Port Melbourne Land Use and Activity Study

Prepared for

City of Melbourne, Melbourne Port Corporation and the Department of Sustainability and Environment

July 2003

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TABLE OF CONTENTS 1. EXECUTIVE SUMMARY...... 1 1.1 Business Activity and Patterns of Location ...... 1 1.2 Key Industry Sectors ...... 2 1.3 Advanced Manufacturing...... 3 1.4 Industry Restructuring, Business Reorganisation and the Property Market ...... 4 1.5 Property Market Conditions ...... 4 1.6 Strategic Planning Policy Context ...... 5 1.7 Key Issues ...... 5 1.8 Planning Options ...... 5 1.9 Recommendations...... 6 2. INTRODUCTION ...... 8 2.1 Study Aims...... 8 2.2 Study Objectives...... 8 2.3 Study Area...... 9 2.4 Methodology ...... 9 2.5 Definition of Advanced Manufacturing...... 10 3. STUDY AREA: ANALYSIS OF BUSINESS ACTIVITY AND LOCATION PATTERNS...... 12 3.1 Methodology and Sample...... 12 3.2 Business Activities...... 12 3.3 Business Establishment and Nature of Activities ...... 13 3.4 Outlook for Business Activity (Study Area)...... 14 4. STUDY AREA: KEY INDUSTRY SECTORS...... 16 4.1 Aerospace...... 16 4.2 Automotive...... 17 4.3 Transport and Storage...... 18 4.4 Port of Melbourne ...... 20 4.5 Consultation: Melbourne Port Corporation ...... 21 5. ADVANCED MANUFACTURING: NATURE AND GEOGRAPHIC DISTRIBUTION OF ACTIVITY...... 22 5.1 Nature of Activities...... 22 5.2 Location of Activities...... 22 5.3 Implications for Advanced Manufacturing Activity in the Study Area ...... 22 5.4 Consultation: Department of Innovation, Industry and Regional Development ...... 23 6. INDUSTRY STRUCTURE AND BUSINESS ORGANISATION...... 28 6.1 Industry Restructuring ...... 28 6.2 Business Organisation...... 29 6.3 Location and Property Requirements...... 29 6.4 Industry & Business Clusters...... 30 6.5 Outlook ...... 30 7. INDUSTRIAL PROPERTY MARKET...... 31 7.1 Metropolitan Context ...... 31 7.2 Port Melbourne Industrial Property Market...... 34 7.3 Supply Assessment: Recently Completed Projects ...... 38 7.4 Potential Development Sites ...... 43 8. STUDY AREA: INDUSTRY AND PROPERTY MARKET OVERVIEW ...... 44

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9. STRATEGIC PLANNING: POLICY CONTEXT ...... 46 9.1 Melbourne 2030...... 46 9.2 City of Melbourne: City Plan 2010 and Port Melbourne Structure Plan ...... 48 9.3 Infrastructure Provision: Investing For Our Future ...... 49 9.4 State Planning Policy Framework (Industry) ...... 50 9.5 City of Port Phillip Planning Scheme (Industrial Areas Policy)...... 50 9.6 Melbourne Port Corporation: Port of Melbourne Land Use Plan...... 51 9.7 City of Port Phillip: Port Phillip Industry and Business Strategy...... 51 9.8 Panel Report for the New Format Melbourne Planning Scheme, 1998 ...... 52 10. STATUTORY PLANNING FRAMEWORK...... 56 10.1 Existing Zones and Overlays...... 56 10.2 Amendment C60 to the Melbourne Planning Scheme ...... 57 10.3 Rezoning Activity ...... 59 10.4 Planning Permit Applications...... 59 11. DISCUSSION OF ISSUES ...... 62 11.1 The Policy Role of the Area...... 62 11.2 Difference between the Industrial 1 Zone and the Business 3 Zone...... 62 11.3 Protection of the Port...... 64 11.4 Impact on Existing Industrial Land Uses ...... 65 11.5 Timing Considerations...... 66 11.6 Office Uses and Zoning ...... 66 11.7 Appropriate Zones ...... 67 11.8 Lot Sizes ...... 67 12. PLANNING CONCLUSIONS ...... 69 12.1 Options ...... 69 12.2 Recommendations...... 73 13. APPENDIX 1A: STUDY AREA: DIRECTORY OF BUSINESSES ...... 75

14. APPENDIX 1B: FIRMS RELOCATING OUT OF STUDY AREA 1999-2003 ...... 84

15. APPENDIX 2A: ADVANCED MANUFACTURING (AVIATION, AEROSPACE AND DEFENCE) – CAPABILITY PROFILE ...... 86

16. APPENDIX 2B: ADVANCED MANUFACTURING (INSTRUMENTATION) – CAPABILITY PROFILE...... 93

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1. EXECUTIVE SUMMARY The Study Area1 forms part of the wider Port Melbourne industrial precinct which has evolved into a high profile industrial / corporate location. This has been in response to a range of factors including:

The impact of recent road infrastructure developments upon accessibility between the area and the wider metropolitan region, The development of the Docklands precinct for a range of residential and commercial uses, The restructuring of the manufacturing sector with the increased incidence of outsourcing by major organisations; and The impact of inner city gentrification upon traditional industrial areas within inner Melbourne.

The Study Area has been identified by the City of Melbourne and the Victorian Government as a location for advanced manufacturing. The form of activity and land use that may be supported by such a policy will reflect any definition of advanced manufacturing. Such a definition needs to reflect the ongoing restructuring of the manufacturing sector with increased outsourcing by non- core activities. Such activities may include engineering design activities that may not require traditional industrial accommodation but rather office style accommodation in close proximity to key industrial organisations. This Study has given particular attention to the changing structure of Australia’s manufacturing sector in response to tariff reform and changes in models for business organisation which have given greater emphasis to outsourcing of non-core activities in order to increase organisational efficiency.

1.1 Business Activity and Patterns of Location A key objective of this Study was to identify the types of land uses that are currently occurring within the Study Area, and that are likely to occur in the future. An analysis of existing and emerging forms of activity and land use within the Study Area (refer Section 3) indicates that advanced manufacturing and scientific related activities account for 10% of businesses within the area, while wholesaling and basic manufacturing / engineering account for approximately one- third of businesses. Business service activities account for a further 12% of firms. Study Area - Number of Business by Type of Activity Business Activity No. of Businesses Percent of Total Businesses Wholesaling 42 20.3% Basic Manufacturing / Engineering 28 13.5% Business Services 24 11.6% Advanced Manufacturing / Scientific 20 9.7% Shipping 14 6.8% Media 14 6.8% Property Services 13 6.3% Clothing 11 5.3% Transport & Storage 11 5.3% Retailing 9 4.3% Communications 7 3.4% Recreation 7 3.4% Education 3 1.4% Engineering services 1 0.5% Retail 1 0.5% Food Manufacturing 1 0.5% Restaurants 1 0.5% Total 207 100.0%

1 The Study Area as defined in the Consultant’s Brief is bounded by the West Gate Freeway to the south, the Yarra River to the north and west, and the Charles Grimes Bridge to the east.

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Of the 220 firms identifies as operating within the Study Area, just under half (46%) were operating at the same address in 1999. This compares to 24% which have relocated from other locations within the Study Area (34% of all relocating businesses), Southbank / South Melbourne (20%) and other locations within inner Melbourne (30%). The remaining 30% of businesses within the Study Area represent start–up businesses that have been established since 1999. Study Area - Business Establishments and Relocations by Type of Activity 1999-2003 Business Activity Relocations Relocations Net Change Percent of In / New Out Total Businesses Change Wholesaling 17 6 11 14.7% Business Services 19 2 17 22.7% Property Services 7 1 6 8.0% Transport & Storage 9 6 3 4.0% Basic Manufacturing / Engineering 8 5 3 4.0% Clothing 8 1 7 9.3% Shipping 8 2 6 8.0% Media 9 0 9 12.0% Communications 6 4 2 2.7% Advanced Manufacturing / Scientific 6 2 4 5.3% Retail 1 0 1 1.3% Food Manufacturing 1 0 1 1.3% Engineering services 1 0 1 1.3% Education 2 0 2 2.7% Total 104 29 75 100.0%

An analysis of the net change in the number of businesses by type of activity indicates that business service providers have accounted for over 20% of the total net change in the number of businesses within the Study Area since 1999. Wholesaling and media related activities also account for a significant proportion of new business activity, which may be partly explained by businesses relocating from locations such as South Melbourne, Southbank and non-industrial areas of Port Melbourne where gentrification has reduced the availability of industrial accommodation.

It is expected that the strong trend towards business service providers establishing within the Study Area will continue given the anticipated future rate of growth within this sector, the continued conversion or redevelopment of warehouses for residential uses, together with improvements in the general amenity of the Study Area.

1.2 Key Industry Sectors A number of key manufacturing industries operate in the Study Area with major organisations increasingly supported by smaller businesses reflecting the trend towards outsourcing that has characterised industry development over the past decade. An investigation of the automotive, aerospace and transport and storage sectors (refer Section 4) indicates that these sectors have experienced significant structural change which has impacted upon the nature of their operations and the relationships between firms.

The future growth in the automotive sector will increasingly be determined by the success of car makers in the international marketplace with sales of locally produced cars on the domestic market falling significantly over recent years. Similarly, the future growth of the aerospace sector is also dependent upon its ability to increase its position in the export market, albeit distorted by the involvement of foreign Governments to support local industries and meet national security objectives.

The transport and storage sector has been characterised by an increasing trend towards the outsourcing of logistical requirements by both small and larger organisations resulting in the growth of external providers. The sector has become increasingly sophisticated through the use

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of information and logistical systems to enable the effective management of the logistics chain that encompasses inventory management, storage, information systems, local delivery and transportation.

The transport and storage sector has also benefited from the information revolution via increased opportunities for the development of more effective supply-chain management systems, which in some cases has come at the expense of the retail sector. As firms expand their technology bases and increase production there is an associated increase in the demand for transport and storage facilities. Increased use of the internet for the purchasing of goods will reduce the number of steps taken to deliver products to the consumer. As a result, distribution and logistics operators will play an increasing role in the supply chain. As e-commerce reduces the boundaries between Australia and world markets there is likely to be a growing demand for strategic sites located near major transport hubs.

The Port of Melbourne has recorded eleven continuous years of growth in trade with current annual growth in the order of 6%. The future development of the port may require the relocation of port related uses currently located at South Wharf adjacent to Lorimer Street in the event that the Holden Swinging Basin is widened in order to accommodate vessels. The relocation of such activities to sites not owned by the Melbourne Port Corporation (MPC) is likely to result in existing tenants experiencing a significant increase in occupation costs. Their willingness to pay commercial rents may however be dependent upon other factors including overall levels of port activity, which are forecast to continue to grow, and the impact of this upon revenues and general profitability of their operations.

Consultation with the MPC highlighted its concern with the current pattern of development occurring within the Study Area and the impact of this upon underlying land values resulting in traditional port related activities being forced to relocate outside of the Study Area. The MPC has stated that it opposes the rezoning of industrial land to a Business 3 zoning unless it can be demonstrated that it is required to support the development of advanced manufacturing activities.

1.3 Advanced Manufacturing The future development of advanced manufacturing activities within the Study Area will be dependent upon a number of factors including the level of competition from other locations, particularly those where there is already a significant clustering of firms undertaking such activities. The evolution of these clusters reflects the key attributes of the locations including:

Accessibility to major road infrastructure; Proximity to key research institutions and Universities; Location of major industrial organisations (including head offices); and Accessibility to a skilled workforce, particularly engineers and scientists.

An analysis of businesses within the advanced manufacturing sector has been undertaken based upon industry directories (aviation, aerospace, defence and instrumentation industries) published by the Victorian Department of Innovation, Industry and Regional Development. Activities undertaken by businesses within the aviation, aerospace and defence sectors ranged from manufacturing which is undertaken by only 40% of businesses through to research and development, design and general service provision each of which is undertaken by between 19% and 27% of firms. Similarly, within the instrumentation sector only 40% of businesses directly undertake the manufacturing of products whilst 30% of businesses undertake design activities. The supply and / or servicing of instruments are also significant activities being undertaken by 15- 20% of businesses. This analysis indicated that the activities associated with advance manufacturing are not restricted to the physical production of products with activities associated with the development of intellectual property or the provision of related services accounting for a significant share of activity.

The location of businesses operating within the advanced manufacturing sector is largely determined by the nature of activities undertaken. Firms undertaking physical manufacturing activities are broadly distributed across the metropolitan area albeit still within identifiable clusters primarily within the middle and outer eastern suburbs. Firms not undertaking physical

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manufacturing activities are distributed quite differently with a strong clustering of firms within inner Melbourne including the Melbourne CBD, Richmond and Port Melbourne, particularly within the aviation, aerospace and defence sector. Based upon these location patterns, the Study Area has the potential to attract activities related to advanced manufacturing although these activities may be expected to not be related to the physical production of products but rather the development of intellectual property. This view is consistent with that of the Department of Innovation, Industry and Regional Development with respect to the future development of industry within the area.

1.4 Industry Restructuring, Business Reorganisation and the Property Market The progressive restructuring of Australian industry has resulted in its operational and property requirements being significantly different from those that provided the basis for the initial development of the Study Area. The manufacturing sector is increasingly characterised by co- operation and collaboration between large and small businesses as well as between universities and research institutions. This contrasts with the structure that characterised traditional manufacturing when technological innovations primarily occurred within larger firms, and the role of smaller firms was peripheral to the core manufacturing process.

The restructuring of the manufacturing sector through the outsourcing of non-core components, together with in adoption of more space efficient technologies, has resulted in the demise of large factories in favour of smaller production units. The traditional association of manufacturing with factories, particularly large ones, has weakened significantly as the economic size of production plants is reduced.

Demand for larger industrial sites for the physical manufacturing of products has declined significantly over recent decades as industry restructuring and business reorganisation has encouraged greater flexibility with respect to the physical location of activities. The competitive mechanism of the property market has also encouraged businesses and activities to relocate based upon the location requirements of each.

The pattern and nature of development that has occurred within the Study Area over recent years reflects these trends with more intensive land uses favouring the area in order to access major customers / clients within either the immediate area, the Melbourne CBD, or the wider metropolitan area via key transport links.

1.5 Property Market Conditions Property market conditions within the Study Area have changed significantly over the past decade in response to the trends discussed above. New high quality office / warehouse accommodation has attracted a wide range of occupants which in some cases enabled the consolidation of business operations in one location.

Vacant development sites within the Study Area are currently valued at $250-$500 p.s.m. depending upon location, size and zoning provisions. This is considerably higher than values within other premium industrial locations such as the Monash industrial Precinct where values are in the order of $220-$250 p.s.m.

The premium for sites with a Business 3 zoning is considered to be in the order of 20% over that of equivalent development sites zoned Industrial 1. This premium reflects the increased flexibility provided by a Business 3 zoning resulting in the opportunity for more intensive forms of development to be undertaken. It is however noted that a Industrial 1 zoning is largely ineffective in containing office development with recent forms of development comprising individual office / warehouse which individually have less than the maximum of 500 sq.m. allowed under the Industrial 1 zoning provisions, but in aggregate considerably exceed this level.

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1.6 Strategic Planning Policy Context

The Fishermans Bend area is the subject of a number of strategic planning and policies including relevant sections of the Melbourne Planning Scheme, Amendment C60, City Plan 2010, the Port Melbourne Structure Plan and Melbourne 2030. These policies generally:

encourage the establishment of an attractive well serviced high technology business and industrial park with attractive streetscapes and access to recreation along river front; encourage the establishment of advanced manufacturing and research development facilities particularly in high-technology areas such as automotive, aerospace, multimedia, biotechnology and information technology industries; encourage a mix of large corporate industry, research and technology based and start up businesses; encourage the protection of existing industry, in particular manufacturing industries of State significance; encourage improvements to road, public transport, pedestrian and cycle access and circulation within and around the area; encourage protection of the Port from inappropriate development which may hinder its operation and promote appropriate uses which depend upon or gain advantage from proximity to the Port;

1.7 Key Issues There are a number of key issues that need to be considered in evaluating alternative planning options for the Study Area. Key issues include the following:

Appropriateness of Industrial 1 and Business 3 zoning provisions; Protection of the Port of Melbourne Impact of future development upon existing industrial land uses; Timing considerations; Appropriateness of the Study Area for office uses; and Pressure for the subdivision of industrial land.

1.8 Planning Options A number of planning options have been identified to address the issues identified above. These are discussed briefly below.

Option A: Retain Remaining Land in the Industrial 1 Zone – Council could adopt a position that further rezonings will not be considered. The preservation of the Industrial 1 Zone would provide protection of existing industry and would assist in limiting the amount of new office floorspace to 500 square metres per site (or to the level that is still considered to be ancillary to an industrial use). This approach may, however, inhibit the upgrade of the area and the introduction of new uses. The Industrial 1 Zone would limit the potential for major industry headquarters to establish in the portion of Fishermans Bend area if the headquarters is not ancillary to another permitted use.

Option B: Allow Rezoning of Remaining Land to Business 3 With No Office Limit- Council would have very little control over the intensity of an office use given that office is an ‘as- of-right’ use. The opportunity for advanced manufacturing uses to establish in the Study Area could be compromised if Business 3 Zone is adopted with no limit on the office floor area. Intensive office developments would be able to establish and potentially displace existing and future industry, creating instead a second grade office precinct. This option is therefore not considered appropriate.

Option C: Business 3 Zone with a 500 Square Metre Limit in the Schedule – This option would involve the consideration of rezoning requests on a site by site basis to a Business 3 Zone with a 500 square metre limit on the ‘as-of-right’ office use. Council could

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exercise discretion over the intensity of office development that can establish in the area which would allow a more controlled transition of the area from a traditional manufacturing precinct to an advanced manufacturing area with an increased office component. The transition could be managed in accordance with progressive improvements in pedestrian links, bicycle paths, public transport and potential new road networks. The discretion exercised over office developments can be informed by planning policy, including the Local Planning Policy Framework.

Option D: Local Policy for Fisherman’s Bend Industrial Area – Council could consider the introduction of a local policy for the Fishermans Bend area. The policy should address:

the competitive strength of the area and the desire to build on the existing industry clusters, particularly in relation to the aerospace and car manufacturing sectors; the land use and activities that are encouraged in the precinct; the land uses and activities that are discouraged in the precinct; the upgrade of the area in terms of urban design and built form; and the type of subdivision that will be supported; the need for on-going improvement of public transport and pedestrian areas

Option E: Investigation of New Definition or New Zone – The former Melbourne Planning Scheme incorporated the South Port High Technology Zone. Council could consider lobbying for the re-introduction of a similar ‘advanced manufacturing’ zone that encourages uses that are deemed to fall within the realm of advanced manufacturing. Alternatively, a new definition could be introduced into the VPPs to allow for the distinction of advanced manufacturing uses from more traditional manufacturing.

1.9 Recommendations A number of recommendations are put forward to address the planning issues identified above. These are as follows.

1. Council prepare a local policy for the Fishermans Bend area that addresses: Vision Objectives Preferred activities and uses Preferred subdivision patterns and sizes Preferred urban design outcomes

2. Council refuse to support any rezoning to Business 3 Zone which places no limit on the ‘as- of-right’ office.

3. Council retain the Industrial 1 Zone for existing industries.

4. Council only consider rezonings to the Business 3 Zone if: a limit is placed on the ‘as-of-right’ office floorspace use; and a development plan is prepared for the site and incorporated into a Development Plan Overlay or an Incorporated Plan Overlay showing uses consistent with the vision for the area.

5. Council require permit applicant’s for office development to submit detailed traffic and parking impact statements.

6. Council require the provision of concept plans with subdivision applications which show a variety of lots sizes with a minimum area of 2000 sq.m. and an average of 5000 sq.m.

7. Department of Sustainability and Environment should seek legal advice about what constitutes an ancillary use. In particular, to what extent can the headquarters of a major manufacturing industry operating in the area be defined as ‘ancillary’?

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8. Council to consider the introduction of a Development Contribution overlay to assist with the funding of new roads, pedestrian links, bicycle paths and public works improvements

9. Council to consider the introduction of a Design and Development Overlay to influence the height, setback, subdivision and appearance of the Fishermans Bend area.

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2. INTRODUCTION In March 2003, Charter Keck Cramer in association with Hansen Partnership was commissioned by the City of Melbourne, the Melbourne Port Corporation and the Department of Sustainability and Environment to investigate the nature of land use activity occurring within the Port Melbourne / Fishermans Bend precinct. Furthermore, an objective of the Study was to assess the implications of current development trends for advanced manufacturing and port-related activities within the precinct, and the role of planning policies in managing future development. This report presents the findings of the Study with Sections 1-8 undertaken by Charter Keck Cramer, while Sections 9-12 were undertaken by Hansen Partnership.

Concerns have been expressed by the Melbourne Port Corporation (MPC) and Department of Sustainability and Environment (DSE) the that recent forms of development activity may not be consistent with the vision held by the DSE and the City of Melbourne for the Fishermans Bend precinct as a centre for either advanced manufacturing2 or port related activities. The progressive rezoning of sites from Industrial 1 to Business 3, consistent with the requirements of advanced manufacturing activities, has enabled forms of activity to occur that either are, or appear to be, unrelated to advanced manufacturing.

2.1 Study Aims The principle aims of the Study were to:

Determine what is the likely blend of future land use and activity in the Fishermans Bend precinct given a range of factors including location, cost of land, proximity to the port and transport infrastructure etc.; Review the zoning pattern in the area to determine whether the configuration of zoning needs to be reassessed to support the objectives of the area; and Provide a clear indication of the future form of development in the area to assist government authorities in providing a more certain environment within which business and investment decisions may be made.

2.2 Study Objectives The objectives of the Study, as stated within the Consultant’s Brief, were to:

Identify the types of land uses that are currently occurring within the Study Area; Identify the kind of land uses and development activity that is likely to occur in Port Melbourne in the future; Determine if the existing mix of zonings are appropriate given current and likely future forms of development and role of Port Melbourne / Fishermans Bend; Assess the impact of more commercial zones such as Business 3 upon property values; Assess the opportunity for port related uses to be located within the Study Area; Identify other areas with similar characteristics and approaches adopted by other municipalities; and Provide recommendations on the approach that should be taken with respect to zoning and other regulatory mechanisms, policy and /or strategy.

