Precinct 15 Landowners Consortium Report - Hobsons Bay Am C88 - Economic Expert Statement - J Ganly - 10 Nov 17

Economic expert witness statement Hobsons Bay Planning Scheme Amendment C88 Precinct 15 Altona North Prepared for Precinct 15 Landowners Consortium 10 November 2017 Deep End Services Deep End Services is an economic research and property consulting firm based in Melbourne. It provides a range of services to local and international retailers, property owners and developers including due diligence and market scoping studies, store benchmarking and network planning, site analysis and sales forecasting, market assessments for a variety of land uses, and highest and best use studies. Contact Deep End Services Pty Ltd Suite 304 9-11 Claremont Street South Yarra VIC 3141 T +61 3 8825 5888 F +61 3 9826 5331 deependservices.com.au Enquiries about this report should be directed to: Justin Ganly Managing Director [email protected] Document Name Precinct 15 Landowners Consortium report - Hobsons Bay Am C88 - Economic expert statement - J Ganly - 10 Nov 17 Disclaimer This report has been prepared by Deep End Services Pty Ltd solely for use by the party to whom it is addressed and by Planning Panels Victoria. Accordingly, any changes to this report will only be notified to those parties. Deep End Services Pty Ltd, its employees and agents accept no responsibility or liability for any loss or damage which may arise from the use or reliance on this report or any information contained therein by any other party and gives no guarantees or warranties as to the accuracy or completeness of the information contained in this report. This report contains forecasts of future events that are based on numerous sources of information as referenced in the text and supporting material. It is not always possible to verify that this information is accurate or complete. It should be noted that information inputs and the factors influencing the findings in this report may change hence Deep End Services Pty Ltd cannot accept responsibility for reliance upon such findings beyond six months from the date of this report. Beyond that date, a review of the findings contained in this report may be necessary. This report should be read in its entirety, as reference to part only may be misleading. Contents 1 Introduction 1 1.1 Background 1 1.2 Instructions 2 1.3 Approach 2 1.4 Expert witness details 3 2 Amendment C88 6 2.1 Overview 6 2.2 CDZ2 7 2.3 CDP 9 2.4 CDP Background Report 13 2.5 Vision Document 14 2.6 Summary 15 3 Consideration of business area 17 3.1 Introduction 17 3.2 CDP land and employment forecasts 17 3.3 Commercial office context 18 3.4 Strategic justification 19 3.5 EE report 20 3.6 Strategic assessment 24 3.7 Implications for CDP 25 4 Consideration of local town centre 26 4.1 Introduction 26 4.2 Proposed planning control 26 4.3 Economic assessment 28 4.4 Implications for the CDP 29 5 Conclusions 30 Appendices Appendix A Curriculum Vitae for Justin Ganly Appendix B Melbourne Suburban Office Market Overview February 2017, Knight Frank Economic expert witness statement—10 November 2017 Deep End Services Tables + Figures Table 1—CDZ2 Table of uses 8 Table 2—Indicative development schedule for transport analysis 13 Table 3— Commercial office supply in Hobsons Bay activity centres 21 Table 4—Indicative commercial office floorspace growth 23 Figure 1—C88 Amendment area 6 Figure 2—Map 1 to Schedule 2 to Clause 37.02 7 Figure 3—Town Centre Concept Plan 12 Figure 4—Melbourne suburban office market indicators 19 Economic expert witness statement—10 November 2017 Deep End Services 1 Introduction 1.1 Background 01 I have been instructed in this matter by Norton Rose Fulbright, acting on behalf of the Precinct 15 Landowners Consortium (“Landowners Group”) in relation to proposed Amendment C88 (“Am C88”) to the Hobsons Bay Planning Scheme. 02 Am C88 has been prepared by Hobsons Bay City Council to facilitate the redevelopment of former industrial land for residential and mixed-use development. 03 The amendment applies to the land generally bounded by the West Gate Freeway, New Street, Blackshaws Road and Kyle Road in the suburbs of Altona North and South Kingsville. 04 This area has been referred to as “Precinct 15” during the planning process, and I continue to refer to it as such in this statement. 05 The Landowners Group is made up of 13 owners of land within Precinct 15. 06 The proposed amendment places most of Precinct 15 within the Comprehensive Development Zone (“CDZ”) and applies Schedule 2 (“CDZ2”) to ensure that future development is generally in accordance with the Altona North Comprehensive Development Plan, June 2017 (“CDP”). 07 Most of the developable area of Precinct 15 is proposed for townhouses and medium rise apartments, containing an eventual population of around 7,000 residents. 08 A “local town centre” is proposed on 2.15ha of land with frontage to Blackshaws Road. The centre is envisaged to include a supermarket, shops and a small component of offices, with opportunities for integrated residential development. 