in population; and Price inflation (i.e. changes in CPI). Based on historical retail expenditure growth, future estimated retail expenditure generated by the defined catchment area to 2021 has been calculated based on the following assumed growth rates: Increasing average annual real expenditure growth, estimated on historical growth rates: o : 1.7% food and -4.2% non-food 3 o : 2.1% food and 0.3% non-food o : 2.5% food and 1.0% non-food; and Average annual population growth, based on official population forecasts, as shown in Table 2.1. We note that the following forecast provided in Table 3.4 is in current $2013 that is, it does not include inflation or account for potential fluctuations in economic cycles over this period. 3 The trend decline in non-food spending is consistent with national trends associated with the post-gfc era and the impact of online shopping

36 hudson howells june Table 3.4: Catchment Area Expenditure, Per Capita Expenditure: Food Non-Food Total Retail ,392 2,408 6, ,625 2,119 6, ,123 2,146 7, ,797 2,255 8,052 Total Catchment Area Expenditure: As at June. Source: Australian Bureau of Statistics, Household Expenditure Survey, Australia, Cat. No Detailed Expenditure Items, ; Australian Bureau of Statistics, Consumer Price Index, Australia, Cat. No CPI: Groups, Index Numbers by Capital City; Australian Bureau of Statistics, 2011 Census of Population and Housing, Cat. No Census Tables. As shown in Table 3.4, total expenditure on total retail by North Coast SLA residents is calculated at $160.4 million in 2021, or around $7,269 per capita. 3.6 Supply and Demand Summary The following calculation is based on a number of variable inputs: Floorspace provision of 2.2 sq.m per person 4, due to the level of convenience offered within the North Coast SLA including the large provision of retail floorspace within Colonnades; Estimated current floorspace provision of around 70,000 sq.m, including an estimated sq.m of retail located in the Beach Road, Christies Beach retail strip and 2,000 sq.m of small convenience-based retailing provision spread throughout the SLA; and Estimated trade from beyond the SLA of 40% due to the regional nature of Colonnades, and the proximity of the centre to the Fleurieu regional areas and main road access via South Road/Southern Expressway. 4 Common industry benchmark for floorspace per capita

37 hudson howells june Based on these inputs, Table 3.5 details the current supportable household goods floorspace in the catchment area. Initial calculations indicate that the North Coast SLA is oversupplied with 27,600 sq.m of retail floorspace. However, this initial calculation does not take into consideration trade from beyond attracted to the SLA by Colonnades. Including an estimated 55% trade from beyond the SLA, it is estimated that the SLA is currently well supplied with retail floorspace provision. Table 3.5: Current Sustainable Floorspace Provision Input Unit Factor (1) North Coast SLA population No. 19,511 (2) Floorspace provision per capita Sq.m 2.2 (3) = (1) * (2) Sustainable floorspace Sq.m 42,920 (4) Current floorspace provision Sq.m 70,530 (5) = (4) - (3) Floorspace under/oversupply Sq.m 27,610 (6) = (5) / (4) Floorspace catered for beyond North Coast SLA 39.1% Estimated trade from beyond North Coast SLA 55% Estimated supportable floorspace Sq.m 71,132 Updated floorspace under/oversupply Sq.m Based on turnover of $295 million (see Table 3.8) and approximately $4,150 per sq. m trading performance. 3.7 Retail Turnover and Market Potential Key Assumptions Inputs for calculating future potential of a retail development within the North Coast SLA have been calculated in previous sections, and include: Current and forecast population within the catchment area (Section 2); Current and forecast per capita expenditure on household goods by catchment area population (Section 3); and Current estimates of retail floorspace provision within the catchment area (Section 3). In addition, ABS data are used as follows:

38 hudson howells june Industry of employment (by place of employment), as detailed in 2011 Census tables, indicates a total of 1,920 people employed in food retailing, other storebased retailing, and retail trade (undefined). Based on an estimated increase in employment between 2006 and 2011 of 110 employees over the five years, retail employees within the catchment area in 2013 is estimated at 1,984 employees. Calculation of current estimated retail turnover within the North Coast SLA has been based on estimates detailed in the Retailing in South Australia, 1991/92 publication, released by the ABS in 1994, and current retail employees within the catchment area. We note that retail turnover data for Noarlunga (C) SLA, the comparable statistical area to the current North Coast SLA, was described as Total Shopfront, which is interchangeable with Retail. The following subsections estimate further inputs required for calculating market potential for additional retail provision within the North Coast SLA estimated current retail turnover and estimated expenditure from beyond the North Coast SLA Estimated Turnover Calculation The following two tables estimate current turnover by retailers within the SLA catchment area: Table 3.6 calculates turnover, floorspace and employees within the catchment area in 1992 (based on key assumptions outlined previously). Table 3.7 calculates current estimated retail turnover based on employee productivity ratios (as calculated in Table 5.1). We note that estimated turnover is inflated to 2013 dollars using index rates as at June 1992 and June 2013.