2 Advanced Manufacturing is defined as the rapid introduction of new processes, materials and technologies to manufacturing applications. This sector gains competitive advantages through continuous innovation that integrates design, engineering, production and delivery processes more effectively (refer Section 2.5 for further discussion of advanced manufacturing activity).

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2.3 Study Area The Study Area as defined in the Consultant’s Brief is bounded by the West Gate Freeway to the south, the Yarra River to the north and west, and the Charles Grimes Bridge to the east (refer Figure 1). The area forms part of the wider Port Melbourne industrial area that extends south to Williamstown Road, the remainder of which is contained within the City of Port Phillip’s municipal boundary.

The precinct has evolved into a high profile industrial / corporate location with a number of key organisations including Boeing; RMIT (Aerospace Engineering); Herald and Weekly Times; Defence Science and Technology Organisation (Aeronautical and Maritime Research Laboratory); Holden; and Kraft Foods.

Recent developments within the Study Area reflect a number of factors including:

Construction of the Western Ring Road and City Link which has enhanced accessibility to the area; Development of the adjacent Dockland precinct which will introduce a range of residential commercial and retail activities, Progressive gentrification of traditional inner city industrial suburbs such as Richmond, North Melbourne and South Melbourne which has reduced the supply of inner city industrial land; and Restructuring of Australian manufacturing industries and the impact upon the location of manufacturing production, the outsourcing of non-core activities by manufacturers and their associated property requirements.

2.4 Methodology The methodology adopted for undertaking this Study comprised a number of inter-related stages, each of which addressed issues impacting upon the future direction and role of the Study Area, and in particular as a centre for advanced manufacturing.

Patterns of business activity within the Study Area over recent years reflects underlying trends in the location requirements of industry sectors as well as the attributes of the area. A database of businesses located within the Study Area over the period 1999-2003 was constructed and analysed to determine the nature of activity currently within the area as well as patterns of relocation into and out of the area. Such analysis provides a basis for identifying underlying trends in business activity and land use (Section 1).

Advanced manufacturing represents a significant component of the City of Melbourne and Department of Sustainability and Environment’s vision for the Study Area. The experience of the area in attracting such forms of activity has been analysed in Section 5 through the compilation of a database of businesses operating within advanced manufacturing from industry directories. Patterns of advanced manufacturing related activity have been analysed across metropolitan Melbourne as a basis for identifying existing clusters of activity and factors influencing location preferences and the competitiveness of the Study Area in attracting advanced manufacturing activity in the future.

The form of development currently occurring within the Study Area primarily reflects the structure of Australia’s manufacturing and related industry sectors, their location and property requirements, and the impact of these upon the market for industrial property within the Study Area. Section 6 is devoted to analysing the structure and organisation of Australia’s manufacturing sector, particularly with respect to advanced manufacturing and the impact of this upon the location and nature of activity within this sector.

The automotive and aerospace industries are strategically significant to the future development of the Study Area due to the presence of key organisations including Holden, Boeing, Defence Scientific and Technology Organisation (DSTO) and the Royal Melbourne Institute of Technology (RMIT). Section 4 of the study provides a brief analysis of the automotive, aerospace and the transport and storage sectors, the outlook for each and the likely impact of this upon future

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patterns of development within the Study Area. The Port of Melbourne also represents a major strategic asset that facilitates trade on international markets. Accordingly, the issues associated with the future operation of the port are identified including the scope for port related activities to be located within the Study Area.

Property markets provide insight into the changing role of areas and emerging trends in activities being undertaken. Section 7 of the report provides a detailed analysis of Melbourne’s industrial property market including market conditions within the Study Area and a profile of recent forms of development

Section 7 provides an assessment of the current situation within the Study Area based upon the findings of earlier stages. A strategic assessment of future development opportunities is provided based upon the outlook for future growth of key industry sectors within the Study Area, recent patterns of business location in the area and current trends within Melbourne’s industrial property market.

2.5 Definition of Advanced Manufacturing The Study Area has been identified by the Victorian Government and the City of Melbourne as a location for advanced manufacturing. For the purpose of this Study advanced manufacturing has been defined as the rapid introduction of new processes, materials and technologies to manufacturing applications. This sector gains competitive advantages through continuous innovation that integrates design, engineering, production and delivery processes are integrated more effectively, resulting in increased productivity through higher speeds and better information about and control of manufacturing processes; more flexible manufacturing lines; faster development of innovations; shorter time-to-market and lower costs.

Advanced Manufacturing magazine identifies Advanced Manufacturing Technologies (AMT) as including “computer-controlled machine tools, robots, sensors and vision systems, programmable logic controllers (PLCs), intelligent automated material handling systems such as storage and retrieval systems or sophisticated conveying systems, lasers in a variety of applications, computer-aided design and manufacturing (CAD/CAM), computer-integrated manufacturing (CIM), rapid prototyping systems and flexible manufacturing systems. AMT’s also include computer or information technology applications such as manufacturing resource planning and enterprise resource planning systems, supervisory control and data acquisition (systems and software, human-machine interfaces and even such technologies as local-area and wide-area computer networks (LANs and WANs) in industrial settings”3.

3 Advanced Manufacturing Magazine may be found at http://www.advancedmanufacturing.com

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3. STUDY AREA: ANALYSIS OF BUSINESS ACTIVITY AND LOCATION PATTERNS

A key objective of this Study was to identify the types of land uses that are currently occurring within the Study Area, and that are likely to occur in the future. Changes in land use within the Study Area over time will reflect a number of factors including:

Changing structure of industry sectors; Impacts of technology upon productivity and skill base requirements of the manufacturing sector; Outsourcing of non-core activities by larger corporations; Reduced supply of industrial land in inner Melbourne in response to gentrification; Impacts of improved transport infrastructure upon accessibility, location requirements of manufacturers; and The availability of car parking facilities.

This section of the Study provides an analysis of the nature of current business activity within the Study Area, and how this is likely to change in the future based upon recent trends in business establishment and relocation.

3.1 Methodology and Sample A database of existing businesses within the Study Area and the nature of activities undertaken was established as a basis for analysing business activity and land use. Data was collected from electronic telephone directories, industry directories and the City of Melbourne’s Census of Land Use and Employment. A listing of businesses contained within the database, current and previous location is provided in Appendix 1. Company website addresses have been included in the database as a source of further information on the nature of activities undertaken. Businesses that have relocated from the Study Area since 1999 are listed in Appendix 1B.

In order to identify emerging forms of activity which are generating an impetus for land use change within the Study Area, a distinction has been made between firms which have established within the area since 1999 and remaining firms. In order to assist in understanding the factors influencing a firm’s decision to locate with the Study Area, the origin of new businesses has been identified based upon the 1999 White Pages telephone directory.

Businesses which have relocated from the Study Area since 1999 have also been identified and analysed in terms of the nature of activities undertaken, and locations to which they have relocated to. Businesses which are no longer located in the Study Area but for which a new location could not been identified have been excluded from the analysis on the basis that they have ceased operating for a number of possibly unrelated reasons. These may include insolvency, corporate restructuring or through being taken over by another organisation. It is however noted that some firms may have changed trading name and hence be recorded as new businesses.

Activities undertaken by businesses within the Study Area have been classified according to the nature of activities undertaken having regard to the objectives of this Study. As a result, the classification system differs from that of standard industry classifications such as Australian and New Zealand Standard Industrial Classification (ANZSIC). For example, businesses associated with advanced manufacturing have been identified separately from traditional forms of manufacturing activity.

3.2 Business Activities Of the 220 businesses currently operating within the Study Area, it was possible to identify the nature of activities undertaken for 207 (refer Table 1). There is currently a concentration of business activity within the wholesaling, basic manufacturing / engineering and business services sector which together account for 45% of total businesses. Advanced manufacturing / scientific related activity accounts for 10% of all businesses within the Study Area. Shipping related activities are undertaken by 7% of firms.

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Table 1: Study Area - Number of Business by Type of Activity Business Activity No. of Businesses Percent of Total Businesses Wholesaling 42 20.3% Basic Manufacturing / Engineering 28 13.5% Business Services 24 11.6% Advanced Manufacturing / Scientific 20 9.7% Shipping 14 6.8% Media 14 6.8% Property Services 13 6.3% Clothing 11 5.3% Transport & Storage 11 5.3% Retailing 9 4.3% Communications 7 3.4% Recreation 7 3.4% Education 3 1.4% Engineering services 1 0.5% Retail 1 0.5% Food Manufacturing 1 0.5% Restaurants 1 0.5% Total 207 100.0%

3.3 Business Establishment and Nature of Activities A total of 220 unique businesses were identified as operating within the Study Area. Just under half (46%) of these were located at the same address in 1999 and operating under the same trading name. A further 24% of firms were identified as operating elsewhere under the same trading name, with the remaining 30% of firms not listed in the 1999 telephone directory under their current trading name and have been assumed to be new start-up companies. A total of 31 firms were identified as relocating from the Study Area over the period since 1999. The changing role of the Study Area is reflected in the nature of activities undertaken by businesses either establishing in or relocating to the area compared to those which have relocated out over the period since 1999 (refer Table 2). As previously mentioned, businesses which have ceased operating are excluded from this analysis as this may have occurred for reasons unrelated to location preferences. Similarly, businesses for which the type of activity undertaken could not be determined were excluded.

The origin / destination of businesses establishing / or leaving the Study Area provide a basis for objectively analysing factors influencing location preferences within particular industries. A total of 104 businesses either established in, or relocated to, the Study Area over the period since 1999. This compares with 29 businesses that relocated out of the area, giving a net change of 75 additional businesses (less businesses that have ceased operations). Of this net change, those engaged in the provision of business services accounted for 23%, followed by wholesaling (15%), media related activities (12%). Shipping related activities accounted for 8% of the net change in businesses, and advanced manufacturing 3%.

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Table 2: Study Area - Business Establishments and Relocations by Type of Activity 1999- 2003 Business Activity Relocations Relocations Net Change Percent of In / New Out Total Businesses Change Wholesaling 17 6 11 14.7% Business Services 19 2 17 22.7% Property Services 7 1 6 8.0% Transport & Storage 9 6 3 4.0% Basic Manufacturing / Engineering 8 5 3 4.0% Clothing 8 1 7 9.3% Shipping 8 2 6 8.0% Media 9 0 9 12.0% Communications 6 4 2 2.7% Advanced Manufacturing / Scientific 6 2 4 5.3% Retail 1 0 1 1.3% Food Manufacturing 1 0 1 1.3% Engineering services 1 0 1 1.3% Education 2 0 2 2.7% Total 104 29 75 100.0%

3.3.1 Origin of Businesses Establishing In Study Area Businesses relocating into the Study Area predominately came from the suburb of Port Melbourne (including the Study Area) which accounted for 34% of all relocations followed by South Melbourne / Southbank (20%). Other inner city suburbs such as the Melbourne, North Melbourne, Carlton, Collingwood, Abbotsford, West Melbourne and Footscray accounted for a further 30% of businesses relocating into the Study Area. The remaining 16% of new businesses were drawn from a range of middle and outer suburban locations including Campbellfield, Thomastown, Oakleigh, Airport West and Preston.

Wholesaling activities, which accounted for a significant proportion of new activity within the Study Area, may be partly traced to businesses relocating from South Melbourne / Southbank and residential areas within Port Melbourne. This factor also largely explains the growth in media activity within the Study Area. The growth in business services activity is predominately a result of new start-up businesses rather than relocations.

3.3.2 Destination of Businesses Relocating From Study Area The destination of businesses moving out of the Study Area since 1999 varies noticeably from the locations from which businesses have originated. Whereas over 80% of businesses relocating into the Study Area originated from eastern and northern suburbs, only 35% of businesses relocated to these areas. The majority of businesses (45%) chose to relocate to Melbourne’s inner western and middle western suburbs.

The transport and storage and basic manufacturing / engineering sectors, which together accounted nearly 40% of businesses relocating from the Study Area, have shown a strong preference for Melbourne’s western suburbs with locations such as Laverton, Footscray, Yarraville popular. Wholesaling activity, accounting for 20% of relocating businesses, has relocated to a range of locations across Melbourne’s middle and outer suburbs. Two shipping related businesses (Celsiunator Industries and Clemenger International) have relocated to Spotswood, Port Melbourne (Williamstown Road).

3.4 Outlook for Business Activity (Study Area) The results of this analysis indicate that there has been a strong trend towards business services establishing within the Study Area. Given the expected overall growth in this sector of the economy, it is anticipated that this form of activity will become more prevalent within the Study Area in the future. Currently business services activity accounts for 12% of businesses located in

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the area, compared to 23% of the net change in the total number of businesses over the period 1999-2003. The clothing sector is similarly increasing its representation accounting for just over 9% of the number of additional businesses compared to 5% of existing businesses.

This contrasts with traditional forms of activity such as basic manufacturing / engineering which currently accounts for just over 13% of businesses, but only 4% of the increase in the number of business over the period analysed. Advanced manufacturing / scientific does not appear to be increasing its share of activity within the Study Area with the share of new firms (5%) less than its representation amongst existing businesses (10%).

Overall the analysis indicates that the Study Area is attracting more intensive forms of activity which have not traditionally located within the area. This trend is consistent with the forms of property development that have been observed (refer Section 3), and are likely to strengthen as amenity levels continue to improve and the area consolidates its position at the upper end of the industrial property market.

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4. STUDY AREA: KEY INDUSTRY SECTORS A number of key manufacturing industries operate in the Study Area with major organisations increasingly supported by smaller businesses reflecting the trend towards outsourcing that has characterised industry development over the past decade. This section of the Study investigates the automotive and aerospace industries that have a long established history of operating within the Study Area. The transport and storage sector also has a long history of operating within area, however this sector has experienced considerable structural change over the past decade through progressive restructuring and the adoption of new technologies. Finally, the Port of Melbourne represents a key strategic asset for Victoria with issues relating to its future operation analysed accordingly. Each of these sectors has been analysed to identify future likely role in the future development of the Study Area.

4.1 Aerospace The Australian aerospace industry comprises a number of activities including:

Aircraft component manufacturing; Light aircraft manufacturing; Light aircraft repair and maintenance; Systems design and engineering; Aviation training, and Air traffic management products.

The industry was established in Australia by the Federal Government in the late 1930s in response emerging threats to domestic security. Significant growth during WW2 with resulted in three central organisations (Commonwealth Aircraft Corporation, Government Aircraft Factories (GAF) and Hawker de Havilland) employing in excess of 40,000 people.

Today, the Australian aerospace sector is made up of a number of international companies including Boeing Australia (incorporating Hawker de Havilland), BAe Systems Australia, EADS Australia Pacific. Lockheed Martin also has a significant presence in Australia via a joint venture software and systems development company. A large number of small-medium sized businesses also provide products and services to larger organisations. The Department of Defence is the largest source of demand for aerospace products and services, accounting for more than one-third of industry turnover, whilst the commercial airline sector also being a major source of demand.

The aerospace industry is supported by a number of key research organisations including:

The Co-operative Research Centre (CRC) for Aerospace Structures The CRC was established in 1991 in Fishermans Bend with support from industry, universities and the Commonwealth Government to improve the competitiveness of the Australian aerospace industry. The centre changed its name in 1996 to the CRC for Advance of Composite Structures. Current funding for the CRC is due to expire in 2003.

CSIRO The CSIRO undertakes research on advanced polymer composites, corrosion prevention control, metal surface coatings, and has an established research relationship with DSTO and BAe Australia to develop both advanced materials and processes for the industry.

Royal Melbourne Institute of Technology: Department of Aerospace Engineering. The Department of Aerospace Engineering is located in Fishermans Bend where it undertakes a range of research including:

- Aerospace systems design and optimisation; - Advanced fibre composites; - Guidance; - Dynamics and control; - Aerodynamics;

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- Aerospace propulsion systems; - Aircraft structures, loads and vibration; - System engineering; - Crashworthiness; and - Unmanned Air Vehicles

Defence, Science and Technology Organisation (DSTO) DSTO undertakes aerospace research and development primary through its Aeronautical and Maritime Research Laboratory (AMEL) in Fishermans Bend. The DSTO engages with the aerospace industry through:

- Fatigue testing and management; - Aerospace coatings; - Corrosion prevention and control; - Systems integration; - Composite materials; and - Simulation

Growth in the Australian Aerospace industry has slowed with employment levels stabilising at around 12,000 people. In addition, annual exports of value added products have not shown any growth over recent years. The future growth of the industry will be dependent upon the ability to increase exports within a global market distorted by significant Government involvement through the provision of support for local aerospace industries via Government ownership, industry offset arrangements, direct grants and subsidies, and direct defence procurements.

4.2 Automotive The Australian passenger motor vehicle (PMV) industry is largely concentrated in Victoria and South Australia with the four car manufacturers (Ford, Holden, Mitsubishi and Toyota) supported by over 200 component, tooling, design and engineering firms.

Domestic new car sales have stabilised at around 530,000 – 550,000 units per annum following strong growth during the first half of the 1990s. Sales of locally produced PMV’s into the domestic market have fallen from 273,000 units in 1998 to 209,000 units by 2001 with markets share falling sharply from over 50% to only 40% over the past 5 years. In 2001, Holden held 21% of the market followed by Toyota (18%), Ford (14%) and Mitsubishi (9%).

The export market for locally produced cars has grown strongly over the past five years from 24,000 units in 1996 to over 117,000 units by 2001, largely due to the export success of the Toyota Camry, Holden Commodore and to a lesser degree the Mitsubishi Magna. The strong growth in export sales has largely outweighed the decline in producers market share in the local market enabling production levels to increase to around 350,000 units per annum compared to less than 330,000 units around five years ago.

4.2.1 Components Manufacturing The components manufacturing sector has experienced similar performance to the PMV sector with the value of domestic sales stagnating at just over $5 billion per annum, whilst export sales have more than doubled since the mid 1990s to $1.2 billion by 2001.4 This sector comprises around 300 firms nationally of which approximately half are located in Victoria. The largest 35 manufacturers account for approximately 75% of total output.

The growth in export sales by this sector has been partly achieved through developing niche export markets with international vehicle assemblers and through independent distribution networks. This has been supported by a global trend towards reducing the overall number of vehicle platforms whilst using accessory packages to customise vehicles in order to maintain some degree of product differentiation.

4 Department of Industry, Tourism and Resources (2002) Key Automotive Statistics 2001

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The Australian components industry has strong associations with overseas automotive components manufacturers in Europe, Japan and the US. A high proportion of local manufacturers are either partly or wholly overseas owned, or produce under licence to overseas component manufacturers.

Major export business undertaken by Australian companies include:

Engines by Holden’s Engine and Component Company Braking systems by PBR International to General Motors USA Alloy wheels to Japan and the Unites States; Mirrors by Schefenacker to Ford Mexico and Mazda; Anti-theft systems by Robert Bosch worldwide; and Propeller shafts by Unidrive to the USA .

Professional service firms providing design, engineering and product testing services to both car assemblers and component manufacturers also support the PMV industry. Similarly, the tooling industry supplies directly to assemblers, component manufacturers as well as after-market parts and accessory manufacturers.

4.2.2 Outsourcing within the Automotive Industry There has been a trend towards the outsourcing of systems engineering and manufacturing functions with the car manufacturers becoming primarily brand managers, as a means of improving competitiveness on the export market.5 The automotive industry has also evolved into an intensive user of new technology and intellectual property at each stage of the automotive value chain, with the need for specialist technical services to be sourced externally from service providers.

The Victorian Office of Manufacturing suggests that the trend towards increased systems and manufacturing outsourcing within the automotive sector has resulted in “a push by systems integrators to be located adjacent to assembly plants, and to strengthen their product and manufacturing capabilities, usually by joint venture with a major international systems integrator”.6 Increased demand for information flows both electronically and through face-to-face contact has also resulted from the outsourcing of component design and integration responsibility to systems integrators generates.

4.3 Transport and Storage The Bureau of Transport and Regional Economics (BTRE)7 has defined logistic services as covering a range of activities including:

Production processes (production flow management, inventory management, packaging, order processing, demand forecasting); Materials and other inputs (procurement, materials management); Transport and storage; Product support (parts and services); and Reverse flows and disposal (product/equipment returns, recycling, waste).

The provision of logistic services is supported by infrastructure and resources including:

Human resources (managerial and operational); Financial resources; Packaging materials; Warehousing (land, buildings, plant and equipment); Transport (e. g. pallets, containers, vehicles, terminals); and Communications facilities, equipment and software.

5 Victorian Office of Manufacturing, Strategic Audit of Victorian Industry - Automotive 6 Victorian Office of Manufacturing, Strategic Audit of Victorian Industry – Automotive p16 7 Bureau of Transport and Regional Economics (2001) Logistics in Australia: A Preliminary Analysis, Working Paper no. 49

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There has been an increasing trend towards the outsourcing of logistical requirements by both small and larger organisations resulting in the growth of external providers which may be categorised as being:

Contractors/specialists (e.g. airlines, road transport owner-drivers); Brokers/agents (e.g. customs brokers, freight forwarders); Multi-service logistics operators; or Integrated logistics providers.

The overseas experience suggests that there may be some scope for continued growth in the outsourcing of logistic requirements. Australia has a relatively low incidence of outsourcing logistic services compared to Europe where the proportion of distribution services undertaken by external providers ranges between 12 per cent and 38 per cent at an individual country level.8 Increasing demand for logistic services may also be traced to the increasing proportion of total manufactured products that are sold into export markets. In 2000-01, 20% of manufactures produced in Australia were exported. It is particularly notable that the proportion of production exported does not vary significantly based upon the size of firms, firms employing less than 50 employees exporting on average 15% of their production.9.

The restructuring of Australian industry and the resulting increase in exposure to competition on international markets (or from imports) has placed pressure on the logistics sector to increase efficiency levels and generate competitive advantages over competitors. The competitiveness of the logistics component is dependent not only upon cost efficiencies but also delivery times, the condition of products upon delivery and the impact upon sales revenues.

The performance of a logistics system is dependent upon the effective management of an overall chain that comprises individual activities such as inventory management, storage, information systems, local delivery and transportation. Effective chain management is dependent upon the co-ordination of activities that may be achieved through either:

Undertaking logistics requirements in-house; Multi-service logistics providers co-ordinating multiple activities; or Partnerships / alliances between firms.