09 A “business area” on 2.86 ha of land is proposed to the west of the local town centre, and is envisaged to contain a significant commercial office component and opportunities for integrated residential development. Economic expert witness statement—10 November 2017 Deep End Services 2 10 I note that an economic assessment of the proposed retail facilities within the local town centre component was prepared by my office in March 2015 and was exhibited along with Am C88. I was not personally involved in that study. 1.2 Instructions 11 My instructions in this matter were provided to me by letter dated 26 October 2017 as follows: • Review this memorandum and the background materials in your brief; • Confer with instructing solicitors and counsel where necessary; • Prepare an expert report that provides your opinion on economic matters associated with the Amendment, specifically: a. The appropriateness of the extent of land designated to the west of the town centre as ‘mixed use/commercial area’ (see Figures 4 and 10 of the Comprehensive Development Plan); b. The appropriateness of the planning controls insofar as they relate to the retail and commercial land, including the requirement to obtain a permit for use of the land as a supermarket; c. Your response to any issues raised in submissions, the Economic Impacts report prepared by SGS Economics & Planning dated September 2015 and the Commercial Office Floorspace Provision report prepared by Essential Economics dated September 2017; and • If required, appear at the Panel Hearing on 20-24 November, 4-8 December and 9-13 December (reserve) for the purpose of presenting your expert opinion concerning these matters. 1.3 Approach 12 In responding to my instructions I have: 1. Visited the site and surrounds. 2. Reviewed the amendment documentation. 3. Reviewed submissions made to the proposed Am C88 by affected parties. 4. Reviewed other background documents including: a. Precinct 15, North Altona, Neighbourhood Activity Centre Economic Impact Assessment (March 2015), prepared by my colleague Chris Abery of Deep End Services (“DES”); b. Precinct 15 Altona North, Economic Impacts Independent Peer Review (September 2015), prepared by SGS Economics and Planning (“SGS”) on behalf of Hobsons Bay City Council; c. Hobsons Bay Activity Centres Strategy Technical Report (December 2016), prepared by Essential Economics (“EE”) 2016 in association with Hansen Partnership and Martyn Group on behalf of Hobsons Bay City Council; and d. Altona North Precinct Commercial Office Floorspace Provision (September 2017), prepared by Essential Economics (“EE”) on behalf of the Victorian Planning Authority (“VPA”). 5. Considered the quantum of land set aside for the business area, in the context of the attributes of the site and other matters relating to the demand and supply of land for office development. Economic expert witness statement—10 November 2017 Deep End Services 3 6. Considered the planning controls relating to the town centre and how these further the aim of providing a local town centre for provision of services to the community. 7. Come to a conclusion as to whether changes to the proposed planning controls should be made to better guide the future development of Precinct 15. 1.4 Expert 13 The following expert witness details are provided as required in Planning Panels witness details Victoria’s Guide to Expert Evidence. Name and address of expert Mr Justin Ganly Managing Director Deep End Services Pty Ltd Suite 304, 9-11 Claremont Street South Yarra Victoria 3141 Expert’s qualifications and experience • Graduate Diploma of Applied Finance & Investment, Securities Institute of Australia. • Bachelor of Engineering (Chemical) (First Class Honours), University of Melbourne. • Managing Director of Deep End Services since 2003. • Retail and property consultant for KPMG, Coopers & Lybrand and Coles Myer from 1993 to 2003. A full CV is included at Appendix 1. Expert’s area of expertise to make report • Activity centre network planning. • Thorough understanding of retail and commercial land use and development patterns throughout Victoria. • Preparation of sales forecasts for new, expanded and refurbished supermarkets. • Market demand analysis for property development including retail, commercial, industrial and residential. • Demographic analysis. • Population and land use forecasting. Other significant contributors to the report I was assisted in the preparation of this report by Matthew Lee, Principal at Deep End Services. Instructions that defined the scope of the report My instructions were received from Norton Rose Fulbright on 26 October 2017 as detailed in section 1.2 of this statement. Economic expert witness statement—10 November 2017 Deep End Services 4 Facts, matters and assumptions upon which the report proceeds Stated in relevant sections of this statement. Documents, materials and literature used in preparing this report Stated in relevant sections of this statement.

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