39 hudson howells june Table 3.6: Estimated Retail Turnover, 1991/92 Food South Australia Non- Food Total Retail Food Catchment Area Non- Food Total Retail Turnover ($m) 3,549 2,878 6, Floorspace ('000 sq.m) 1,096 1,270 2, Employees (no.) 5 42,251 33,357 75,608 2,239 1,384 3,623 % employees of shopfront % 44.1% 61.8% 38.2% $ per sq.m 3,238 2,266 2,716 3,652 2,052 2,767 sq.m per employee Source: ABS, Retailing in South Australia , Cat. No Table 3.7: Estimated Catchment Area Retail Turnover, 1992 and Turnover ($m) 1 Food Non-food Total Retail Shopfront $ $ $2013 per 1992 employee 2 162, , , : Employees 1, ,984 Turnover ($m) Total retail sales as defined in ABS Retailing in South Australia 1991/92, Cat. No Based on number of employees in 1992 (as detailed in Table 3.6) and 1992 turnover in $2013. Source: ABS Retailing in South Australia 1991/92, Cat. No ; Australian Bureau of Statistics, Consumer Price Index, Australia, Cat. No CPI: Groups, Index Numbers by Capital City. Key points to note from Tables 3.6 and 3.7 include: Performance of retailing in the catchment area is comparable to the South Australian trading level of around $2,700 per sq.m. Floorspace provision per employee in the catchment area is comparable for total retail when compared to the South Australian provision of floorspace, though higher for non-food retail floorspace reflecting a higher level of non-food floorspace in the SLA, primarily within the Colonnades Shopping Centre. 5 Noarlunga SLA Boundaries changed in 1996 but ratios used for 2013 calculations 6 Excluding bulky goods and other non-retail services

40 hudson howells june Escape Expenditure Calculation Table 3.8 estimates the amount of retail expenditure retained within the catchment area in These estimates are based on expenditure calculations estimated previously in this section and turnover from Table 3.7, and assumed trade from beyond the catchment area of 55% of total turnover, reflecting the role of the Noarlunga Regional Centre within the southern region of metropolitan Adelaide and the Fleurieu peninsula. Table 3.8: Estimated Escape Expenditure, 2013 Total Retail Food Non-food Shopfront Turnover ($m) Trade from beyond catchment: - % of trade from beyond 60% 55% 55% - $m of trade from beyond Turnover from catchment area ($m) Expenditure ($m) Net escape expenditure ($m) % expenditure retention 93% 92% 93% Source: Hudson Howells As shown in Table 3.8, retention of total retail expenditure by catchment area residents is estimated at 93%. It is unlikely that the limited expenditure flowing out of the region could have changed since the Retailing in South Australia document was produced, as there has been limited retail development within the region in the 18 years since the release of the document, with the exception of expansion of Westfield Marion and smaller district retail centres. However, the high level of retail expenditure retention within the catchment area is not surprising considering the size and role of the Noarlunga Regional Centre. It is noted that this does not take into consideration the development of additional retail capacity in the future (e.g. Aldi) Retail Market Potential Table 3.9 presents a status quo scenario of forecast retail floorspace provision from 2013 to 2026, based on the following inputs: Forecast expenditure, as outlined in Table 3.4. Continued expenditure retention by catchment area residents of 93%.

41 Floorspace (sq.m) hudson howells june Slight decrease in trade from beyond the catchment area from 55% to 50% due to future retail development in Seaford Meadows and extension to Westfield Marion trading performance increased from current and future levels to reflect change in real turnover growth. Food retail performance has been calculated to increase by 1% per annum. In comparison, non-food retail trading levels were affected over recent years due to various worldwide economic impacts and as such were calculated following similar increase in forecast expenditure growth, increasing from -2% to 2% by Table 3.9: Catchment Area Retail Floorspace, Expenditure ($m) Forecast turnover Trading level ($ per sq.m) 4,147 4,146 4,266 4,504 Estimated supportable sq.m 71,132 72,357 78,893 84,269 Source: Hudson Howells We note that estimated supportable floorspace detailed in Table 3.9 is a status quo scenario and does not take into consideration any increase in expenditure retention or trade from beyond due to future retail developments within the catchment area. Assuming no future retail developments, Chart 3.1 illustrates the estimated future undersupply of retail floorspace within the North Coast SLA. Chart 3.1: North Coast SLA Retail Floorspace Provision, ,000 85,000 80,000 75,000 Additional Sustainable Floorspace 70,000 65,000 Current Floorspace Provision (70,530 sq.m) 60, Year Source: Hudson Howells.

42 hudson howells june Based on the above calculations, there is a current estimated undersupply of retail floorspace within the catchment area of approximately 600 sq.m, increasing to 10,980 sq.m by A number of factors should be considered when calculating the future market potential for retail development within the Noarlunga Station Precinct, including: A premium in average trading level of the retailer due to factors such as location and brand; and Increase in expenditure by trade from beyond from both visitors to the precinct and commuters from the rail station.

43 hudson howells june OFFICE AND SERVICES ANALYSIS 4.1 Introduction This section of the report is intended to provide an analysis of current office and services (office) floorspace provision within the City of Onkaparinga. As there is currently no database of existing commercial floorspace provision within the council area, this desktop analysis of estimated current floorspace is based on the demographic profile of the region based on ABS Census Data. 4.2 Regional Context The Noarlunga Regional Centre is the key commercial and services hub within the Southern Adelaide metropolitan region. Bus and train interchanges and key arterial routes provide access to the centre from the surrounding region. As shown in Map 4.1, there are a number of key locations throughout the Council area, including District Centres and zoned commercial land: Darlington Aberfoyle Park (District Centre) Old Reynella (includes Township) Reynella (includes Main South Road precinct and District Centre) Woodcroft (includes Neighbourhood Centre) Christies Beach (District Centre) Port Noarlunga Hackham Seaford (District Centre) Aldinga (District Centre) McLaren Vale (Neighbourhood Centre)

44 hudson howells june Map 4.1: Location of Commercial Zoned Activity Centre It is noted that smaller commercial/office floorspace provision is likely throughout the industrial areas of the City of Onkaparinga, attached to industrial/warehousing.