The BTRE has identified a number of partnerships and alliances between firms including:

Users of logistics services (e.g. a computer manufacturer and its component suppliers); Users of logistics services and providers of these services (e.g. a major manufacturer and an integrated logistics provider); Providers of logistics services undertaking similar activities (e.g. a local freight forwarder and an overseas freight forwarder); Providers of logistics services undertaking different activities (e.g. a packaging firm and a storage/distribution firm); and Providers of logistics services and major consultants or information technology specialists.

8 Bureau of Transport and Regional Economics (2001) 9 Australian Bureau of Statistics, Manufacturing Industry 2000-01 (cat. no. 8221.0)

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4.4 Port of Melbourne The Port of Melbourne is the largest container port in Australia accounting for just under 40% of Australia’s containerised trade and as such represents a major strategic asset for both the Australian and Victorian economies.

4.4.1 Port Activity Trade through the Port of Melbourne has recorded eleven continuous years of growth, and is currently growing at a rate of around 6% per annum. Containerised trade accounted for 67% of total port trade during 2001/02 with 1.42 million TEU10 handled (up 7.5% from 2000/01). Overseas containers accounted for 80% of containerised trade with the remainder accounted for by coastal movements. International containerised trade is forecast to more than double to over 2.8 million TEU by 2020. The Melbourne Port Corporation anticipates that over the next 20 years an additional 5 berths and 42 hectares of terminal space will be required in the Port.11

Adjacent to Lorimer Street, South Wharf accounts for 13 hectares of port land providing facilities for break-bulk general cargo trades such as timber, motor vehicles and paper products (Berths 28 and 29). Berths 26 and 33 are reserved for bulk cement materials, and the remaining berths are currently used for port ancillary services and port-related activities. Sheds at Berths 27 and 31 accommodate cargo warehousing and freight forwarding

Over recent years there has been investment by South Wharf tenants in construction of facilities including the construction of a 45,000 tonne storage silo and four loading silos on South Wharf valued at $10 million and the upgrading of a warehouse by TEAC valued at $5 million.

4.4.2 Urban Encroachment Urban encroachment is a major factor impacting upon the operations of ports across the world. The Port of Melbourne is particularly susceptible to encroachment by potentially incompatible uses given its inner city location and the attractiveness of this for higher intensity uses servicing the needs of businesses within the Melbourne CBD and the wider metropolitan area. The introduction of containerisation in the late 1960’s resulted in a requirement for longer heavy-duty berths, increased land adjacent to ports to support port operations, and rail and heavy-duty vehicle access into the ports.12 Together, urban encroachment and growing demand for land to support containerised trade increasing the potential for conflict between incompatible land uses.

Land buffers around ports have been generally used to protect sensitive land uses such residential development from the negative impacts of port operations such as noise dust and odours. The reservation of such buffers however is required well in advance of port expansion, and dependent upon accurate forecasting of future port land requirements for port related uses.

4.4.3 Future Accommodation of Port Related Uses There are a number of port related uses that are currently located on South Wharf, the majority of which undertake operations requiring direct access to the wharf. Similarly, the future development of Webb Dock will generate demand for port related uses such as the immediate storage of containers.

The potential for existing uses to be relocated to sites within the Study Area (in the event that the Holden Swinging Basin is widened, or for new uses associated with the expansion of Webb Dock to be established), will be dependent upon the ability or willingness of these users to pay market rentals. Currently, warehouse facilities on South Wharf are leased by the MPC for $40-$65 per square metre, compared to an equivalent rate in the order of $100 per square metre for non-MPC land located south of Lorimer Street. This suggests that existing tenants are likely to experience a significant increase in occupation costs in the event that they are forced to relocate. Their willingness to pay commercial rents may however be dependent upon other factors including

10 Twenty foot equivalent units 11 Melbourne Port Corporation, Securing a Sustainable Future: Draft Port of Melbourne Land Use Plan 12 Dr. Chris Whitaker, Ensuring the Long-term Sustainability of Our Ports, Paper presented to Pan Pacific 2002

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overall levels of port activity, which are forecast to continue to grow, and the impact of this upon revenues and general profitability of their operations.

4.5 Consultation: Melbourne Port Corporation Mr. John Riley (Manager Port Planning) was interviewed by the Consultants to obtain information on the Melbourne Port Corporation’s operating requirements and the role of the Study Area in achieving these.

Key concerns held by the MPC with respect to the future development of the Study Area relate to emerging activities that may not be consistent with the vision of the area as a location for advanced manufacturing. The implications of this conflict is that non-manufacturing related uses may be creating excessive upwards pressure upon land values resulting in traditional port related activities be forced to locate outside of the Study Area as well as the development of advanced manufacturing being compromised. The MPC has stated that it opposes the rezoning of industrial land to a Business 3 zoning unless it can be demonstrated that it is required to support the development of advanced manufacturing activities.

Port related uses are viewed by the MPC as ranging from activities currently located on South Wharf and which generally require direct access to the port, through to container storage facilities, transport and manufacturing activities directly exporting through the port. The preferred location for such activities is adjacent to the port in order to support the efficiency of port operations as well as that of operator providing port related services.

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5. ADVANCED MANUFACTURING: NATURE AND GEOGRAPHIC DISTRIBUTION OF ACTIVITY The future development of advanced manufacturing activities within the Study Area will be dependent upon a number of factors including the level of competition from other locations, particularly those where there is already a significant clustering of firms undertaking such activities. The evolution of these clusters reflects the key attributes of the locations including:

A database of businesses within the advanced manufacturing sector was constructed based upon information contained within a number of industry directories produced by the Department of Innovation, Industry and Regional Development (DIIRD) for the aviation, aerospace, defence and the instrumentation industries.13 Whist it is recognised that the advanced manufacturing sector extends beyond these industries, the DIIRD directories provided detailed information on the activities of approximately 250 individual businesses, with 143 firms from the aviation, aerospace and defence industries and 108 from the instrumentation industry. The database is seen to provide a reliable sample of the businesses operating with the advanced manufacturing sector, including activities undertaken and geographic distribution across metropolitan Melbourne.

5.1 Nature of Activities Within the aviation, aerospace and defence industries just over 40% of firms undertake some form of manufacturing, with maintenance services are undertaken by 25% of firms. More serviced based activities such as research and development, design services and general service provision are undertaken by between 19% and 27% of firms. Within the instrumentation industry, again around 40% of firms undertake some form of manufacturing, with 30% of firms undertaking design activities (refer Figure 3). The supply and servicing of instruments is a significant component of the activities undertaken by firms with 15-20% of firms undertaking each of these activities. Research and development is less prevalent within this sector with only 6% of firms engaged in this activity.

5.2 Location of Activities The location of businesses contained in the database has been mapped (refer Figure 4) and shows a number of clusters of firms in locations including inner Melbourne, the Waverley industrial precincts, Moorabbin, Bayswater, Scoresby and Dandenong.

Firms undertaking physical manufacturing activities were broadly distributed across the metropolitan area albeit still within identifiable clusters primarily within the middle and outer eastern suburbs (refer Figure 5). Firms not undertaking physical manufacturing activities are distributed quite differently with a strong clustering of firms within inner Melbourne including the Melbourne CBD, Richmond and Port Melbourne, particularly within the aviation, aerospace and defence sector. Non-manufacturing firms are also distributed across Melbourne’s eastern suburbs, with the only significant clustering of firms in Melbourne’s western and northern suburbs being at Tullamarine / Airport West for firms servicing the aerospace industry (refer Figure 6).

5.3 Implications for Advanced Manufacturing Activity in the Study Area The current nature and location of activities undertaken within the advanced manufacturing sector indicates that there are a number of factors influencing the location decisions of businesses. The analysis undertaken in this section indicates that the physical production processes associated with advanced manufacturing are most likely to occur in suburban

13 Department of Innovation, Industry and Regional Development, Aviation, Aerospace and Defence Industry: Capability Directory. and Department of Innovation, Industry and Regional Development, Victorian Instrumentation Industry Directory 2000-01

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locations. This may be explained by the availability of more affordable land within a business park environment, accessibility to a professional workforce, proximity to Melbourne’s freeway network, and the ability to service customers in traditional industrial locations such as Dandenong, Mulgrave Bayswater and Scoresby.

Non-manufacturing functions associated with advanced manufacturing however are relatively more concentrated within Melbourne’s inner region, particularly with respect firms servicing the aviation, aerospace and defence sectors. This suggests that there are opportunities for non- manufacturing activities related to advanced manufacturing to develop within the Study Area based upon the opportunity to establish strategic links to key organisations.

5.4 Consultation: Department of Innovation, Industry and Regional Development Mr. Geoff Susans (Manager - Advanced Manufacturing) and Barry Moncur (Manager – Automotive, Plastics and Printing Industries) were interviewed to identify key issues recognised by the Government with respect to the future development of advanced manufacturing within the Study Area.

Port Melbourne is seen by the Victorian Government as being a key centre for the future development of both the aerospace and automotive industries due to the presence of a number of large key organisations (GMH, Toyota, Boeing, DSTO, RMIT). There is a tendency for support businesses to be attracted to the area in order to establish alliances with these organisations. Examples of firms recently locating into Port Melbourne to do so include GKN Aerospace Engineering and Venture Asia Pacific Pty Ltd.

The DIIRD sees the Study Area as developing into a location for the provision of primarily office based technical service to the automotive and aerospace industries where face to face contact occurs on a daily basis. As such, it will develop as a location for the generation of intellectual property for advanced manufacturing rather that physical production. This view is supported by the nature of the activities undertaken by both GKN and Venture within Port Melbourne. The GKN Website (http://www.engage.gknplc.com) indicates that its Port Melbourne office at 850 Lorimer St was established in August 2002 with more than 100 staff. It is understood that Venture also has a similar number of employees at its office in Salmon Street which provides primarily office based technical and design services, with production functions performed at the company’s Campbellfield plant.

The physical production of components for the aerospace and automotive industries is seen as occurring in locations across metropolitan Melbourne offering access to the freeway network. This reflects a number of factors including the need for automotive component manufacturers to diversify across all three car makers to support fixed capital investment in plant and machinery. Similarly, component manufacturers also produce inputs for a range of other industries outside of the automotive / aviation sectors which are located across metropolitan Melbourne.

The attraction of firms servicing the aerospace industry into the Study Area is seen by the DIIRD as being a useful marketing tool for promoting the strength of the Victorian aerospace industry, which then forms a basis for the attraction of additional firms. The DIIRD does not have any concerns relating to the increase in office related uses within the Study Area as this is partly accommodating advanced manufacturing activity albeit in the form of technical services rather than physical production. The provision of better public transport was seen as being a major requirement for the future development of activity relating to advanced manufacturing.

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Figure 2: Aviation, Aerospace and Defence Industry: Proportion of firms undertaking Selected Activities

45%

40%

35%

30%

25%

20%

15% Percent of Businesses

10%

0% Manufacturing R&D Maintenance Service Provision Design

Source: DIIRD, Charter Keck Cramer Figure 3: Instrumentation Industry: Proportion of firms undertaking Selected Activities

45%

40%

35%

30%

25%

20%

15% Percent of Businesses

10%

0% Manufacturing R&D Design Supply Servicing Distribution

Source: DIIRD, Charter Keck Cramer

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Figure 4: Indicative Distribution of Advanced Manufacturing Related Activity

Source: Department of Innovation, Industry and Regional Development, Charter Keck Cramer

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Figure 5: Indicative Distribution of Advanced Manufacturing Related Activity (manufacturing activity)

Source: Department of Innovation, Industry and Regional Development, Charter Keck Cramer

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Figure 6: Indicative Distribution of Advanced Manufacturing Related Activity (non-manufacturing activity)

Source: Department of Innovation, Industry and Regional Development, Charter Keck Cramer

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6. INDUSTRY STRUCTURE AND BUSINESS ORGANISATION The progressive restructuring of Australian industry has resulted in its operational and property requirements being significantly different from those that provided the basis for the initial development of the Study Area. The rate and characteristics of property development within the area over recent years reflects the impact of these changes with current trends indicating that the area is becoming an increasingly popular location for smaller firms than has previously been the case. Increasingly, the future development of the area will be dependent upon the operating environment for smaller firms undertaking a range of activities, their relationship with larger organisations such as Holden, Boeing and DSTO as well as a range of non-manufacturing organisations located within the Melbourne CBD.

This section of the Study investigates recent trends in industry structure and business organisation and the impact of these upon the property requirements of businesses and the implications for the future development of the area.

6.1 Industry Restructuring In line with the experience of most other western industrialised nations, Australia is in a state of transition from a primarily industrial-based economy to that of a post-industrial economy. Tariff reform since the early 1970s has resulted in a series of across the board, and industry specific, reductions in tariff protection. The average effective rate of protection provided to the Australian manufacturing sector has declined from 35% in the early 1970s to about 5% by 2000-0114

While demand for services as a final product has increased substantially, the design production and distribution of goods is still a major feature of advanced economies. Australia’s export performance in the area of elaborately transformed manufactures (ETMs) illustrates that the manufacturing sector has been transformed significantly in terms of its increased focus upon higher value added goods. Since 1991-92, the value of Australia’s exports of ETMs have grown by an average rate of 10% per annum compared to 8% per annum for simply transformed manufactures and primary products.15

The distinction between manufacturing and services is becoming blurred as services become an increasingly important factor influencing the ability of manufacturers to add value to products, increase productivity and increase sales. As a result manufactured products have integrated service components and in some cases larger manufacturers have evolved into brand managers with non-core functions, including the manufacturing of products, being outsourced.

6.1.1 Technology Diffusion and Advanced Manufacturing Opportunities The adoption of new technologies enabling more efficient production processes has not been confined to only new industries. New production, distribution and service opportunities are also emerging for older manufacturing industries (and products) through the development of new materials (fibres, metals, etc.) or the simulation of product performance. Such technologies have enhanced the competitiveness of industry generally, particularly on export markets. The small size of Australia’s domestic market, together with the realisation that the benefits from advanced manufacturing processes is dependent upon export market performance, has promoted the diffusion of new technologies across industry.

14 Productivity Commission (2000), Review of Australia's General Tariff Arrangements 15 Department of Foreign Affairs and Trade (2002), Exports of Primary and manufactured products Australia 2001-2002

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6.2 Business Organisation In a report prepared by Howard Partners for the New South Wales Small Business Development Corporation,16 today’s manufacturing sector is summarised as being:

Globalised, with a wide range of functions from R&D and marketing to production and distribution now undertaken on an integrated global basis; Knowledge based, with a greater application of science based technologies in processes and products; Networked, with the co-ordination of functions through the intensive use of electronic networks and virtual and geographic clusters of expertise; Customised, with the detailed customisation of products to meet the needs of individual markets and individual customers; and Digitised, with many processes, particularly within final production, controlled by computer systems that limit the need for human intervention.

The Report notes that whilst the manufacturing sector has achieved strong productivity gains in the physical production of goods through the application of information technologies, similar efficiencies have not been achieved for internal service and support components. The skills, capability and expertise required for such components has encouraged the outsourcing of functions to firms offering lower overheads, smaller production runs, customised manufacturing or high levels of technical competence and capability. Similarly, the process of technological innovation, which was once the domain of large manufacturers, can now be undertaken by smaller businesses due to the increased affordability of technology. The transfer of support functions to smaller businesses also reflects the need for greater flexibility to deal with the uncertainty of markets, the creation of new flexible technologies and communications systems that have wide application, and an increasingly skilled workforce to establish small enterprises. As a result, a range of tasks ranging from traditional back office functions through to R&D, marketing and distribution are now outsourced, which has stimulated growth in the services sector and provided opportunities for new small businesses.

The evolution of outsourcing has resulted in the role of larger firms now being to drive technological advancements through the commercialisation of new technologies. This is achieved through investment in physical and human capital and the provision of the corporate structure required to enhance existing technologies and develop new ones. As a result, there has been a structural shift in the organisation and distribution of manufacturing related activities between small and large firms. Such a shift has had a major impact upon the structure of the manufacturing sector with small innovative technology-based manufacturing companies servicing larger traditional manufacturers’ requirements for products and services which may not be considered to be part of their core business.

Howard Partners suggest that the interaction between services and manufacturing are complex. “Linkages between the manufacturing and non-manufacturing sectors, between high-tech and low-tech, and between what is local and what is foreign are becoming more and more intricate. Developments in information technology and the Internet and the emergence of business-to- business arrangements will also impact on the way in which services are sourced and supplied in a manufacturing environment.”

6.3 Location and Property Requirements The manufacturing sector is increasingly characterised by co-operation and collaboration between large and small businesses as well as between universities and research institutions. This contrasts with the structure that characterised traditional manufacturing when technological innovations primarily occurred within larger firms, and the role of smaller firms was peripheral to the core manufacturing process.

16 Howard Partners (2001), Securing Our Manufacturing Future, (resource document prepared for the NSW Small Business Development Corporation)

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Development of more efficient technologies; Product specialisation and smaller production runs; The outsourcing of production to a wide range of suppliers with ‘just in time’ deliveries made possible by developments in information technology, transportation and logistics; and The ability of smaller plants to offer reduced up-front capital expense and greater production flexibility.

Any move away from a vertically integrated centrally directed manufacturing operation to a structure characterised by partnerships, strategic alliances and product customisation will increase the requirement for manufacturing, service support and customers to be located as close together as possible. The adoption of just-in-time manufacturing processes has also resulted in the on-site storage of inputs or components being replaced by more frequent deliveries from off-site locations, and closer relationships with suppliers.

The outsourcing of functions to smaller manufacturers and service providers has also provided the opportunity for the strengthening of the linkage between location and activities undertaken, resulting in greater efficiencies. Whereas once all functions related to the design production, distribution and administration within the manufacturing chain were located in a single large site, outsourcing has enabled activities related to these separate functions to be undertaken in locations that best suit their requirements.

6.4 Industry & Business Clusters Whilst industry clustering is not new, the factors influencing the desire for firms within an industry to co-locate are shifting. A changing emphasis within manufacturing towards intellectual capital in the form of research and development and the need to develop inter-personal networks to enable effective co-operation and collaboration and the development of strategic alliances. At the same time, improved transport infrastructure and logistical systems have not only created the opportunity for outsourcing of physical production but also greater flexibility is where it is undertaken. As a result, firms providing technical services to manufacturers have a greater tendency to seek to locate near manufacturers than do providers of physical inputs.

6.5 Outlook The trends in industry restructuring and business organisation identified above indicate that demand for larger industrial sites for physical manufacturing will be significantly less than that which has characterised post-war industrial development in Australia. Similarly, the outsourcing of activities has provided greater flexibility with respect to the location of specific activities. Through the competitive mechanisms of the property market, businesses and activities have relocated based upon the location requirements of each.

The pattern of development that has occurred over recent years within the Study Area reflects these trends as the location requirements of more intensive land uses have favoured the area. Such uses have expressed a desire to locate in close proximity to major customers / clients within either the CBD or Fishermans Bend. The disposal of land by larger manufacturing based organisations, the development of business parks to accommodate more intensive uses, and the relocation of less intensive uses elsewhere, highlights the shift in the organisation of manufacturing activity. The operation of the industrial property market has facilitated this change through allocate land to its highest and best use.

Growth in outsourcing by larger organisations is expected to continue to occur albeit at a lower rate than that experienced over the past decade. This will support the process of change in land use within the Study Area to more intensive land uses, as will proximity to the Melbourne CBD and increased accessibility provided by major road infrastructure constructed over recent years.

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7. INDUSTRIAL PROPERTY MARKET

7.1 Metropolitan Context

7.1.1 Melbourne’s Stock of Industrial Land

The Melbourne industrial property market is the largest of all Australian cities with around 21,000 ha. of land zoned for industrial purposes within which significant tracts of land remain undeveloped, particularly in the west and north sub-markets. According to the Department of Infrastructure, metropolitan Melbourne’s stock of “Industrial” zoned land in 2000 comprised:

11,110 ha. “Industrial 1” zone; 2,475 ha. “Industrial 2” zone; 3,385 ha. “Industrial 3” zone; and 3,915 ha. “Special Use” zone.

Industrial land is concentrated in five broad regions comprising the Municipalities of:

Brimbank, Hobsons Bay and Wyndham (5,700 ha. of “Industrial” zoned land); Hume and Whittlesea (2,800 ha.); Knox and Maroondah (1,400 ha.); Casey, Frankston, Greater Dandenong, Kingston and Monash (3,700 ha.); and Mornington Peninsula (3,100 ha. – the vast bulk being zoned “Special Use”).

Together these 13 Municipalities (out of the 31 that comprise the metropolitan area) account for 80% or 16,700 ha. of Melbourne’s total stock of “Industrial” zoned land.

Of the total metropolitan stock, currently around 5,500 ha. of industrial land is unimproved and therefore available for future development, giving Melbourne the nation’s largest supply of vacant industrial land (Perth is estimated to currently have around 3,700 ha. vacant, Sydney 1,600 ha.).

Nearly 50% of Melbourne’s stock of vacant industrial land is within a 2 kilometre radius of an existing freeway interchange. In the western region, this increases to approximately 80%, whilst in the south-east it is only around 26%, though the completion of the Scoresby Transport Corridor will lift this figure to around 70%. Prior to the construction of the Western Ring Road, 65% of industrial land in the west was in proximity to a freeway interchange, as opposed to the current 80%. The significance of road infrastructure is becoming increasingly important given the trend away from on-site warehousing.

The proportion of Melbourne’s industrial land stock that has been developed increased from 68% to 74% between 1995 and 2000 primarily as a result of the completion of the Western Ring Road and the impetus which this provided for the development of industrial land within Melbourne’s northern and western regions. The highest demand for industrial land over this time was for smaller allotments of less than 2 ha.

Industrial 1 zoned land, which alone accounts for 53% of all industrial land, with “Industrial 2”, “Industrial 3” and “Special Use” accounting for 12%, 16% and 19% respectively. Industrial land specifically set aside for heavy industry, “Industrial 2” zone, is only found in 3 of the 31 metropolitan Municipalities, namely Brimbank, Greater Dandenong and Wyndham. Of total “Industrial 2” zone land, Brimbank accounts for around 39% (or 970 ha.) of Melbourne’s supply, with 644 ha. occupied and a further 328 ha. vacant.

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7.1.2 Demand Drivers The key users of industrial space are businesses from the manufacturing, wholesale trade and logistics industries. The relative importance of these industries within the economy, and hence as space users, is shifting. Though manufacturing’s share of Australia’s total economic output has fallen in relative terms, it has re-orientated its focus towards the production of higher value added, export oriented goods. Further, the wholesale trade sector has grown on the back of strong domestic consumption that has underpinned Australia’s robust economic performance over recent years. However, the logistics sector has experienced the most fundamental change through industry restructuring, outsourcing and mode integration which have driven much stronger demand for new industrial premises, particularly storage and distribution facilities.

The performance of these sectors, and therefore their demand for industrial space, is critically linked to levels of overall demand in both the domestic economy and, to an ever increasing degree, the global economy as export opportunities continue to expand.

7.1.3 Factors Impacting upon the Industrial Property Market Over the medium and long term, it is anticipated that the industrial property markets will be further influenced by major road and transport infrastructure developments designed to reinforce linkages and increase efficiencies.

Already, the industrial property markets in Melbourne’s western and north-western regions have benefited from the opening of the Western Ring Road and CityLink through the provision of significantly increased accessibility to across metropolitan Melbourne.

Further, final approvals have been given for construction of the F2/Craigieburn Bypass, with construction of the F2 expected to cut up to 30 minutes from the travel time between Craigieburn and the Northern Ring Road. This will result in improvements to transport linkages between Hume’s industrial corridor, Melbourne Airport and the Port of Melbourne.

Similarly, construction of the Mitcham-Frankston Freeway linking Ringwood, Dandenong and Frankston has been considered of great strategic importance as it would facilitate more efficient goods movements throughout the eastern suburbs and will provide another link in the Metropolitan Orbital Road. When operational, the freeway will provide better links from major industrial areas along the corridor to ports, airports, major freight routes and other industrial precincts. Together, these infrastructure improvements are expected to generate significant growth opportunities for industrial markets in the northern and eastern regions in particular.

7.1.4 Investment Performance Over recent years, the Melbourne industrial property market has been characterised by strengthening demand on the back of strong economic conditions and low interest rates. As a result, yields and rents on industrial property in Melbourne have firmed over the past decade. Current yields on prime industrial properties are in the order of 8.5% - 9.5%, whilst yields on secondary grade properties extend up to 10% - 12%. At the metropolitan level, prevailing market rents for prime industrial facilities range between $55 - $65 p.s.m., with rents in the west typically at the lower end of this range, while rents for secondary properties range in the high $30s to mid $40s p.s.m. depending upon location.

Unimproved industrial land value rates vary significantly across Melbourne ranging from a low of $40 p.s.m. in the west for land distant from major transport infrastructure and offering limited amenity and poor street frontage/access, up to $250 p.s.m. for prime land in close proximity to the major road arterial routes. In particular, the completion of the Western Ring Road has seen solid growth in land value rates in the west for sites located close to the Western Ring Road.

In terms of overall investment performance, the Property Council of Australia’s Investment Performance Index reports that Melbourne industrial property has recorded total income returns of between 9.2% p.a. and 10.4% p.a. over the last five years (to the December 2002 quarter). In contrast, annual capital returns have been significantly weaker ranging between 1.1% p.a. and

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3.3% p.a. over the same period, for an average growth rate of 2.2% p.a. Overall investment returns (income and capital) have varied between 11.5% and 13.0%, with an average total investment return of 11.8% over this period. Table 3: Melbourne Industrial Property Performance

Period Income Return (p.a.) Capital Return (p.a.) Total Return (p.a.) Year to December 2002 10.04% 3.35% 13.64% 3 years to December 2002 9.84% 2.38% 12.40% 5 years to December 2002 9.97% 2.18% 12.31% 7 years to December 2002 10.22% 1.04% 11.35% Source: Property Council of Australia Investment Performance Index Note: The PCA Investment Performance Index incorporates non-rental income (e.g. signage rights, etc) in calculating its measure of “income return”, hence it will typically return a figure above current market yields.

7.1.5 New Construction The value of building approvals for new industrial space in Victoria declined markedly in 2001 relative to 2000 as a consequence of a listless year experienced within the manufacturing sector. Since this time, the value of building approvals increased during 2002, although still remains well below the level of activity experienced during 2000. Figure 7: Value of Building Approvals (Industrial Space) – Victoria

$m $350 Outer $300 Inner $250

$200 $202 $228 $150 $163 $143 $131 $100

$50 $91 $84 $61 $48 $74 $0 1998 1999 2000 2001 2002

Source: Victorian Building Commission, Charter Keck Cramer Note: "Inner" incorporates the Municipalities of Melbourne, Hobsons Bay, Port Phillip, Maribyrnong, Moonee Valley, Banyule, Darebin, Moreland, Yarra, Monash, Whitehorse, Boroondara, Glen Eira, Stonnington and Bayside.

At a regional level, new industrial approvals in recent years have been most highly concentrated in the municipalities of Greater Dandenong, Kingston and Hume:

Table 4: Industrial Building Approvals by Municipality

1999 2002 2000 2001 Municipality ($ million) ($ million) ($ million) ($ million)

Greater Dandenong $27.6 $40.7 $24.0 $38.0 Kingston $16.9 $11.2 $13.3 $21.7 Hume $22.7 $75.9 $18.7 $20.9 Brimbank $20.0 $13.2 $ 8.9 $12.6 Knox $ 6.5 $ 9.7 $23.0 $ 6.7 Maroondah $ 7.8 $11.7 $11.7 $ 6.7 Wyndham $18.0 $16.6 $ 7.2 $ 5.6 Monash $13.4 $14.2 $ 5.3 $ 5.6

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The growth in activity in the northern and western regions in recent years, attributable to the opening of the Western Ring Road and the relative abundance of inexpensive land, stabilised somewhat in 2001. New industrial construction in Municipalities such as Maroondah, Knox and Wyndham fell away in 2002 relative to recent trends, while the Municipalities of Kingston and Greater Dandenong, by comparison, saw a marked increase in activity.

7.1.6 Outlook The state of the economy at any point in time remains a key determinant of the performance of industrial property markets. The figure below depicts the relationship between Australian economic growth and the investment performance of industrial property over the last 15 years. Clearly evident is the dramatic fall in returns experienced by owners of industrial property during the recession of the early 1990s.

Over the short to medium term, the economic outlook both nationally and for Victoria remains relatively positive, with this assisting to underpin demand for industrial space. However, the most significant downside risks remain the uncertain outlook for the global economy and further developments in the Middle East.

Figure 8: GDP Growth Vs Industrial Property Performance

30% 6%

25% 5%

20% 4%

15% 3%

10% 2%

5% 1% Annual growth Annual return 0% 0%

-5% Australian Industrial (LHS) -1% GDP Growth (RHS) -10% -2%

-15% -3% Dec-85 Dec-87 Dec-89 Dec-91 Dec-93 Dec-95 Dec-97 Dec-99 Dec-01 Year ending

7.2 Port Melbourne Industrial Property Market

7.2.1 Development Trends Port Melbourne / Fishermans Bend has undergone substantial redevelopment over the past 5-10 years and is now highly sought after, particularly given its proximity not only to the Melbourne CBD, but the West Gate Freeway which, combined with the recently completed CityLink, provides convenient access to all regions of Melbourne. The area is characterised by a mix of older style and modern facilities interspersed with a number of sites suitable for redevelopment. In particular, several multi-unit commercial/industrial parks have been developed through either the redevelopment of older style facilities or development of vacant land.

New high quality office / warehouse accommodation has proved attractive to a wide range of occupants, with often generous office ratios which allow the consolidation of business operations to one location. In addition, lessees are able to commit to secure lease agreements within contemporary buildings, investors are able to benefit from minimal capital expenditure requirements and depreciation benefits, and owner occupiers are able to capitalise on the

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relatively low interest rates and reduced capital expenditure outlays associated with a new, contemporary facility.

The development of business parks within the precinct, together with a continuation of the trend for tradition land uses relocating elsewhere, will contribute to the overall amenity of the area which will further support a shift towards more office related uses albeit with some warehousing components.

7.2.2 Development Sites Development sites within the Study Area have recently been selling for $250 - $500 p.s.m. for vacant sites, and up to $1,000 per square metre for sites with buildings offering potential for refurbishment. Recent sales of industrial development sites in the Port Melbourne area have been selected and are presented below. By comparison vacant industrial sites within the Monash industrial precinct are in the order of $220-250 p.s.m.

The premium for sites with a Business 3 zoning is considered to be in the order of 20% over that of equivalent development sites zoned Industrial 1. This premium reflects the increased flexibility provided by a Business 3 zoning and the opportunity for more intensive forms of development to be undertaken. It is however noted that a Industrial 1 zoning is largely ineffective in containing the level of office development with recent forms of development comprising individual office / warehouse which individually have less than the maximum of 500 sq.m. allowed under the Industrial 1 zoning provisions, but in aggregate considerably exceed this level.

Table 5: Sales Schedule – Industrial Development Sites (Port Melbourne) Land Analysed Sale Price / Address Area Land Rate Zoning Comments Date (sq.m.) p.s.m. Development site with frontages to Williamstown 437 Williamstown $14,000,000 Road, and Plummer and Road, 40,470 $346 Business 3 7/01 Graham Streets. Port Melbourne Business 3 zoning, older style industrial building. 262-292 Lorimer Older style aircraft $22,000,000 Street, 82,340 $273 Industrial 1 manufacturing buildings, 8/2002 Port Melbourne total area 41,585 sq.m. Development site, terms 173-187 Salmon $7,200,000 10% deposit, balance 25 Street, 32,650 $221 - 5/01 days since subject to Port Melbourne tender. 195-201 Two older style Williamstown $5,000,000 11,550 $433 - warehouse buildings, total Road, 8/02 7,683 sq.m. Port Melbourne Fronts Thackray Road and Salmon Street. 15 Thackray Road, $4,750,000 Single storey office 848 10,930 $398 Industrial 1 Port Melbourne 11/01 sq.m. Office / warehouse 5591 sq.m. Industrial 1 Zone. 471 Williamstown Modern double storey $4,100,000 Road, 8,467 $484 - office, small warehouse, 10/02 Port Melbourne total area 2,100 sq.m. Industrial development site, Business 3 Zone, 225 Boundary $3,615,000 fronts boundary Street, Street, 8,671 $417 Business 3 10/01 limited frontage to Ingles Port Melbourne Street and abuts the West Gate Freeway.

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Land Analysed Sale Price / Address Area Land Rate Zoning Comments Date (sq.m.) p.s.m. Vacant development 81 Lorimer Street, 2,800,000 site, excellent eastern 3,535 $792 Business 3 Port Melbourne 5/02 exposure, Business 3 Zone. 290 Normanby Corner Ingles Street, old $2,300,000 Road, 2,331 $987 Industrial 1 style building, 3,107 3/01 Port Melbourne sq.m., now refurbished. Vacant site, corner 319 Plummer $1,800,000 Plummer and Prohasky Street, 4,856 $371 Industrial 1 6/02 Streets. Industrial 1 Port Melbourne Zone. Office / warehouse 1,241 sq.m. associated 265 Ingles Street, $1,450,000 2,078 $505 Industrial 1 concrete paved car Port Melbourne 3/02 parking. Industrial 1 Zone. Vacant industrial site, 1 Westside Drive, $1,250,000 three road frontage, ,no 3,427 $365 Business 3 Port Melbourne 8/01 exposure. Business 3 Zone. Vacant site, western extremity of Lorimer Street. Permit 4,000 222 Lorimer Street, $720,000 1,236 $583 Industrial 1 sq.m. of warehouse. Port Melbourne 6/02 Previous sale $430,000 – December 1999. Industrial 1 Zone. Vacant site, Industrial 1, 220 Lorimer Street, $600,000 1,183 $507 Industrial 1 previous sale $425,000 Port Melbourne 7/02 February 2000

A comparison with prime industrial development sites within Melbourne’s eastern region indicates that values are significantly lower within that region with sites selling for below $300 p.s.m (refer Table 6). Table 6: Sales Schedule – Industrial Development Sites (Eastern Region) Sales Schedule Site Value Comments Sale Price / Address Area Rate Zoning Date (sq.m.) p.s.m. 7-17 Geddes Street, 8,640 $2,150,000 $249 Business 3 A “Business 3” zoned Mulgrave 3/03 site featuring a frontage of 129 metres, whilst rear exposure to the Monash Freeway. Sold subject to a short-term tenancy until September 2003 although ultimately purchased for redevelopment.

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Sales Schedule Site Value Comments Sale Price / Address Area Rate Zoning Date (sq.m.) p.s.m. 769-781 Springvale 15,910 $4,650,000 $292 Business 3 A “Business 3” zoned Road, 11/02 site with a 95 metre Mulgrave frontage, improved by an older style office/warehouse facility considered to be of no added value to the site. It is the intention of the purchaser to redevelop the holding. 2161-2181 Princes 15,980 $3,000,000 $188 Business 3 Irregular shaped Highway, 1/02 “Business 3” zoned site Clayton with a frontage of 127.25 metres to the northern side of Princes Highway, together with a secondary street frontage of 206.47 metres to the western side of Garden Road. Highly exposed site. Edward, Hamilton & 11,300 $1,400,000 $124 Industrial Industrial development Muller Streets, 4/01 site without main road Oakleigh exposure but featuring three street frontages, improved by a number of older style industrial buildings, the majority of which have been retained. 853 Stud Road, 96,910 $9,250,000 $ 95 Industrial Vacant land (ex. Scoresby 1/01 Amcor), subsequently developed by Kingston Properties as Central Industry Park. Cnr Wellington & 33,240 $4,350,000 $131 Industrial Former Besser Garden Roads, 11/00 manufacturing facility Mulgrave with frontages to both Wellington and Garden Roads, subsequently developed into the Wellington Road Business Park.

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7.3 Supply Assessment: Recently Completed Projects Recently completed developments within, or in close proximity to, the Study Area have been analysed in order to provide an indication of the characteristics, key developers and the nature of tenant demand

7.3.1 Business Parks

Dockside Business Park (Lorimer Street) A new office / warehouse building with Lorimer Street frontage on the former Schweppes Cottees site. Schweppes have relocated their operations to Geelong Road, Brooklyn.

This site incorporates the BMW Bodyshop to the eastern boundary and a 2,800 sq.m. office / warehouse to the western boundary.

Cititech Business Park (Cnr Todd Road and Wharf Road) Kraft have taken up space for a large office / warehouse on Wirraway drive, following the pre-commitment withdrawal by British Aerospace. The extensive building is predominantly office space, but is also operated as a research and development facility. There are approximately 350 spaces in a multi-level car park.

Citilink Business Park The Citilink Business Park contains 13 office / warehouse units totalling 23,000 sq.m. and a three level car park. The development was undertaken by Salta Properties and completed in mid 2001.

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Bridgeside Business Park (Lorimer Street) A business park at the western end of Lorimer Street that comprises a number of small office / warehouse units. This project has been developed over an extended period primarily due to its relative isolation at the western end of Lorimer Street, away from any major access point into Fishermans Bend.

Comtech Business Park (Salmon Street) An industrial subdivision of 16 office / warehouse units adjacent to the Salmon Street overpass. The site is being marketed by the Industrial Consultancy Group (ICG) and has units ranging in size from 105 sq.m. to 887 sq.m. (total building area). Construction of the units is complete, with some of the units along the northern boundary being tenanted. All units on the Southern boundary are available for sale or lease following more recent completion. Prices ranged from approximately $220,000 to $1.76 million.

Gateway @ Port (Cook Street) Currently under construction and being developed by Salta Properties, the site will contain 19 office / warehouse units upon completion. The site is located on the north west corner of Salmon and Cook Streets, adjacent to the Salmon Street overpass. Areas in the development range from 670 sq.m. to 1,561 sq.m., and the development incorporates a multi- level car park. Units are available for lease only. The site is benefited by direct access to the inbound lane of the West Gate freeway.

304 Lorimer Street

A proposed business park totalling 70,000 sq.m. to the value of $100 M. The 8.3 ha site was acquired by Austexx Developments Pty Ltd for $22 M.

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7.3.2 Port IT (Turner Street)

This innovative office-warehouse unit project is being undertaken by Investa Property. Located at the north-west corner of Turner and Hall Streets it is well under construction with the first stage already occupied and further construction now taking place.

This development concept has experienced market success with the built form in this project representing somewhat of a departure from traditionally accepted forms in this locality. Whilst the trend towards higher office to warehouse ratios has been observed over the course of the 1990s, Port IT has reinforced this trend further with many non-traditional, business services oriented tenants (such as human resources firms, marketing firms, technology and designers, etc) taking up occupation.

7.3.3 Office / Warehouses

Wirraway Drive This purpose built development includes approximately 3,000 sq.m. of office space and 8,000 sq.m. of warehouse. The development has an end value of $7.5 Mill.

Globe Clothing: 300 Lorimer Street Globe Clothing have a 10 year lease for an office / warehouse that includes a 7,000 sq.m. warehouse and 5,000 sq.m. office. Challenger International recently purchased the property from Salta Properties. Globe are believed to have been attracted to the site due to its inner city location, proximity to the Yarra River and Pier 35 which is seen to be generally consistent with the firm’s image. The property was recently purchased from Salta Properties by Challenger international

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7.3.4 Commercial Offices

Toyota Head Office The existing buildings at 120-155 Bertie Street have been demolished to make way for a 4 level, 10,000 sq.m. building for the Toyota Head Office. Tenders were due in late 2002 following an extension. The project has an end value of $30 M.

830 Lorimer Street Salta Properties were granted planning approval in mid- 2001 for a ten level office building and multi-storey car park. This provides for 20,434 sq.m. of net floor space and 825 car spaces. Also proposed are five office / warehouses totalling 6,505 sq.m. with 53 ground level car spaces. The office building is to face Lorimer Street and the office / warehouses to front Turner Street. No pre-commitments have been announced for the development.

7.3.5 Other

Subaru Interactive (Lorimer Street) The redevelopment of the former Ralph’s Meats abattoir site has resulted in showroom based Subaru dealership that incorporates extensive service and office facilities. The showroom has Lorimer Street frontage and differentials itself from standard dealerships with various on-site facilities. In close proximity to the site are a Land Rover, Volvo and Saab dealerships highlighting the changing nature of Port Melbourne, particularly given its close proximity to the Docklands precinct. Also of note is the BMW Body Shop also on Lorimer Street, however this does not include showroom facilities. The site has become the hub for official Subaru servicing, the Australian office for Subaru Technica International and Australian Subaru rally team.

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The Base (Cnr Salmon Street and Williamstown Road) A Securaway Self Storage has been constructed on the prominent corner of Williamstown Road and Salmon Street. Developed by MAB Corporation, this site forms part of The Base development. There are an additional 14 office / warehouse units in the development. Also on the site is an 800 sq.m. speculative building. The single level building incorporates a flexible design that allows it to be divided into multiple spaces for a number of tenancies, or for a single tenant to lease the entire space.

Holden V6 Engine Plant (Todd Road) A new 32,000 sq.m. V6 engine plant that will that will supply both Holden and General Motors affiliates with a new light-weight aluminium engine. The $400 M development was opened in October 2002 and constructed by Baulderstone Hornibrook.

Defence Science & Technology Organisation (DSTO) Includes the construction of new buildings and upgrading of some existing buildings, as a result of relocation of the Aeronautical and Maritime Research Laboratories. There is substantial construction activity along the western boundary of the site.

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7.4 Potential Development Sites

OneSteel Site The OneSteel site at 706 Lorimer Street was offered for sale in December 2002 following a review of OneSteel’s national property portfolio. The site comprises a number of older style industrial buildings on 3.34 ha. The current use no longer reflects the highest and best use and thus has redevelopment potential at the completion of a short-term leaseback arrangement to OneSteel. The public tender was conducted by CB Richard Ellis.

Telstra Site The Telstra site at 471 Williamstown Road was sold at auction on October 17, 2002 for $4.1 million ($484 p.s.m.). The site itself was sized 0.85 ha, with buildings on the site totalling 2,100 sq.m. The site has potential for either owner occupation or redevelopment. The purchaser has yet to be disclosed.

Thackray Road (Corner Wool Board Road)

The 2.9 ha site on the corner of Thackray and Wool Board Road recently went to auction. There are no useable buildings on the site which presents a large development opportunity. The site is enhanced by direct exposure to the West Gate and City Link Freeways.

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8. STUDY AREA: INDUSTRY AND PROPERTY MARKET OVERVIEW This Section of the Study draws upon analysis undertaken and presented in the preceding Sections to provide an assessment of the strategic attributes of the Study Area, and the likely future direction of development within the Study Area. Whilst the property market plays a role in facilitating the pattern of development which occurs within the area, it primarily reflects underlying demand for industrial accommodation based upon the changing requirements of industry.

Research undertaken on the location decisions of businesses (refer Section 1) highlighted the role of the Study Area as a strategic location for a range of more intensive activities such as business services requiring storage facilities, and the operations of clothing wholesalers. Such activities are primarily attracted to the area by recent investments in road infrastructure that have improved accessibility into area, proximity to the Melbourne CBD and the Docklands precinct, and the opportunity to obtain office / warehouse accommodation in an inner city location.

Whilst the profile of the Study Area as an industrial location has been raised considerably over recent years, it is still regarded as a secondary office location. This is primarily due to the generally lower amenity of the area, poor public transport facilities and lack of supporting facilities such as retail centres, cafes and food outlets. Whilst the Study Area caters for office based uses requiring associated storage / warehousing facilities, it has also begun to attract business services such as accountants and recruitment agencies that generally do not require such facilities but which may value an affordable inner city location offering parking facilities and freeway access.

This trend towards more intensive uses is expected to continue to strengthen in the future in response to the ongoing gentrification of traditional inner city industrial areas such as South Melbourne. Port Melbourne (excluding the Study Area), Richmond and North Melbourne, and the resulting increase in traffic congestion, parking constraints, increasing property values and a general shortage industrial accommodation as existing properties are converted for alternative uses such as residential or retail.

Earlier sections of this Report have highlighted the impact of the restructuring of Australian industry and larger manufacturing organisations upon the organisation of business functions. The outsourcing of non-core functions has enabled functions to locate independently of other unrelated ones that may once been forced to co-locate as part of a large corporate structure. This has resulted in reduced demand for large industrial sites and the disposal of surplus land requirements for redevelopment of alternative uses particularly within inner urban locations. This reorganisation of industrial and related activities has been reflected in property markets and creating further impetus for change within locations including the Study Area.

Activities associated with advanced manufacturing are diverse, ranging from the manufacturing of customised components through to design services that have a high intellectual property component. The location requirements of each also vary significantly with the latter requiring access to clients on a more frequent basis, a factor which has promoted the establishment of a number of aerospace and automotive design and engineering services firms within the Study Area over recent years. The property requirements of such activities may be generally categorised as office / warehouses consistent with the recent forms of development which has occurred in the Study Area over recent years.

Property values within the Study Area reflect the increasing demand for industrial properties that cater for more intensive activities, as well as the general attributes of the location in terms of accessibility for the warehousing and distribution of high value products. The premium for development sites zoned Business 3 is in the order of around 20% over Industrial 1. The extent of this premium is constrained by the underlying demand for higher office components within developments. The extent of demand for industrial sites within the Study Area, relative to competing locations within Melbourne middle eastern suburbs, is reflected in the differential in property values. Underlying land values within the Study Area are in the order of $250-$500 p.s.m. depending upon location and size, which is considerably higher than in the Monash technology precincts where site values are generally under $250 p.s.m.

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Strategically, the Study Area is well positioned to attract more intensive forms of development as traditional industrial uses respond to market pressures and relocate to middle and outer suburban locations. Similarly, the continuation of the trend towards the outsourcing of service components by the automotive and aerospace industries, together with growth in the business services and wholesaling sector will continue to increase demand for developments which contain a higher component of office floorspace.

Activities related to the Port of Melbourne may in the future seek to locate on freehold land within the Study Area, at a higher rent than currently paid under current arrangements with the MPC. The ability of port related uses to afford market rentals will depend upon the impact of future increases in port activity upon profitability levels. Alternatively, underlying land values may be seen as a factor restricting competition from new firms seeking to undertake similar port related activities.

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9. STRATEGIC PLANNING: POLICY CONTEXT The evolving role of Fishermans Bend as a location for economic activity reflects a range of market and policy influences that have influenced the distribution of activity across metropolitan Melbourne. The most important factor that has influenced the nature of land use within Fishermans Bend over recent years has been the increased accessibility that has resulted from major road infrastructure projects.

The completion of the Western Ring Road (WRR) in 1997 has enabled some of Port Melbourne’s traditional occupants requiring larger sites to relocate to less expensive purpose-built industrial subdivisions in Laverton North and Altona North. Such locations offer excellent access to the Westgate / Princes and Hume Freeways. Similarly, the completion of the CityLink (Western Link) in August 1999 and the Domain Tunnel in April 2000 has reinforced the central location of Port Melbourne and accessibility to Melbourne’s eastern suburbs and northern suburbs including the Melbourne Airport.

9.1 Melbourne 2030 Melbourne 2030 – Planning for a Sustainable Future was released in October 2002. Whilst its greatest implications relate to residential development, there is significant potential impact upon commercial and industrial development across Melbourne. Perhaps the most important policies for the Fishermans Bend precinct relate to Key Direction 3 (Networks with Regional Cities) and Key Direction 4 (A More Prosperous City).

Melbourne 2030 recognises the Port of Melbourne and associated rail and road networks as key elements supporting Victoria’s competitiveness in global markets. They provide a strong foundation for an innovative economy incorporating the logistics industry. The efficient management of the Port of Melbourne’s operating environment is critical to the vision of Melbourne as a prosperous and sustainable city.

Whilst the Port of Melbourne and the associated Dynon transport hub is geographically constrained on all sides there is still considerable growth potential through the more efficient use of existing land and potential new berths at West Webb Dock. A major constraint, currently under investigation however, is the long-term need for channel deepening in Port Phillip Bay to provide for the trend towards deeper draught vessels. Redevelopment of the Dynon transport precinct through the relocation of the wholesale markets and extension of Dock Link Road offers the potential to improve efficiency through better use of land, a shift to rail transport and improved integration between road, rail and sea. Increasingly there will be a shift from road to rail transport of containers.

Melbourne 2030 further supports the development of an innovation economy through encouraging the expansion and development of logistics and communications infrastructure. The development of business clusters (such as IT at South Melbourne and automotive and aviation at Port Melbourne – refer Figure 10) is supported via the Government’s Innovation Economy policy..

At a strategic level, Melbourne 2030 identifies the development of new industrial areas in Epping and Derrimut. This will provide an opportunity for any land-extensive uses currently operating in Port Melbourne to relocation to potentially more appropriate locations.

Melbourne 2030 specifically highlights the importance of Fishermans Bend as a future employment node. It forecasts that employment could more than treble by 2020 but it states that planning must ensure that new development in Fishermans Bend does not jeopardise the needs of the adjoining Port of Melbourne as a working port and as one of the State’s most important transport gateways. A number of benefits from having the Port of Melbourne close to the centre of Melbourne have been identified including opportunities for joint promotion, the integration of infrastructure and e-commerce projects, and land-use planning.

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Figure 9: Key transport infrastructure elements

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Figure 10: Key Industry Clusters

Source: Department of Infrastructure, Department of Innovation, Industry and Regional Development

9.2 City of Melbourne: City Plan 2010 and Port Melbourne Structure Plan City Plan 2010 is the strategic planning policy prepared by the City of Melbourne as the relevant local authority for the Fishermans Bend precinct. The 1999 Port Melbourne Structure Plan was prepared by the City of Melbourne and relates to Fishermans Bend. The main thrusts of this Plan have been largely reflected in City Plan 2010.

City Plan 2010 has established six strategic objectives for Fishermans Bend being:

Objective 1 Facilitate the development of Port Melbourne as the preferred location for clean, value- added manufacturing research and development in accordance with the Port Melbourne Structure Plan 1999;

Objective 2 Strengthen and retain existing industry and support a mix of industrial, research and development and commercial development and uses in the area, including services to support the area's workforce;

Objective 3 Maintain and improve road, public transport, pedestrian and cycle access and links to and from the area, while minimising impacts on the environment and safety;

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Objective 4 Improve environmental values by upgrading the vegetation and landscaping within Westgate Park and along the Yarra River;

Objective 5 Improve infrastructure in the public realm and facilitate the development of the 'soft' infrastructure of Port Melbourne to support its development as an advanced manufacturing area AND

Objective 6 Upgrade and link the area by providing a comprehensive open space network between the Yarra River, the Port Phillip Bay foreshore and the Central City.

Given that employment in the area is forecast to expand to 20,000 people by 2020 as further development occurs, City Plan 2110 recognises the importance of establishing appropriate public transport services and enhanced services to support employees and businesses. The Strategy suggests that this could be potentially achieved through the extension of Bourke Street tram services over the Yarra River through Mirvac’s Yarra’s Edge to link with Turner Street.

Other long-term visions for Fishermans Bend that have the potential to influence future forms of development within Fishermans Bend include:

Improvement to the open space network and visual links to the water along the north side of Lorimer Street; and Designation of the area east of Bolte Bridge as a buffer zone between the residential and industrial zones through the encouragement of ‘clean’ industrial uses and support services.

9.3 Infrastructure Provision: Investing For Our Future In May 2000, the State government appointed the Infrastructure Planning Council (IPC) to provide independent advice on Victoria's infrastructure requirements for water, energy, transport and communications networks over the next 20 years. The IPC was also to prepare a framework of principles for assessing Victoria's future infrastructure requirements.

The State Government received the Final Report of the Infrastructure Planning Council (IPC) in August 2002. The Government’s response entitles ‘Investing For Our Future’ was released in September 2002 identified a number of priorities with respect to public works projects.

In relation to the Port of Melbourne, the IPC recommended the need to shift from a current dependence on road access, which the Council considered unsustainable, to a greater reliance on rail access. Currently, the Port operates primarily as a road-based port with the rail terminals served via a road connection (except the on-dock rail link to Swanson dock). Rail traffic from the existing on-dock terminals (and future terminals) is limited by the capacity of the sidings and the positioning of Footscray Road. The IPC made a number of recommendations to support a shift of freight to rail including securing effective buffers to protect the operations of Victoria’s ports, particularly the Port of Melbourne.

The IPC recommended that the State Government substantially upgrade Victoria’s freight network, including achieving a major shift of freight to rail, through a number of measures including:

Providing the required standard gauge rail network access into Melbourne and the Port of Melbourne; and Securing effective buffers to protect the operations of Victoria’s ports, particularly the Port of Melbourne.

In relation to its findings on road infrastructure, the IPC claimed that, based on a recent study, the West Gate Bridge will be at capacity by the year 2007. Accordingly it recommended that an

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urgent review be undertaken to determine whether the West Gate Bridge can be augmented, or whether a second crossing is required.

The IPC report suggests two possible means for improving rail access to the Port. One proposal would be to move Footscray Road to the north of the Dynon precinct. Access via standard and broad gauge would then be provided to the on-dock terminals so that containers could move in and out by rail. This would avoid the need to unload at Dynon and for containers to be trucked to the different terminals. Alternatively, grade separation, by level, of Footscray Road with rail could be undertaken. In each case, additional on-dock facilities would be required.

9.4 State Planning Policy Framework (Industry) The State Planning Policy Framework provides policy guideline for the management of industrial activity. That key policy objective is ‘to ensure availability of land for industry and to facilitate the sustainable development and operation of industry and research and development activity’17.

The policy also contains a number of a number of recommendations with respect to the implementation of the policy that are of particular relevance to the Fishermans Bend precinct being:

Industrial activity in industrial zones should be protected from the encroachment of unplanned commercial, residential and other sensitive uses that would adversely affect industry viability. Existing industrial areas that include key manufacturing or processing industries; a major clustering of allied industries; key industrial infrastructure should be protected and carefully planned where possible to facilitate further industrial development; Responsible authorities should not approve non-industrial land uses which will prejudice the availability of land for future industrial requirements in industrial zones; Responsible authorities should ensure that industrial activities requiring substantial threshold distances are located in the core of suitably zoned industrial areas and encourage activities with minimal threshold requirements to locate towards the perimeter of the zone; Responsible authorities should, where possible, minimise inter-industry conflict and encourage like industries to locate within the same area; and Industrial uses that meet appropriate standards of safety and amenity should be encouraged to locate within activity centres.

9.5 City of Port Phillip Planning Scheme (Industrial Areas Policy) This policy provides specific guidelines with respect to the management of industrial activity within that portion of the Port Melbourne Industrial Precinct within the City of Port Phillip. Key policy directions include:

Discouraging the use of industrial land in the Fishermans Bend area of Port Melbourne and South Melbourne for higher order commercial and residential land uses; Encouraging a range of new and existing industrial, mixed industrial/commercial and warehouse uses to consolidate the long term industrial function of the area; Supporting the area's transition from a traditional manufacturing area to one which contains employment-intensive, clean and sustainable industrial activity, including high technology uses, offices and other labour intensive industries; Generally supporting existing long standing traditional industry; Discouraging the use of Williamstown Road by additional traffic and heavy vehicles and encourage access to industrial sites via alternative streets; and Encouraging new office and associated commercial uses to locate along Williamstown Road to act as a buffer between the industrial uses to the north and residential areas to the south.

17 State Planning Policy Framework: Clause 17.03

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9.6 Melbourne Port Corporation: Port of Melbourne Land Use Plan The Port of Melbourne Land Use Plan outlines the Melbourne Port Corporation’s (MPC) vision for the future planning and development of the Port of Melbourne. It establishes a framework for the MPC and other planning agencies to ensure that ‘the Port has sufficient capacity to meet trade expectations, having regard to efficiency and environmental sustainability as well as amenity issues at the interface with other land uses’.

The Plan identifies a number of challenges facing the Port including ‘co-existing with its neighbours by minimising disturbance from port operations and ensuring that encroachment of sensitive uses does not impact upon port viability.’ Key interface issues identified by the Plan include:

Changes to adjoining land use from industrial or open space to more sensitive uses that can impact upon 24 hour port operations; The presentation of port land where it adjoins urban areas; The management of the impact of port operations outside the Port boundary, particularly truck traffic; and The need for high quality design and viewlines to be considered in Port developments.

A need to retain the existing stock of suitably zoned industrial land in the areas surrounding the Port in Fishermans Bend has been identified in the Plan. Such land will be required to accommodate cargo-related activities that are displaced by the expansion of berth and land requirements for containers and multi-purpose cargo handling within the Port. Activities affected include container parks and depots, cold stores, packing and unpacking depots and distribution centres which require near-port locations in order to attract cargoes to the Port. Rising land values within Fishermans Bend have been identified as impacting upon the type of port related uses that can be located in the area.

The Plan also identifies the potential for some form of buffer in planning controls that consider amenity issues within the context of existing and potential land uses adjacent to the Port. Such an approach would ‘address the maintenance of buffers that are now provided by abutting industrial zones’.

9.7 City of Port Phillip: Port Phillip Industry and Business Strategy This Strategy was developed by the City of Port Phillip in response to an increasing number of requests for the rezoning of industrial land for higher-order uses, primarily residential and to a lesser extent retail or office uses. The City of Port Phillip’s boundary encompasses that part of Port Melbourne to the south of the West Gate Freeway and east of Todd Road, which is characterised by a significant stock of industrial land.

The study that formed the basis for the Strategy considered key council objectives to maintain and enhance industrial and business areas that:

Co-exist harmoniously with adjacent residential and other land-use precincts and not compromise the amenity of nearby areas; Emphasise Port Phillip's competitive industry strengths; Maximise job opportunities; and Support the role of Fishermans Bend, Port Melbourne as the industrial hub of Port Phillip.

The Strategy identifies a number of specific objectives for the Fishermans Bend precinct (south of Williamstown Road) being:

To encourage the consolidation of existing industrial uses in the precinct; To acknowledge the precinct’s role of providing for potential port related industry; To minimise amenity impacts on adjacent residential areas from industrial use and development in the precinct; To ensure availability of large sites for continued use by manufacturing, port related uses and transport/ distribution industry; and To establish appropriate infrastructure to support industrial development in the area.

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The Strategy proposed that these objectives be met through:

Maintain the Fishermans Bend industrial zoned land as the core industrial area in the City of Port Phillip; Maintain the Industrial 1 Zone for the core area of the precinct that is generally bounded by West Gate Freeway, Todd Road, Plummer Street, Woodruff Street and Ingles Street; Encourage the retention of existing large lot sizes throughout the core industrial precinct; Consolidate the Williamstown Road Business 3 Zone for the whole length of Williamstown Road; Encourage low impact uses such as offices and showrooms along the Williamstown Road frontage to provide a buffer between the core industrial; and Lobby the State Government to introduce planning control over a container depot use in the Industrial 1 and 3 Zones of the VPPs (i. e. make this a permit requiring use rather than an as- of-right use).

9.8 Panel Report for the New Format Melbourne Planning Scheme, 1998

The Report of the Panel and Advisory Committee for the new format Melbourne Planning Scheme (April 1998) made only brief reference to the Fisherman’s Bend / Port area. In discussing physical form the report states:

Docklands to the west of the CBD is a prime development area, but whose future lies largely outside the ambit of the LPPF within the Melbourne Planning Scheme. Likewise, the Port of Melbourne is covered by its own planning scheme.

Nevertheless, there are important industrial areas within the municipality at Fisherman’s Bend and West Melbourne. These include the Melbourne Freight Terminal and Melbourne Wholesale Fruit and Vegetable Market. Some of the other traditional industrial areas of North and West Melbourne are undergoing a similar change to many other inner industrial areas. There is a decline in industrial activity and an increase in residential and mixed commercial activity. (Page 4)

The Panel makes no judgement about the appropriateness of zones proposed for the Fisherman’s Bend precinct other than recognising that the land is ‘essentially retained in an Industrial Zone with a Business 3 Zone applying along the south side of Lorimer Street.’

The Panel also recognises the key role that Fisherman’s Bend plays in a capital city sense. Its states:

In understanding planning for the City of Melbourne, it is important to recognise that whilst the CBD, Southbank and St Kilda Road all clearly fulfil capital city functions, there are other local areas which remain outside the ambit of this function. Between these two extremes lie the other business, industrial and mixed use areas of the municipality. Some of these, such as Fisherman’s Bend and the transport and market related areas along Footscray and Dynon Roads clearly serve a capital city role. (Page 8).

The Panel also recognised the introduction of Design and Development Overlay Schedule 8 and the additional requirements it imposed in terms of referral authorities. The Panel report states:

Clauses 2.2 of this Schedule provides for a formal referral to the Docklands Authority of an application to use land under the zoning of the land or to construct a building or works over seven metres in height. (Page 60)

The panel recommended no change to the provisions at the time of writing, but recommended that all formal and informal referral authorities be requested to confirm that they wish to remain as a referral authority included in the Melbourne Planning Scheme at this stage.

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One submission was received in relation to land in the Study Area from Salta Properties Pty Ltd. The submission requested that that the site at 830 Lorimer Street, Port Melbourne, be included within a Mixed Use Zone (MUZ) as opposed to the exhibited Business 3 Zone (B3Z). Council recommended no change to the proposed B3Z because:

the introduction of the B3Z was supported by the Minister; MUZ would allow residential uses into the area which would be detrimental to the interests of existing industry; and the B3Z caters for the blurring between office and production functions that has become evident in the area.

The Panel noted that the zoning of the site to B3Z has recently received the support of the Minister for Planning and supported the recommendations of the Council and recommended no change to the exhibited zone.

State Planning Policy Framework (MPS)

The following issues relevant to the Study Area are addressed within the SPPF:

Planning for Urban Settlement; Metropolitan development; Activity Centres; Industry Business; Ports Car Parking and Transport Developer Contributions

Clause 14.01: Planning for Urban Settlement

The objective of Clause 14.01 of the SPPF is as follows:

“To ensure a sufficient supply of land is available for residential, commercial, industrial, recreational, institutional and other public uses. To facilitate the orderly development of urban areas”.

Clause 14.02: Metropolitan Development

The objective of Clause 14.02 of the SPPF is as follows:

To assist achievement of a metropolis which has:

A business environment conducive to sustainable long-term economic growth. An international transport and communications hub function. Strengthened links with regional Victoria to increase economic competitiveness. Enhanced environmental quality and liveability for the metropolitan population. Improved functioning through best practice management of its infrastructure and urban development.

Under General implementation the Planning Scheme states:

The Capital City role of the City of Melbourne as the major Victorian focus of activity in finance, retail, commerce, tourism, culture and entertainment is to be strengthened in planning for inner Melbourne.

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Clause 17.01 Activity Centres

The objective of Clause 17.01 is:

To encourage the concentration of major retail, commercial, administrative, entertainment and cultural developments into activity centres (including strip shopping centres) which provide a variety of land uses and are highly accessible to the community.

Amongst other things, Activity Centres should be planned to:

Incorporate and integrate a variety of land uses, including retail, office, education, human services, community facilities, recreation, entertainment and residential uses where appropriate. Provide good accessibility by all available modes of transport (particularly public transport) and safe pedestrian and cycling routes, and to encourage multi-purpose trip-making to such centres. Facilitate ease of pedestrian movement between components of centres, public transport interchanges and parking areas.

Clause 17.02: Business

The objective of Clause 17.02 of the SPPF is as follows:

To encourage developments which meet community’s needs for retail, entertainment, office and other commercial services and provide net community benefit in relation to accessibility, efficient infrastructure use and the aggregation and sustainability of commercial facilities.

In implementing this policy:

Commercial facilities should be located in existing or planning activity centres unless they are:

New freestanding commercial developments in new residential areas which have extensive potential for population growth or will accommodate facilities that improve the overall level of accessibility for the community, particularly by public transport.

Clause 17.03: Industry

The objective of Clause 17.03 of the SPPF is as follows:

To ensure availability of land for industry and to facilitate the sustainable development and operation of industry and research and development activity.

Clause 17.03-2 states:

Industrial activity in industrial zones should be protected from the encroachment of unplanned commercial, residential and other sensitive uses which would adversely affect industry viability. Planning authorities should zone land for industrial development in urban growth areas where good access for employees and freight transport is available and where appropriate buffer areas can be provided between the proposed industrial land and nearby sensitive land uses.

Planning authorities should protect the quantum of large areas of industrial land of state significance to ensure availability of land for major industrial development, particularly for industries and storage facilities that require significant threshold distances from sensitive uses.

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Clause 18.02: Car Parking and Public Transport Access to Development

The objective of Clause 18.02 of the SPPF is as follows:

To ensure access is provided to developments in accordance with forecast demand taking advantage of all available modes of transport and to minimise impact on existing transport networks and the amenity of surrounding areas.

In considering car parking and public transport access, the Responsible Authority should consider:

All modes of transport from walking to freight vehicles in providing access to new developments; Integrated public transport services to be included within the new development; and The allocation of land for car parking must have regard for off-street parking demand, road capacity, potential demands for car parking and providing efficient car parking through the consolidation of car parking facilities.

In regards to car parking plans, the Responsible Authority should prepare or require the preparation of precinct plans for the design and location of car parking. Precinct plans should provide for the following:

Protection of the role and function of nearby roads to enable ease of use including the movement and delivery of goods; High standard of design able to protect the amenity of the locality including pedestrians and other road users; A safe environment for users, particularly at night time; and The facilitation of public transport.

Clause 18.05: Ports

The objective of Clause 18.05 of the SPPF is as follows:

To recognise the importance to Victoria of economically sustainable major ports (Melbourne, Geelong, Portland, Hastings) by planning for appropriate access, terminal areas and depot areas.

To plan the land resources adjacent to ports to facilitate the efficient operation of the port and port-related uses and minimise adverse impacts on surrounding urban development and the environment.

The following considerations apply to the treatment of port areas:

Land resources adjacent to ports should be protected to preserve their value for uses which depend upon or gain significant economic advantage from proximity to a port; Port and industrial development should be physically separated from sensitive urban development by the establishment of appropriate buffers which reduce the impacts associated with port activities; and Planning for the use of land adjacent to ports should aim to achieve and maintain a high standard of environmental quality, be integrated with policies for the protection of the environment generally and of marine environments in particular and take into account planning for adjacent areas and the relevant catchment.

Clause 18.12 Developer Contributions to Infrastructure

To provide for partial funding of physical and community infrastructure by use of development contributions.

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10. STATUTORY PLANNING FRAMEWORK

10.1 Existing Zones and Overlays The following zonings are found within the Study Area:

Industrial 1 Zone; Business 3 Zone; Special Use Zone – Schedule 3; Public Use Zone 1; Docklands Zone 1; Public Parks and Recreation Zone; and Road Zone – Category 1.

The most relevant of these to this study are the Industrial 1 Zone and the Business 3 Zone.

The purpose of the above zonings is as follows:

Industrial 1 Zone (IN1Z)

The Industrial 1 Zone applies to approximately 27 allotments within the Study Area and a total area of 103 hectares of land.

The purpose of the IN1Z is as follows:

To implement the State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and local planning policies.

To provide for manufacturing industry, the storage and distribution of goods and associated uses in a manner which does not affect the safety and amenity of local communities.

Uses not requiring planning permit approval include, amongst other things, Industry (other than Materials recycling), Informal outdoor recreation, Mail Centre, Road, Service Station, Shipping Container storage, telecommunications facility and Warehouse.

Uses requiring planning permit approval include a convenience shop, education centre (must not be a primary or secondary school), leisure and recreation (other than informal outdoor recreation) office (with a condition that the leasable floor area must not exceed 500 square metres), place of assembly (other than carnival and circus), retail premises (other than shop).

Prohibited uses include accommodation (other than a caretaker’s house), cinema based entertainment facility, hospital, intensive animal husbandry, shop (other than adult sex bookshop, convenience shop and restricted retail premises) and office above 500 square metres.

A planning permit is required for subdivision and for buildings and works under Clauses 33.01-3 and 33.01-4 respectively. Applications under these clauses are excerpt from the notice and review requirements of the Planning and Environment Act.

Business 3 Zone (B3Z)

The Business 3 Zone applies to approximately 56 allotments within the Study Area and a total area of 70 hectares of land.

The purpose of the B3Z is as follows:

“To implement the State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and local planning policies.

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To encourage the integrated development of offices and manufacturing industries and associated commercial and industrial uses”.

Uses not requiring planning permit approval include Industry (other than Materials recycling), Informal outdoor recreation, mail centre, office (with a condition that the combined leasable floor area for all offices must not exceed any amount specified in the schedule to the zone), road, warehouse (other than shipping container storage).

Uses requiring planning permit approval include a convenience shop, education centre (must not be a primary or secondary school), leisure and recreation (other than informal outdoor recreation, major sports and recreation facility, and motor racing track), place of assembly (other than carnival and circus), retail premises (other than postal agency and shop). Office also become a use require planning permit permission if the combined leasable floor area in the schedule to the zone is exceeded.

Prohibited uses include accommodation (other than caretaker’s house), extractive industry, hospital, intensive animal husbandry, major sports and recreation facility, motor racing track, shop (other than adult sex bookshop, convenience shop and restricted retail premises).

The primary purpose of the zone is to encourage the integrated development of offices and manufacturing industries and associated commercial and industrial uses. In this regard the zone does not require planning permit approval for the use of industry or office. The Schedule to the Business 3 Zone provides the opportunity to limit the floorspace of an ‘as of right’ office, thereby triggering the requirement for planning permit approval.

Design and Development Overlay – Schedule 8 (DDO8)

The general purpose of the DDO8 is as follows:

To implement the State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and local planning policies.

To identify areas which are affected by specific requirements relating to the design and built form of new development.

The DDO8 refers to the “Docklands Buffer Area”. The specific design objective of the DDO8 is as follows:

To ensure that the redevelopment of the Docklands Zone for a mixture of residential, office, and commercial uses is not prejudiced by the development of tall structures on nearby land, which may detract from the appearance of the area.

Clause 2.2 provides for the referral of applications for land contained within DD08 to the Docklands Authority.

An application to use land under the zoning of the land or to construct a building or works over 7 metres in height must be referred to the Docklands Authority.

10.2 Amendment C60 to the Melbourne Planning Scheme

Amendment C60 proposes to replace the existing Municipal Strategic Statement at Clause 21 with a revised Municipal Strategic Statement. A separate document called City Plan 2010 will now sit outside the Planning Scheme.

Proposed Clause 21.03-2 relates to local areas and the strategies particular to those areas. In relation to Port Melbourne (Fishermans Bend) its states:

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Port Melbourne (Fishermans Bend) is located to the west of the city, covers approximately 300 hectares of land and contains over 100 business employing approximately 7500 people. The area is home to many large advanced manufacturing organisations and corporate entities. In addition, it has a significant cluster of automotive and aerospace related organisations (including Holden Limited, Hawker de Havilland, GKN Engage and DSTO Platform Science Laboratory), including education facilities (RMIT University Department of Aerospace Engineering). Employment in the areas is anticipated to expand to 20,000 people by 2020 as further development occurs.

Amendment C60 seeks to evolve the role of the Port Melbourne (Fishermans Bend area). In this regard it states:

Port Melbourne (Fishermans Bend) is the preferred location for clean, high profile, value added manufacturing, research and development and associated services. Existing industry will be supported and it is envisaged new industrial and commercial development will locate in the area. Road, public transport, pedestrian and cycle access and circulation both to and within the area will be improved whilst minimising environmental and safety impacts.

Clause 21.05-3 of Amendment C60 seeks to introduce an advanced manufacturing and industry planning policy. The policy recognises the importance of the role of traditional manufacturing. The policy also recognises the trend for larger industry to locate on the periphery of Melbourne. The policy states:

Port Melbourne (Fishermans Bend) is undergoing a rapid transformation where manufacturing is transforming from heavy manufacturing to clean high technology (research based) advanced manufacturing, often located in business park environments. Port Melbourne (Fishermans Bend) offers the strategic benefits of co-location with other like businesses as well as proximity to a range of research and educational establishments. A significant cluster of aerospace and automotive research and manufacturing exists within Port Melbourne.

One of the objectives of Clause 21.05-3 of Amendment C60 is to develop Port Melbourne (Fishermans Bend) as the preferred location for clean, high profile value added advance manufacturing research and development and associated services.

In seeking to achieve this objective Amendment C60 outlines the following strategies:

Support for advanced manufacturing and associated research and development organisations. Support a mix of large corporate industry, research and technology based and start up business. Support improvements to the physical infrastructure, urban design and amenity of Port Melbourne. Support the development of a Corporate Precinct to attract new major manufacturing business and corporate headquarters, focussed on research and technology and discourage small scale industrial and commercial development in the precinct that is not related to advanced manufacturing and research and development issues. Support the development of the Yarra Gate precinct to enable further diversification of business and industrial support services such as limited convenience retail and professional services. Support the development of the Small Medium Enterprise precinct as a transitional areas separating larger manufacturing industries to the west from more intensive industrial businesses to the north-east and providing for a variety of business and industrial uses and business incubators.

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10.3 Rezoning Activity

Amendment C013 Amendment C013 was approved was gazetted on 27 July 2000. It rezoned 3.5 hectares of land at 194-222 Lorimer Street, Port Melbourne (Fishermans Bend) from Industrial 1 Zone to Business 3 Zone. The site was formerly owned by Aerospace Technologies of Australia and is now know as the Bridgeside Business Park.

No submissions were made to this rezoning request and the rezoning was approved without the need for a Panel Hearing.

Amendment C049 Amendment C049 proposes to rezone land 8.2 hectares of land at 280 Lorimer Street, Port Melbourne (Fishermans Bend) from an Industrial 1 Zone to a Business 3 Zone. The amendment finished its exhibition period on 14 April 2003 and six submissions have been received in response. The submissions include 3 from surrounding businesses and 3 from government departments and local authorities. The concerns raised in the objections include:

Other Likely Rezonings In addition to amendments that have been recently approved or exhibited, there are a number of landowners in the Study Area who have verbally indicated an interest in rezoning their land from the Industrial 1 Zone to a Business 3 Zone. Relevant properties in the Study Area include:

90 Turner Street 2 Douglas Street 344 Lorimer Street

A recent press release by Holden Motors also indicated an intention to locate a new headquarters on land at 191 Salmon Street, Port Melbourne.

10.4 Planning Permit Applications

The Fishermans Bend Area has undergone major changes in the last few years. The following planning permits have been issued by Melbourne City City Council, including:

Permit No Address Permit Description TP02/1169 221 Boundary St Construction of two, 6 storey buildings and a multi-level car park in accordance with the attached endorsed plans (17 February 2003) TP98/1168 349 Ingles St Construction of two buildings (comprising 13 warehouses) and associated car parking; two floodlit business panel sky signs; and creation of easement in accordance with attached plans (issued 1 April 1999) TP02/1286 262-292 Lorimer St & 1-39 To subdivide in accordance with the Wharf Rd attached endorsed plans (19 March 2003). TP98/314 332-342 Lorimer St Construction of a part four storey building for light industry and ancillary offices with associated carparking in accordance with the attached endorsed plans (21 May 1998) TP01/961 748-766 Lorimer St Construction of a four level office building with basement and ground floor car

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Permit No Address Permit Description parking in accordance with the attached plans (8 January 2002). TP01/509 220-222 Lorimer St To develop the site with alterations to an existing building to incorporate a mezzanine level and waiving of associated car parking in accordance with the attached endorsed plans (3 July 2001) TP00/1101 294-330 Lorimer St To construct a new building to be used for office and warehouse and associated car parking, loading facilities and landscaping works in accordance with the attached endorsed plans (10 January 2001). TP01/452 226 Lorimer St Extension of an existing warehouse and waiving of associated car parking requirements in accordance with the attached endorsed plans (21 May 2001) TP00/292 220-222 Lorimer St Construct a three storey building for uses as a warehouse and office and allow parking provision at a reduced rate in accordance with the attached endorsed plan (29 May 2000) TP00/1066 870-886 Lorimer St The construction of three new buildings to be used for nine offices, car parking and associated road and landscaping works in accordance with the attached endorsed plans (16 July 2001) TP01/627 222 Lorimer St The construction of a part three and part single storey building over a basement car park to be used for a warehouse and office, generally in accordance with the endorsed plans (4 July 2002) TP01/599 768 Lorimer St To construct of a part three (two storeys over and undercroft car parking area), part single storey building and associated road and landscaping works for an office and a warehouse in accordance with the attached endorsed plans (22 October 2001) TP01/928 157-171 Salmon St Construct industrial unit development with local multi-deck car park (28 March 2002) TP00/907 48-87 Turner St Development of land for offices/ warehouses and associated car parking in accordance with the attached endorsed plans (25 October 2000) TP00/908 49-87 Turner St Development of the land for offices / warehouse / industry and associated car parking and reduction of the car parking requirement in accordance with the attached endorsed plans (29 March 2001). TP01/1394 109-129 Turner St & 748- Alterations to the warehouse and an open 766 Lorimer St lot car park at the rear of the site in accordance with the attached endorsed plans (20 March 2002) TP01/544 119 Turner St To extend the existing warehouse and mezzanine level, construct a new administration building and to waive the car parking requirements associated with

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Permit No Address Permit Description the increase in floor area in accordance with the attached endorsed plans (12 July 2001) TP01/1194 1 Westside Ave Use and development of five (5), two (2) storey warehouses and associated car parking in accordance with the attached endorses plans (24 January 2002) TP03/171 34-40 Wirraway Dv Construction of a part 1 storey, part 2 storey building and associated works (19 May 2003)

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11. DISCUSSION OF ISSUES

11.1 The Policy Role of the Area

The Policy role of the area is mainly determined by the:

State Planning policy Framework Local Planning Policy Framework Port Melbourne Structure Plan Melbourne 2030 Amendment C60 and City Plan 2010

The relevant sections of these reports have been discussed earlier in this report. In relation to the Fishermans Bend area, these policies:

The policy direction articulated in the various policies for Council raises two main questions for Council. Firstly, which of the existing zones is more appropriate to reflect the above policy position? Second, are any of the existing zones appropriate or is there a need to create a new zone or new definitions to more appropriately promote the above policy position?

11.2 Difference between the Industrial 1 Zone and the Business 3 Zone

The brief requires an examination of the existing mix of zonings and an assessment of the appropriateness of this mix. Generally speaking, the Industrial 1 Zone and the Business 3 Zone are the most appropriate zones from the existing suite of zones available in the Victorian Planning Provisions.

The characteristics of the Industrial 1 Zone and the Business 3 Zone were discussed earlier in this report. The different emphasis of the Industrial 1 Zone compared to the Business 3 Zone is critical to this study and the way in which the Fishermans Bend area might develop. Both zones permit a wide variety of uses. The Industrial 1 Zone prohibits accommodation (other than caretaker’s house), cinema based entertainment facility, hospital, intensive animal husbandry, shop (other than adult sex bookshop, convenience shop and restricted retail premises) plus Section 2 uses where the condition cannot be met. All other uses are either Section 1 or Section 2 uses, with the majority subject to some form of condition. The Industrial 1 Zone, therefore, is relatively flexible in the types of uses that are permissible either ‘as-of-right’ or ‘permit required’.

The Business 3 Zone, like the Industrial 1 Zone, only prohibits a limited number of uses including accommodation (other than caretaker’s house), extractive industry, hospital, intensive animal husbandry, major sports and recreation facility, motor racing track, shop (other than adult sex bookshop, convenience shop and restricted retail premises).

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Both zones classify ‘industry’ as a Section 1 use (ie no planning required provided certain buffer requirement are met). ‘Industry’ is defined as:

Land used for any of the following operations: a) any process of manufacture; b) dismantling or breaking up of any article; c) treating waste materials; d) winning clay, gravel, rock, sand, soil, stone, or other materials (other than Mineral, stone, or soil extraction); e) laundering, repairing, servicing or washing any article, machinery, or vehicle, other than on- site work on a building, works, or land; or f) any process of testing or analysis.

If on the same land as any of these operations, it also includes: a) storing goods used in the operation or resulting from it; b) providing amenities for people engaged in the operation; c) selling by wholesale, goods resulting from the operation; and d) accounting or administration in connection with the operation. If Materials recycling, goods resulting from the operation may be sold by retail.

The definition of industry therefore is broad and includes any process of testing or analysis and other uses associated with the industrial operation including accounting or administration in connection with the operation. The definition of industry also includes research and development centre, which is defined as:

Land used to develop electronic technology, biotechnology, or any other scientific discipline. It may include administration, promotion, conference, display, laboratory, assembly, and manufacturing areas.

Both zones include ‘warehouse’ (other than Mail centre and Shipping container storage) as a Section 1 use and both include a ‘research centre’ as a Section 2 use. A research centre is defined separately as ‘land used solely for scientific research.

The critical difference between the two zones relates to the use of office. Office is defined in the Melbourne Planning Scheme as:

Land used for administration, or clerical, technical, professional or other like business activity. No goods or materials intended for manufacture, sale, or hire may be stored on the land. Other than electoral office and medical centre, it does not include any other defined use.

In this regard the use of ‘office’ in the Industrial 1 Zone prohibits an office of more than 500 square metres. A ‘free-standing’ office use of more than 500 square metres is therefore prohibited. Potential exists however for greater amounts of office floor area provided it is in association with and ancillary to another permitted use.

The Business 3 Zone, however, actively encourages the co-location of industry and office. While the Business 3 Zone can place a limit on the amount of ‘as-of-right’ office, it cannot place a mandatory upper limit on the amount of office space applied for under a permit application.

This raises the question for the Study Area is whether office uses above 500 square metres should be:

prohibited; permitted without planning permit approval; or permitted subject to planning permit approval.

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This decision will largely depend on whether the introduction of offices of any type in the Study Area is considered appropriate and in turn will provide guidance on the appropriateness of the two zones.

The other question is whether there are synergy benefits of having the two zones located close to one another and the value of protecting these synergy benefits. In this regard, the existing MSS refers to the use of the Business 3 Zone along Lorimer Street as a means of providing the flexibility to provide services and offices to support the primary function of the area, that is, industry. If Industrial 1 Zone disappears from the Study Area, then, to a certain extent, so does the rational for the introduction of the Business 3 Zone.

11.3 Protection of the Port

Unlike many other uses or developments the Port is geographically fixed in one location. Its location is determined largely by the point at which water meets land and a historical decision to establish at this point. Removal or relocation of ports is costly and difficult and the choice of suitable alternative locations is severely limited.

It is fundamental therefore that land use planning protects ports and port related activities from inappropriate land uses and development in surrounding areas. The control of amenity conflict between the Port activities and surrounding activities is important for the continued smooth operation of the Port, particularly in relation to the ease of access into and out of the port area.

South Wharf is an integral part of the Port operations. The Melbourne Ports Corporation has expressed concern over the potential for new upgraded uses such as offices to inhibit the operation of the Port and curtail its development. This includes:

a perception that office is a higher order use than industrial and that future office tenants and their employees will seek to curtail port operations because of amenity impacts such as noise and visual amenity associated with the Port operations. a concern that car parking and traffic congestion associated with more intensive uses will make operation of the Port problematic and reduce the ability of the South Wharf to function adequately, thereby leading to its demise.

Protection of the Port area from incompatible land uses is a major initiative of Melbourne 2030. In this regard Initiative 4.3.2 is to:

Protect options for access to, and future development at, the ports of Melbourne, Geelong and Hastings, and ensure all port areas are protected by adequate buffer areas to prevent land-use conflicts at the perimeter.

It is also reflected in Melbourne City Council’s MSS in relation to Fishermans Bend under ‘Avoiding conflict with Port Operations’ where it states:

Development in Fishermans Bend must be designed in a manner that will not impede the efficient operation of the nearby Port of Melbourne.

Example of incompatible land uses are not specified. It is reasonable to assume, however, that compatible land uses include industrial, manufacturing and port related uses and that incompatible uses include residential uses and other sensitive uses hotels or primary and secondary schools.

The issue of the compatibility of office, however, is more difficult. Office lies somewhere between industrial and residential in terms of the amenity expectations of the users of the land. Office that is associated with a manufacturing or even advanced manufacturing use would be generally appropriate because the amenity expectations of the occupants are not likely to be as high as they are for a pure office use. The expectations of occupants of a pure office development are likely to be quite high, particularly if more office developments are allowed to establish in the

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immediate area. It would be reasonable to assume that this would increase pressure to on the Port to ‘tone down’ or reduce its operations at South Wharf.

The potential for traffic to impact on the Port operations is also a significant issue. Car traffic generated is likely to conflict with the ease of movement in and out of the Port. Existing vehicle access arrangement for large articulated vehicles is good because of the width of Lorimer Street and the relatively low existing traffic levels. While it is inevitable that there will be an increase in the amount of car traffic in the area, irrespective of future zonings, it is important to recognise the impact that intensive office development could have on the Port area in terms of traffic congestion and amenity expectations.

11.4 Impact on Existing Industrial Land Uses

As well as the protection of the Port, it is important to protect existing industry from the encroachment of inappropriate uses. Planning Policy strongly support the retention of industrial land for industrial use. The existing and proposed MSS both recognise the importance of major industry in the area including in particular the motor vehicle industry and the aeronautical industry. Major uses in the area include:

Holden Kraft Boeing Herald and weekly Times Boral Jacques

These industries are fundamental to the Victorian economy and they must be protected from the encroachment of inappropriate uses. Similar to the Port these uses often require access by large articulated vehicles to receive and distribute products to surrounding areas or to other ports. The introduction of more office floorspace in these areas will increase the amount of traffic in the area, particularly in the morning and evening peak periods. Potential exists to reduce the functioning of these larger industrial sites because of traffic congestion and access into and out of the area.

Amendment C049 finished exhibition on 14 April 2003. This amendment proposes the rezoning of land at 280 Lorimer Street from an Industrial 1 Zone to Business 3 Zone. The proposed amendment raises issues in relation to the rezoning of land to the Business 3 Zone and the uses that would be permitted under that zone. The land is located between some major land users in the area including Herald and Weekly Times, Boeing and South Wharf.

All three of these organisations have lodged submissions raising concerns about the proposed rezoning. Submissions were also received from the Department of Sustainability and Environment and Port Phillip City Council. Concerns raised include:

A belief that the amendment is premature and should not be considered until the findings of the Port Melbourne Land Use Study are finalised; the potential development of a ‘de-facto’ office precinct with no relationship with industrial or high-tech manufacturing uses; a lack of strategic justification for the rezoning; the lack of detail about the future development intentions for the site; and the potential for future office development will prejudice the future expansion nearby industrial uses.

These responses confirm that industry is in the area is concerned about the encroachment of higher order uses, such as offices, on existing industrial uses. The concern about the proliferation of offices is a reasonable one, particularly given the acknowledged infrastructural inadequacies of the area in terms of roads, public transport and pedestrian links.

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11.5 Timing Considerations

A considerable amount of land in the Study Area has already been rezoned. Most of this occurred at the time of the introduction of the City of Melbourne’s new format planning scheme. A further parcel of land at 194-222 Lorimer Street, Port Melbourne was rezoned in July 2000.

The Study Area currently supports approximately: 70 hectares of Business 3 Zoned land; and 103 hectares of Industrial 1 Zoned land.

In addition there is currently a rezoning request to rezone land at 280 Lorimer Street to Business 3 and Council is aware of verbal indications that owners of 90 Turner Street, 2 Douglas Street and 344 Lorimer Street intend to request a rezoning to Business 3 Zone in the near future.

The demand to rezone land is likely to continue given the precedent that has been set already and the vision for the area to be upgraded into an advanced manufacturing area and associated business services. The consideration of the future of the area and of individual rezoning requests need to be considered on their merit and need to take into account the existing zoning pattern and the potential impacts on surrounding land uses. The fact that previous rezoning request have been supported because this was deemed to be consistent with a ‘regeneration’ of the area is also a relevant consideration.

Notwithstanding this, the onus should be on the proponent to show that a rezoning is strategically justified, rather than Council having to strategically justify the existing zone. The protection of existing industry and in particular industries that are fundamental to the area’s economic prosperity is a valid reason for refusing to rezone land from the existing Industrial 1 Zone.

11.6 Office Uses and Zoning

Rezoning to a Business 3 Zone will inevitably result in increased pressure for a wide range of office uses. Council’s vision for the area encourages the establishment of Corporate headquarters in the area. Melbourne 2030 also recognises that the employment in Fishermans Bend could treble by 2020. The appropriateness of the area for traditional forms of intense office development needs to be assessed.

Inspections of the Study Area indicate that despite its proximity to the City the area is not easily accessible. The area lacks permeability in terms of road access and public transport is limited to bus services operating along Lorimer Street, Todd Road and Salmon Street.

The unfettered development of offices would, at this stage at least, be inappropriate because of:

the lack of available public transport in the area; the lack of good pedestrian links and bicycle paths; the limitations of the existing road network; the effect of additional traffic on the operations of existing industry and the Port; and the desire for Melbourne City Council to retain the area for advance manufacturing uses.

Further the State Planning Policy Framework emphasises that commercial development should be concentrated in Activity Centres that are highly accessible to the community. The MSS also emphasises that the CBD be the primary place for high-order business activities in Victoria including a broad range of financial, legal, administrative, recreational, tourist and entertainment uses.

Fishermans Bend is not an Activity Centre and planning should seek to regulate the amount of office space that is established in the area in accordance with the provision of new road and pedestrian infrastructure and public transport and balance this with the protection of existing industry and the Port.

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11.7 Appropriate Zones

Guidance on the selection of appropriate zones for industrial areas is given in the Department of Planning and Development’s New Zones for Planning Schemes in Victoria (February 1996). In relation to the Business 3 Zone this document states:

This special zone enables the integrated development of offices and manufacturing industries and associated commercial and industrial uses.

A number of highly accessible or visible locations, often previously zoned for industry, have the potential to develop more intensively if this is zone applied.

The zone would be applied to mixed-use industrial-office parks, and some inner suburban industrial areas which are evolving towards commercial and office uses. ‘New wave’, advanced technology industries and research establishments, will also seek these locations for their high amenity and good address. Some zones of this nature already exist, but the likelihood is that sections of existing industrial zones should be converted to the new zone. Unless the existing land use reflects the purpose of the zone, then the council will need to demonstrate through its strategic planning studies that a change to the new zone should occur. Otherwise, the flexible Industrial 1 Zone should be used, which allows a limited mix of industries with offices.

The Business 3 Zone should therefore be used in industrial areas which are evolving towards commercial and office uses. While the Council and the State Government is supporting an evolution of the area to cleaner production, advanced manufacturing and major industrial headquarters, they are not encouraging the transformation of the area as a new commercial district or activity centre which supports more intensive professional services such as accountants, architects, lawyers.

The above statement also indicates that unless the existing land use reflects the purpose of the zone, then Council will need to demonstrate through its strategic planning studies that a change to the new zone should occur. Given that the Business 3 Zone in the Melbourne Planning Scheme currently lists office as an ‘as of right’ use with no limit placed on the floor limit, the rezoning of remaining industrial land to a Business 3 zone is questioned. Options include either:

Refusing future rezoning requests and keeping land in the Industrial 1 Zone. This could be justified on the grounds that the area is primarily an industrial area and further intrusions into the area will not be permitted Allowing a rezoning to Business 3 Zone with a limit on the ‘as of right’ office floorspace, so that Council has some control of the intensity of the office use proposed.

11.8 Lot Sizes

Council is concerned about the number of subdivision applications it has received and the resultant size of the allotments. Examples of small lot subdivision include the Portside Business Park where there are lots as small as 1200 square metres. Fragmentation of Industrial land into small lots decreases the flexibility of land to accommodate a range of appropriate land uses.

Subdivision requires planning permit approval in both the Business 3 Zone and the Industrial 1 Zone. Before deciding on an application for subdivision the Responsible Authority must consider:

The State Planning Policy Framework and the Local Planning Policy Framework, including the Municipal Strategic Statement and local planning policies. The effect the subdivision will have on the potential of the area to accommodate the uses which will maintain or enhance its competitive strengths. Any natural or cultural values on or near the land. Streetscape character. Landscape treatment. The interface with adjoining zones, especially the relationship with residential areas.

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Council therefore has the discretion to assess the appropriateness of the subdivision in relation to its local policies and ‘on the potential of the area to accommodate the uses which will maintain or enhance its competitive strengths’. This suggests a need for a policy on subdivision in industrial areas which encourages the provision of a variety of lot sizes each with appropriate frontage to main roads and enough space to provide for landscaping, car parking and manufacturing / office or warehouse uses.

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12. PLANNING CONCLUSIONS

12.1 Options A number of options are discussed below in relation to the future of the area.

12.1.1 Option A: Retain Remaining Land in the Industrial 1 Zone

This option represents the option of least change. From a control perspective the Industrial 1 Zone is flexible and allows a wide variety of uses (including offices up to 500 square metres) that are consistent with the vision of advanced manufacturing production components. The zone only prohibits a limited number of uses and allows, amongst other things, the establishment of a research and development centre.

The zone primarily encourages manufacturing uses consistent with the types of uses already found in the western portion of the Study Area. It also allows more than 500 square metres of office where that office is ancillary to the main permitted use of the site. For example, a manufacturing or warehouse use could have more than 500 square metres of office provided it is ancillary to the manufacturing or warehouse use.

Council could adopt a position that further rezonings in the Fishermans Bend Area from the Industrial 1 Zone will not considered. This position could be supported on the basis that there is already enough land in the Business 3 Zone to cater for the short to medium term demand for office based uses and that the existing ratio of Business 3 Zoned land and Industrial 1 Zone has synergy benefits that should be protected. In this regard, the existence of both zones allows business services and offices to establish in close proximity to the major industrial users in the Study Area.

The preservation of the Industrial 1 Zone will also ensure the protection of existing industry for as long as it remains in the Study Area and would assist in limiting the amount of new office floorspace to 500 square metres per site (or to the level which is still considered to be ancillary to an industrial use). The zone would prohibit intensive freestanding office developments from intruding into the area and from consuming industrial land, that might otherwise be used for advanced manufacturing or research and development centres.

The disadvantage of this approach is that the maintenance of the Industrial 1 Zone may inhibit the upgrade of the area and the introduction of new uses. In particular, the Industrial 1 Zone would limit the potential for major industry headquarters to establish in the portion of Fishermans Bend area if the headquarters is not deemed to be ancillary to existing or proposed industry. This maintenance of the Industrial 1 Zone is likely to inhibit the policy desire for the establishment of new industrial.

12.1.2 Option B: Allow Rezoning of Remaining Land to Business 3 With No Office Limit

This option would continue the recent trend to rezone land from the Industrial 1 Zone to the Business 3 Zone in an attempt to promote the regeneration of the area and the co-location of office and industrial activities. This is articulated in the Port Melbourne Structure Plan where it states that the Business 3 Zone ‘is designed to accommodate new industrial forms that integrate office and manufacturing on the one site’ (page 22).

While it is true that the zone does provide the flexibility to establish both office and industrial uses on the one site, it also establishes the flexibility to establish office and industrial uses independently of one another on separate sites. In this regard, in the Business 3 Zone, office, industry and warehouse are all Section 1 uses that do not require planning permit approval.

Council would have very little control over the intensity of an office use given that office is an ‘as- of-right’ use, which would therefore be deemed to be consistent with the zone. The opportunity

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for advanced manufacturing uses to establish in the Study Area could be severely compromised if Business 3 Zone is adopted with no limit on the office floor area. Intensive office developments would be able to establish and potentially displace existing and future industry, creating instead a second grade office precinct. Given the current infrastructural constraints and the concerns expressed by existing industry and the Port Corporation about intensive office development proposals, a rezoning to the Business 3 Zone (with no limitation on the as-of-right office component) is not considered appropriate.

12.1.3 Option C: Allow Rezoning to Business 3 Zone with A 500 Square Metre Limit Included in The Schedule.

This option would involve the incremental rezoning of land on a site by site basis to a Business 3 Zone with a 500 square metre limit on the ‘as-of-right’ office use. The Council would not initiate such rezonings, but would consider its options in relation to each site and the various statutory tools that could be used to encourage appropriate development; or at the very least, discourage inappropriate development.

The ability of Council to control particular uses is largely dependent upon a particular use falling into Section 2 of the use table to the zone. In this regard, Clause 31.01-2 of the Melbourne Planning Scheme states:

Because a use is in Section 2 does not imply that a permit should or will be granted. The responsible authority must decide whether the proposal will produce acceptable outcomes in terms of the State Planning Policy Framework, the Local Planning Policy Framework, the purpose and decision guidelines of the zone and any of the other decision guidelines in Clause 65.

By placing a limit on the office floor area for as of right office uses and by requiring planning permit approval for offices above 500 square metres, Council can exercise discretion over the intensity of office development that can establish in the area. This will allow a more controlled transition of the area from a traditional manufacturing precinct to a more intense advanced manufacturing area with an increased office component. It will also allow this transition to respond more appropriately in a timing sense to progressive improvements in pedestrian links, bicycle paths, public transport and potential new road networks.

The discretion exercised over office developments can be informed by planning policy including the Local Planning Policy Framework. Melbourne City Council already has an established Local Planning Policy Framework that influences various types of land use and activity. A good example is Clause 22.13 Land use and Activities in the Mixed Use Zone. This policy seeks to influence the land use and activity the City’s Mixed Use Zone areas and provides the policy guidance that places different degrees of emphasis on different types of uses depending on the particular location. The policy encourages a genuine mix of activities and encourages a balance between residential and non-residential uses.

The same approach can be taken in planning policy related to the Fishermans Bend area. The opportunity to influence the types of activities in Fishermans Bend should not rely solely on the zoning, given the vision that Council has for the area, but should rely on strong strategic planning and policy making that can influence the type and intensity of use that is regarded as appropriate. This policy should apply to both the Business 3 Zone and the Industrial 1 Zone.

12.1.4 Option D: The Development of a Local Policy for Fisherman’s Bend Industrial Area

Existing strategies of Council and the State Government provide good guidance on the desired future for the Fishermans Bend area. This should be supported and reiterated through a local policy. The policy should apply to all land in the Business 3 Zone and Industrial 1 Zone in the Fishermans Bend Area. The policy should build upon the vision for the area in the MSS and City

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Plan 1999, and the new policies proposed in Amendment C60 and City Plan 2010. The policy should establish a vision for the area consistent with the Port Melbourne Structure Plan, that is:

Port Melbourne will be the preferred location for clean, high profile, value added manufacturing, research and development and associated services that will benefit from its proximity to the Central Business District

As a minimum the policy should address:

The precise wording of the Policy will need to be determined through future work, but as a starting point a Policy for the Fishermans Bend Area should:

encourage high profile, value added manufacturing and development and associated business services; discourage the use of industrial land in the area for higher order commercial uses especially stand alone office developments; support the transition of the area from a traditional manufacturing area to an area for advanced manufacturing and associated commercial services encourage a variety of subdivision layouts and lot sizes to accommodate a range of industrial and commercial uses; encourage lots sizes to be sufficient in size to accommodate all likely needs, including loading bays, storage areas, staff and visitor car parking areas and landscaping; encourage high quality new industrial developments which have an efficient and functional layout; encourage improvement of the visual character of the area; encourage protection of the South Wharf Port area from inappropriate development; encourage protection of existing industry and industrial zones from the encroachment of incompatible uses including intensive office development; encourage the integration of office and industrial uses on one site; encourage the establishment of industrial ‘headquarters’ and small scale offices that that have an association with other industrial uses in the immediate area; and encourage, low scale development of 2 or 3 storeys consistent with the existing industrial and business park character of the area.

The policy should discourage the establishment of freestanding intensive office development. These types of offices have no relationship to industrial uses and that would be better located in the CBD, St.Kilda Road or another area with a major commercial focus.

The policy could stipulate that offices will only be permitted in association with an industrial, educational or research and development use or any other use that is consistent with the zoning of the area. The policy could encourage the provision of office floor area to non-office floor area at ratio of 2 to 1. This would allow for example a 1000 metre warehouse at ground level to establish in conjunction with 2000 square metres of office beside it or above it.

The policy should discourage the rezoning of the remaining Industrial 1 Zone land, unless there are strong strategic reasons to do so and unless Council is satisfied that the proposed development of the site will be consistent with the overall vision for the area. In this regard Council could require the use of the Development Plan Overlay or the Incorporated Plan Overlay to ensure that the future development of the Business 3 Zoned land is consistent with that vision.

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In relation to subdivision size the Policy could be prescriptive or performance-based or a combination of both. At the very least the policy should require the submission of a concept plan prior to the consideration of any subdivision application. Alternatively, a more prescriptive approach could be adopted with a minimum subdivision size of say 2000 sq.m. with an average of not less than say 5000 sq.m. This would balance the legitimate desire for landowners to subdivide land to cater for emerging industry land requirements with the desire to provide a variety of lot sizes to encourage diversity in the types of uses that establish.

12.1.5 Option E: Investigation of New Definition or New Zone

One of the questions posed in the brief is whether the existing suite of zonings is appropriate or should new types of zonings be considered. Generally speaking the existing suite of zones seems to be reasonably appropriate for the area, but they need to be supported with a local policy that supports the MSS and the Port Melbourne Structure Plan.

The Department of Infrastructure (the predecessor to the Department of Sustainability and Environment) worked to substantially reduce the number of zones across the Victorian Planning System. It was this review that resulted in a decreased number of zones with an increased emphasis on strategic planning, particularly through the Local Planning Policy Framework to influence planning outcomes. It is difficult to foresee that the DSE would necessarily entertain a new zone for the Port Melbourne area or a new definition introduced into the VPPs to allow improved flexibility for ‘advanced manufacturing’ or high technology uses.

Interestingly the Melbourne Planning Scheme used to incorporate the South Port High Technology Zone. Essentially this was a High Technology Zone or an Advanced Manufacturing Zone that promoted the precinct as primary focus for

a) The development of a range or enterprises with an industrial and trading focus on new electronic, computer and telecommunications technologies and enterprises in media communications, graphics, design and related business services groups, aerospace technologies; b) The establishment of appropriate facilities and services which support technology and research and development enterprises; and the specified core technology groups; c) Technology and research enterprises which can extend and reinforce the linkages between the precinct and educational, educational / research establishments and between the precinct and the CBD

The zone then specified a number of ‘as-of-right’ uses including high technology industry, which was defined in the South Port Technology Precinct Guidelines for Use and Development, November, 1991. Light industry and office (with a mandatory maximum of 500 square metres) were permit required uses. Offensive Industry was prohibited.

A similar opportunity could present itself if pursued for the Fishermans Bend Area. A new ‘advanced manufacturing’ zone that encourages certain types of uses that are deemed to fall within the realm of advanced manufacturing could be introduced which allows those uses as of right and subjects to planning permit other uses such as traditional industry, warehousing and office. This way, Council could more aggressively protect the land for genuine advance manufacturing uses.

It is interesting that this zone also incorporated height controls, setback controls and plot ratio controls, something which is notably absent form existing controls affecting the area and which could be incorporated under a Design and Development Overlay.

Alternatively a new definition could be introduced into the VPPs which allow the distinction of advanced manufacturing uses from more traditional manufacturing. The former metropolitan planning schemes once included a reference to high technology precincts. It stated that

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Technology precincts are to be developed and occupied by high technology industries which, among others, may include industries producing goods and services in the fields of biotechnology, genetics, material sciences, fibre optics, geomechanics, geophysics, computer science, telecommunications, electronics, pharmaceuticals, ceramics, veterinary science and research and development support. Ancillary uses such as conference, social and entertainment facilities should be provided in and around high technology precincts.

Potential exists to utilise the above description for a definition of advanced manufacturing or high technology uses that could then be either Section 1 or 2 uses. Reference to services including the design or engineering of goods in relation to these industries could also be added to allow the legitimisation of an office component that is genuinely related to advanced manufacturing.

12.2 Recommendations

1. Council prepare a local policy for the Fishermans Bend area that addresses: Vision Objectives Preferred activities and uses Preferred subdivision patterns and sizes Preferred urban design outcomes.

2. Council refuse to support any rezoning to Business 3 Zone which places no limit on the ‘as- of-right’ office.

3. Council retain the Industrial 1 Zone for existing industries.

5. Council require permit applicant’s for office development to submit detailed traffic and parking impact statements.

6. Council require the provision of concept plans with subdivision applications which show a variety of lots sizes with a minimum area of 2000 sqm and an average of 5000 sqm.

8. Council to consider the introduction of a Development Contribution overlay to assist with the funding of new roads, pedestrian links, bicycle paths and public works improvements.

9. Council to consider the introduction of a Design and Development Overlay to influence the height, setback, subdivision and appearance of the Fishermans Bend area.

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Appendices

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13. APPENDIX 1A: STUDY AREA: DIRECTORY OF BUSINESSES

Industry Category Organisation Address Website 1999 Address (relocating firms only) A V Engineering 194 Lorimer Street Collins Melbourne Advanced Manufacturing Aerostaff Australia P/L 32 Network Drive www.aerostaff.com.au King Airport West (aerospace)) Agserv P/L 247 Ingles Street (Unit 2) Howard North Melbourne Transport & Storage Allift Transport 225 Boundary St Lipton Thomastown Basic Manufacturing / Bellingham Marine Australia 263-329 Lorimer Street (Suite 11a www.bellingham-marine.com Lorimer Port Melbourne Engineering Level 1 Pier 35 Complex) Business Services Bove & Associates Grnd Flr Suite A1/ 63 -85 Turner 556 Plenty Road Preston East St Property Services Buxton Constructions P/L 16 Salmon Street (Suite 3) Union St Windsor Food Manufacturing Calendar Cheese Co P/L 216 Lorimer Street 157 Salmon St Port Melbourne Business Services Car Search Brokers Australia P/L 323 Ingles Street www.carsearchbrokers.com.au Transport & Storage Chris's Coaches P/L 90 Turner Street Hume Cambellfield Wholesaling Computer-Easy Australia 247 Ingles Street (Unit 3) 119 Market Street South Melbourne Clothing Concept Sports International P/L U11/ 331 Ingles St www.conceptsports.com.au 273 Williamstown Road Port Melbourne Clothing Dimension Clothing 2/ 216 Turner St www.dimensionclothing.com.au 17 Rupert Street Collingwood Business Services Diverse Information Technology P/L 290 Salmon Street www.diverseit.com.au 200 Turner street Port Melbourne Business Services Doculink Australia 4 Westside Avenue (Portside www.doculink.com.au Johnson Street abbortsford Business Park) Business Services Dpa Document Printing Australia P/L 332 Lorimer Street http://www.dpa.aust.com/dpa.htm Latrobe Street Melbourne Media Encore Productions P/L 18 Salmon St 137 Gladstone St South Melbourne Engineering services Esco 323 Ingles Street (Unit 4) 672 Queensberry St North Melbourne Retail First Auto Wholesalers 203 Ingles Street 10 Cecil South Melbourne Shipping Gearbulk (Australasia) P/L 263-329 Lorimer Street www.gearbulk.com 40 Beach Rd Port Melbourne Basic Manufacturing / General Foods P/L 187 Todd Rd 850 Lorimer St Port Melbourne Engineering

::ODMA\PCDOCS\COM_SERVICE_PROD\1166018\1 PORT MELBOURNE LAND USE AND ACTIVITY STUDY 76 Industry Category Organisation Address Website 1999 Address (relocating firms only) Wholesaling Gillies J.M. Agencies Pty. Ltd Unit4/ 202 Lorimer St 2 Eastern Road South Melbourne Property Services Golden Hand Cleaning Australia 323 Ingles Street (Fact 7) Charnwood Cres St. Kilda Property Services Graphos Architects P/L 228 Turner Street (Unit 5) 91 Elgin st Carlton Business Services Innovative Recruitment P/L 63 -85 Turner St 306 Bay Street Port Melbourne Property Services Mab Industrial Projects Suite 8A/ 263 -329 Lorimer St www.mabbusinessparks.com.au 190 Graham St Port Melbourne Transport & Storage Maynelogistics-Armaguard 100 Turner Street Wool Board Rd Port Melbourne Media Labs 274 Salmon Street Reynolds St North Melbourne Education Mercuri International (Australia) P/L 16 Salmon Street (Suite 1) 150 Albert Rd South Melbourne Wholesaling Minolta Business Equipment 202 Turner Street www.minolta.com.au 87 Bay St Port Melbourne Natural Flair P/L 216 Turner St 30 Rupert St Collingwood Wholesaling O P C Orthotic & Prosthetic Centre 151 Turner Street www.opcpl.com.au 239 Bouverie Carlton Property Services O'Donnell Griffin 235 Ingles Street www.odg.com.au 50 Nott Port Melbourne Wholesaling Oxley Brothers P/L 20 Network Drive 23 Beaconsfield Parade Port Melbourne Communications Pacific Communications (Head Office) Unit 10/ 331 Ingles St www.pacom.com.au 196 Turner St Port Melbourne Shipping Portside Painting Co P/L 323 Ingles Street 326 Bay St Port Melbourne Scientific Quantum Scientific P/L 200 Turner Street (Unit 8) http://www.quantum-scientific.com.au/ Media Silver Spoon Productions 2 Westside Avenue 119 Well St Southbank Shipping Skilled Maritime Services Shed 30 South Wharf 625 Lorimer Piggott West melbourne St Communications Sky Channel P/L 225 Ingles Street (Unit 2) www.skychannel.com.au Wholesaling Spandex Australia 204 Turner Street www.spandex.com.au 24 Eskay Rd South Oakleigh Media Stage One Promotions 11A Salmon Street www.stage1.com.au 571 Plummer St Port Melbourne Clothing Subway Shoe Diffusion P/L 7 Central Boulevarde 80 Down St Collingwood Basic Manufacturing / Terex Cranes P/L 90 Turner Street Engineering Wholesaling The Grid Corporation 14 Salmon Street (Level 1) 58 Clarke St Southbank Business Services The Private Hospitals Association Of 14 Salmon Street (Ste 1) www.phav.com.au 424 St. Kilda Road Melbourne Victoria Transport & Storage Transfleet P/L Pier 31 Lorimer St 11 McKenzie Rd Footscray Wholesaling Trivalve Controls P/L 284 Ingles Street www.trivalve.com.au 60 Rouse Port Melbourne Scientific Watters Electrical Melbourne 24 Network Drive 65 Moray South Melbourne Basic Manufacturing / Winfield Automotive Services P/L 276 Ingles Street 93 Kavanagh South Melbourne

::ODMA\PCDOCS\COM_SERVICE_PROD\1166018\1 PORT MELBOURNE LAND USE AND ACTIVITY STUDY 77 Industry Category Organisation Address Website 1999 Address (relocating firms only) Engineering Shipping Adsteam Harbour Melbourne 30 Sth Wharf) 629 Lorimer St www.adsteam.com.au Transport & Storage Alif Communications 830 Lorimer Street Wholesaling Ameda 345 Ingles Street (Unit 6) http://www.ameda.com.au/ Scientific Anacon Laboratory Services / Pronto 2 Hall Street Concete Wholesaling Andronicus 650 Lorimer Street Wholesaling Astrazeneca P/L 331 Ingles Street (Unit 8) www.astrazeneca.com.au/ Communications Audio Lounge 2 Westside Avenue (Boardside Business Park) Transport & Storage Austpac Transportation Services P/L 481a Plummer St Basic Manufacturing / Ave Building Services 16 Network Drive Engineering Shipping Bartley Marine Services Lorimer Street (Pier 35) Shipping Bass Strait Transport P/L 194 Lorimer Street Business Services Blueprint Instant Printing P/L 225 Ingles Street www.blueprintcom.com.au Basic Manufacturing / BMW Bodyshop 770 Lorimer Street Engineering Media Broadcast Engineering News 18 Salmon St Wholesaling C Rudduck P/L 247 Ingles Street (Unit 2) www.rudduck.com.au/ Business Services Complete Print Solutions P/L 69 Salmon Street Property Services Dexion Citiport 1/290 Salmon Street Edwards Australia P/L 198 Turner Street Epic Australia P/L 196 Turner Street www.epicworld.com.au Epic Australia P/L 331- 349 Ingles St www.epicworld.com.au Business Services Finsbury Printing 46 Wirraway Drv Media Foster Terry & Associates 247-251 Ingles Street Wholesaling Fujitsu Australia Ltd 290 Salmon St Communications Getronics (Australia) P/L 664 Lorimer Street (Unit 3) www.getronics.com.au Clothing Gilmore J C P/L 206-208 Lorimer Street www.gilmores.com.au Advanced Manufacturing GKN Engage P/L Lvl 1 850 Lorimer St www.aerospace.gknplc.com (aerospace)) Clothing Globe International 300 Lorimer St www.globeinternationalltd.com Wholesaling Hills Industries Ltd-Security Systems- 4/225 Ingles Street

::ODMA\PCDOCS\COM_SERVICE_PROD\1166018\1 PORT MELBOURNE LAND USE AND ACTIVITY STUDY 78 Industry Category Organisation Address Website 1999 Address (relocating firms only) Pacific Communications Clothing Hi-Tech Markers 216 Turner Street (Unit 2) Education Infratrain 204A Turner Street www.infratrain.com.au Business Services Interact Dm 239 Ingles Street www.targetbase.com.au Media JC Decaux Australia P/L 331 Ingles Street (Unit 12) www.jcdecaux.com.au Transport & Storage Jeffrey Barnes Removals 6/323 Ingles Street Media John Brown Photography 14 Network Drive http://www.jbrown.com.au/ Communications K D R Creative Software P/L Suite 15/ 85 Turner St L I F A Enterprises P/L 31 Lorimer Street (South Wharf) Business Services Law Doc Pty Solicitors 263 Lorimer Street (Ste 11 Pier 35) Wholesaling Liquor Marketing Group Ltd Lvl1/ 241 Ingles St Port Melbourne 3207 Business Services Logical Staff Solutions Lvl 1/ 206 Lorimer St Recreation Melbourne Marine Club Incorporated 263 Lorimer Street (Pierre 35) Business Services Melbourne Motor Traders 215 Ingles Street Shipping Melbourne Reefer Services 802 Lorimer Street Shipping Nms (Noraus Maritime Services) P/L 263-329 Lorimer Street Media Omnigraphics 13 Central Blv www.omnigraphics.com.au Wholesaling Onesteel Fire Systems Hall Street (Gate 4) www.onesteel.com Wholesaling Optima Computer Technology 297 Ingles Street (Unit 2) www.optima.com.au Basic Manufacturing / Oz Spar P/L 619A Lorimer Street www.ozspar.com.au Engineering Communications P&R Datacom 225 Ingles Street (Unit 3) Business Services Pacific Trade Network P/L 263 Lorimer Street (Pier 35 Suite 9) Basic Manufacturing / Passive Fire Doors 323 Ingles Street (Factory 5) Engineering Business Services QM Technologies Unit 4/ 224 Turner St Clothing Radioactive Clothing P/L 249-251 Ingles Street Advanced Manufacturing Raytheon Australia 9 Central Boulevarde www.raytheon.com.au (aerospace)) Robert J Guy & Associates P/L 263 Lorimer St Business Services Samuel Davis P/L 263 Lorimer Street (Suite 11 Pier 35)

::ODMA\PCDOCS\COM_SERVICE_PROD\1166018\1 PORT MELBOURNE LAND USE AND ACTIVITY STUDY 79 Industry Category Organisation Address Website 1999 Address (relocating firms only) Clothing Scandinavian Baby P/L 200 Turner St Transport & Storage Securaway 2 Salmon Street www.securaway.com.au Recreation Suntracker Boat Rentals 263-329 Lorimer Street (Pier 35 Marina) Business Services Superco Group 1 Central Blv Property Services Techcor Developments P/L 323 Ingles St Media Terry Foster & Assoc P/L 4/247-251 Ingles Street 42 Glenbarry Rd Cambellfield Business Services Tmp Digital Printing Services P/L 4 Westside Avenue Transport & Storage Westgate Logistics P/L 650 Lorimer Street (Level 4) Advanced Manufacturing Abb Engineering Construction P/L 90 Turner Street (electronics)) Advanced Manufacturing Aeronautical & Maritime Research 506 Lorimer Street (aerospace)) Laboratory Advanced Manufacturing Air International Group Ltd (Hose & 80 Turner Street (automotive)) Pipe Division) Allied Express 668 Lorimer Street (Unit 2) Shipping Allpoints Customs Services 27 Lorimer Street (South Wharf) Wholesaling Applied Micro Systems (Australia) P/L 297 Ingles Street (Unit 6) www.ams.aag.com.au Media Argyle Studios 19 Salmon Street Wholesaling Aristocrat Technologies Australia P/L 672 Lorimer Street Basic Manufacturing / Aspex Paper Australia P/L 344 Lorimer Street www.aspex.com.au Engineering Advanced Manufacturing Asta Components 226 Lorimer Street (automotive)) Recreation Auscarts Racing 50 Salmon Street Wholesaling Auspine Limited 93 Lorimer St South Melbourne 3205 Wholesaling Bay Seafoods 157 Salmon Street Retailing Beaurepaires 56 Boundary Street Scientific Betzdearborn 2 Central Boulevarde Basic Manufacturing / Boral Masonry Turner Street Engineering Basic Manufacturing / Boral Plasterboard 676 Lorimer Street Engineering Wholesaling Broadcast Engineering 214 Lorimer Street

::ODMA\PCDOCS\COM_SERVICE_PROD\1166018\1 PORT MELBOURNE LAND USE AND ACTIVITY STUDY 80 Industry Category Organisation Address Website 1999 Address (relocating firms only) Basic Manufacturing / Building Products Supplies P/L 750 Lorimer Street www.bpsaust.com Engineering Basic Manufacturing / Cambar Precast 270 Salmon Street Engineering Wholesaling Canohm TV Bracket & Hi Fi Speaker 3/200 Turner Street Wholesalers media Captain Video Services P/L 214 Lorimer Street Retailing Cine Australasia P/L 297 Ingles Street (Unit 3) www.cine.com.au Property Services Citiport 650 Lorimer Street Basic Manufacturing / Clamp Electrical Industries P/L 68 Ingles Street Engineering Shipping Continental Freight Services (Aust) 27 Lorimer Street (South Wharf) www.continentalfreight.com.au P/L Business Services Corporate Express Australia Ltd 111 Turner Street www.ce.com.au (Head Office) Property Services Crema Camillo Builders 262 Salmon Street Wholesaling Danka Australia P/L 660 Lorimer Street Advanced Manufacturing Defence Science & Technology 506 Lorimer Street (automotive)) Organization Communications Digistor 214 Lorimer St Transport & Storage Dyson W H & Son P/L 153 Boundary Street Wholesaling Electrotech Australia P/L 5 Central Boulevarde Scientific Envirohealth P/L 241 Salmon Street Fusion Electrics 191 Salmon Street Basic Manufacturing / Gaf Control (Sales) P/L 191 Salmon Street Engineering Gearhouse Melbourne 290 Salmon Street (Unit 2) Wholesaling Gunn's Timber 1 Rogers Street Advanced Manufacturing Hawker De Havilland (Asta 226 Lorimer Street (aerospace)) Components) Property Services Higgins Coatings P/L 297 Ingles Street Wholesaling Hills Industries Ltd-Security Systems- 196 Turner Street Pacific Communications Shipping Himex Import Export Management 27 Lorimer Street (South Wharf) Advanced Manufacturing Holden Engine Operations 600 Lorimer Street (automotive))

::ODMA\PCDOCS\COM_SERVICE_PROD\1166018\1 PORT MELBOURNE LAND USE AND ACTIVITY STUDY 81 Industry Category Organisation Address Website 1999 Address (relocating firms only) Advanced Manufacturing HOLDEN LTD 241 Salmon St (automotive)) Basic Manufacturing / Independent Cement & Lime P/L 750 Lorimer Street www.independentcement.com.au Engineering Shipping Intertek Testing Services (Aust) P/L 218 Lorimer Street Advanced Manufacturing Isuzu-General Motors Australia Ltd- 858 Lorimer Street (automotive)) Customer Assistance Wholesaling J A Davey Holdings P/L 626 Lorimer St http://www.jadavey.com.au/jadco.phtml Transport & Storage Jasdan P/L 27 South Wharf Lorimer St Basic Manufacturing / Kraft Foods Ltd 162 Salmon Street Engineering Basic Manufacturing / Kraft Foods Ltd 850 Lorimer Street Engineering Basic Manufacturing / La Mer Poles P/L South Wharf 30 Lorimer St Port Engineering Melbourne Wholesaling Lanier 854 Lorimer Street www.lanier.com.au Basic Manufacturing / Luv-A-Duck P/L 151 Boundary Street www.luvaduck.com Engineering Retailing Mag Auto Spares 25 Salmon Street Basic Manufacturing / Melbourne Door Services 4/200 Turner Street Engineering Recreation Melbourne International Shooting 120 Todd Road Club Retailing Melbourne-City Land Rover P/L 351 Ingles Street (Cnr Lorimer St) Wholesaling Mitsubishi Pencil (Australia) P/L 624 Lorimer Street Basic Manufacturing / Nestle Australia Ltd 650 Lorimer Street Engineering Scientific Painting Contractor Certification 177 Salmon Street Program Wholesaling Pasific National Imports P/L 4 Central Boulevarde Basic Manufacturing / Piave Concrete 262 Salmon Street Engineering Recreation Pier 35 263-329 Lorimer Street Retailing Pier 35 Boat Sales 263-329 Lorimer Street www.pier35boatsales.com.au Recreation Pier 35 Restaurant Reservations 263 Lorimer Street Wholesaling Port Melbourne Clutch & Brake 5 Boundary Street Service P/L

::ODMA\PCDOCS\COM_SERVICE_PROD\1166018\1 PORT MELBOURNE LAND USE AND ACTIVITY STUDY 82 Industry Category Organisation Address Website 1999 Address (relocating firms only) Wholesaling Port Melbourne Metals 139 Ingles Street Retailing Portside Deli 3 Central Boulevarde (Portside Business Park) Shipping Powerhouse International (Vic) Pty 27 South Wharf Terml Lorimer St Limited Basic Manufacturing / Pozzolanic Enterprises 465 Lorimer Street Engineering Basic Manufacturing / Promat Fyreguard P/L 2/202 Lorimer Street www.promat.com.au Engineering Rack & File (Industrial) P/L 1/290 Salmon Street Clothing Republic Clothing Imports P/L 4 Central Boulevarde Restaurants Rivers Restaurant & Bar At Pier 35 263-329 Lorimer Street (Pier 35 Marina) Education Rmit University-Department Of 226 Lorimer Street (Sir Lawrence Aerospace Engineering Wackett Aerospace Design Technology C Business Services Robe John & Associates P/L 15 Central Boulevarde Clothing RS Components 294 Salmon Street www.rswww.com.au Wholesaling S C C S Rentals P/L 200 Lorimer Street Property Services Salta Constructions P/L 650 Lorimer Street Recreation Sandridge Life Saving Club Todd Road (Cnr The Boulevard) Scientific Scientific Services Laboratory-Ssl 177 Salmon Street Retailing Shell Australia Ltd-Service Station Lorimer Street (Cnr Ingles St) Basic Manufacturing / Smorgon Steel Group Ltd-Corporate 650 Lorimer Street Engineering Office Wholesaling Southern Cross Computer Rentals 200 Lorimer Street www.southerncross.com.au Retailing Southport Tyre & Battery Service 81 Lorimer St South Melbourne Shipping Steel Cement P/L 750 Lorimer St Property Services Stork Electrical P/L 650 Lorimer Street www.stork.com.au Clothing Sweathog Clothing 4 Central Boulevarde media Thames & Hudson (Australia) P/L 11 Central Boulevarde Basic Manufacturing / The Herald & Weekly Times Ltd 127 Todd Road Engineering Basic Manufacturing / Tubemakers Steel 706 Lorimer Street Engineering

::ODMA\PCDOCS\COM_SERVICE_PROD\1166018\1 PORT MELBOURNE LAND USE AND ACTIVITY STUDY 83 Industry Category Organisation Address Website 1999 Address (relocating firms only) Media Type Two Artworks 73 Ingles Street Wholesaling Volante Integrated Technology P/L 7 Westside Avenue www.volante.com.au Wholesaling Yano Trading Co 157 Salmon Street Business Services Commonwealth Bank Of Australia- Salmon Street (Fishermans Bend) Suburban Branch Property Services G&I Daly Cable Layers P/L 90 Turner Street www.daly.net.au Wholesaling Jaques A Terex Company 90 Turner St media Jcdecaux Australia 12/331 Ingles Street Retailing Melbourne City Land Rover Supersite 351 Ingles Street Wholesaling Mettler Toledo 220 Turner Street www.mt.com Advanced Manufacturing Venture Advanced Design 290 Salmon St (automotive)) Engineering Business Services Workforce (Vic) P/L 200 Turner Street Business Services World Class Direct Mail 239 Ingles Street Wholesaling Gunnersens P/L 112 Salmon Street Wholesaling Synergy Exports 157 Salmon Street Wholesaling Michael Weinig Australia P/L 120 Turner Street http://www.weinig.de/

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14. APPENDIX 1B: FIRMS RELOCATING OUT OF STUDY AREA 1999-2003 Industry Company Business Description Relocated from: Relocated to: Basic Manufacturing / Engineering French Par-Bake Supplies Bakers 157 Salmon Street 17 Pipe Rd Laverton North Shipping Celsiunator Industries P/L Cargo & Freight Containers &/or 63 Turner Street 136 Hall St Spotswood Services Wholesaling Formplex Weatherboards Cladding--Building--Domestic 13 Central Boulevarde 486 Glenhuntly Rd Elsternwick Clothing Piping Hot Surfwear P/L Clothing 263-329 Lorimer Street 223 Park St South Melbourne (Pier 35) Shipping Clemenger International Freight P/L Customs Brokers 191 Salmon Street 339 Williamstown Rd Port Melbourne Wholesaling Marsh Dairy Products P/L Dairy Products--W'salers & Mfrs 157 Salmon Street 86 Maribyrnong Rd Footscray Communications Pacific Datacom Data Communications 13 Central Boulevarde 182 Normandy Rd South Melbourne Communications Satellite Telemetry (Aust) P/L Data Communications 2 Douglas Street 155 Hyde St Yarraville Basic Manufacturing / Engineering Industrial Wreckers P/L Demolition Contractors & Equipment 11B Salmon Street 207 Hyde St Yarraville Scientific Agal Scientific Services Laboratory Environmental &/or Pollution 177 Salmon Street 51 Clark St South Melbourne Consultants Scientific Notifier Australia Fire Protection Equipment & 297 Ingles Street (Unit Lambert St Richmond Consultants 2) Wholesaling Seamark Ocean Foods P/L Fish & Seafoods--W'sale 157 Salmon Street 28a Capital Link Dr Campbellfield Business Services Lease Plan Australia Ltd Fleet Management Services 62 Salmon Street 574 St. Kilda Rd Melbourne Communications Gassenheimer Systems P/L Information Technology 830 Lorimer Street 3 Bowen Cres Melbourne Basic Manufacturing / Engineering The Laminating Co Laminating Services 216 Lorimer Street 81 Ireland st West Melbourne Wholesaling Minilab Supply Store Photographic Equipment & 626 Lorimer Street 394a Whitehorse Rd Nunawading Supplies--W'salers & Mfrs Property Services Aerify Group Property Services 11 Salmon Street 640 Geelong Rd Brooklyn Basic Manufacturing / Engineering Recycling Industries P/L Recycling Services Lorimer Street (Cnr 235 Dohertys Rd Laverton North Williamstown Transport & Storage Andrew Green Distribution P/L Refrigerated Transport Services 157 Salmon Street 82 Maribyrnong Rd Footscray Transport & Storage Sneaths Transport P/L Refrigerated Transport Services 157 Salmon Street 8 Little Boundary Rd Laverton Wholesaling Sanford Australia Stationary Supplies 626 Lorimer Street 37 Fiveways Boulevard Noble Park Transport & Storage Schweppes Cottees-Distribution Transport 770 Lorimer Street 600 Geelong Rd Brooklyn Centre Transport & Storage Austpac Transportation Services Transport 830 Lorimer Street 481a Plummer St Port Melbourne P/L Transport & Storage Harris Refridgeration Transport Transport Services 157 Salmon Street 542 Footscray Rd Footscray Transport & Storage Effective Logistics P/L Warehousing 836 Lorimer Street 18 Slough Rd Altona Wholesaling Allwood Machinery P/L Woodworking Machinery &/or 120 Turner Street 35 Spencer St Sunshine Service

::ODMA\PCDOCS\COM_SERVICE_PROD\1166018\1 PORT MELBOURNE LAND USE AND ACTIVITY STUDY 85 Charter Resources Group P/L 263 Lorimer Street 5 Bay St Port Melbourne Basic Manufacturing / Engineering Ventroy Trailers & Welding Lorimer Street (Cnr 28 Eirene St Yarraville Engineers Ingles St) Ecc P/L 11B Salmon Street 33 Queens Rd Melbourne Business Services Supply Chain Management 19 Salmon Street 89 High St Kew Communications Today Tech Computers P/L 6 Westside Avenue 12 Enterprise Crt Mulgrave

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15. APPENDIX 2A: ADVANCED MANUFACTURING (AVIATION, AEROSPACE AND DEFENCE) – CAPABILITY PROFILE (Source Department of Innovation, Industry and Regional Development – Capability Directories)

Service Organisation Address Suburb Postcode Manufacturing R&D Maintenance Design Provision

3M Touch Systems P/L 797 Springvale Road Mulgrave 3170 Yes Yes ADI Limited 607 Bourke Street Melbourne 3000 Yes Yes ADI Limited Engineering and Finn Street Bendigo 3550 Yes Yes Yes Vehicles Aerosonde P/L 41-43 Normanby Rd Noting Hill 3168 Yes Yes Yes Yes Yes Aerospace Materials P/L 8 Cliveden Court Thomastown 3074 Yes Aerostaff Australia P/L 32 Network Drive Port Melbourne 3207 Yes Yes AME Systems 18 Gordon St Ararat 3377 Yes Anderson Corporation P/L 15-16 Nicole Close Bayswater North 3153 Yes Andrew Engineering (Aust.) P/L. 90 Northern Road West Heidelberg 3081 Yes Yes Yes Yes Athlegen 66 Waringa Drive Wendouree 3355 Yes Australian Defence Apparel P/L 14 Gaffney Street Coburg 3058 Yes Yes B.B. Engineering P/L. 19 King Street Airport West 3042 Yes Yes Yes Cablex P/L 262 East Boundary Road East Bentleigh 3165 Yes Yes Chubb Fire 314 Boundary Road, Dindley 3172 Yes Yes Yes Codarra Advanced Systems P/L 141 Osborne Street South Yarra 3141 Yes Yes Yes Yes Yes Contract Tools & Gauges P/L Yes DESA Australia P/L 186 Grange Road Fairfield 3078 Yes Yes Yes Diamond Australia P/L 3 Redland Drive Mitcham 3132 Yes Yes Dimac Tooling P/L 65 Geddes Street Mulgrave 3170 Yes Fairchild Fasteners Melbourne 20 Stamford Rd Oakleigh 3166 Yes P/L Fallshaw Wheels & Castors Ayton Street Sunshine North 3020 Yes Flexible Ducting Australia P/L 1 Cromwell Parade West Footscray 3012 Yes Yes Yes Yes Frontline Australasia P/L 21 Commercial Drive Dandenong 3175 Yes Yes Yes

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Service Organisation Address Suburb Postcode Manufacturing R&D Maintenance Design Provision

Fueltreat Australia P/L 32 Temple Drive Thomastown 3074 Yes Yes Yes Yes Future Fibre Technologies P/L 20 Viewtech Place Rowville 3178 Yes Yes Yes Gerber Technology P/L 538 Swanston Street Carlton 3053 Yes Gippsland aeronautics P/L Morwell 3840 Yes Yes Gryffin P/L 8 Bessemer Road Bayswater 3153 Yes Yes Harrop Engineering Australia 96 Bell Street Preston 3072 Yes Yes P/L. Hawker de Havilland 836 Mountain Highway Bayswater 3153 Yes Yes Components P/L Heuch P/L 3 Powlett Street Moorabbin 3189 Yes Yes Yes Yes Invensys Energy Systems P/L 13 Healey Road Dandenong 3175 Yes Yes Jacobs Radio (Australia) P/L 14 Howship Court East Ringwood 3135 Yes Javac P/L 54 rushdale Street Knoxfield 3180 Yes Yes Yes Yes JMI Aerospace Australia P/L 7 Trade Park Drive Tullamarine 3043 Yes Yes Liquip Sales (Vict) P/L 606 Somerville Road Sunshine West 3020 Yes Yes Lochard Limited 69 Kooyong Road Caulfield North 3161 Yes Yes Marand Precision Engineering 443 Warrigal Road Moorabbin 3189 Yes Yes Yes P/L. Metal Drilling P/L 37 Northgate Drive Thomastown 3074 Yes Yes MFB Products P/L 105 Lewis Road Wantirna South 3152 Yes Nilsen Technologies P/L 43 Sheehan Rd Heidelberg West 3081 Yes Yes Yes Normaliar-Garrett Manufacturing 45 King Street Airport West 3042 Yes P/L Novaline P/L 7 Fran Crescent Rosanna 3084 Yes Yes Yes Yes Optoelectronics P/L 45 William Street, Melbourne 3000 Yes Yes Yes Pacific Composites P/L Brunsdon Street 3153 Yes Bayswater Pains Wessex P/L 1955 Malvern Road East Malvern 3145 Yes Yes Yes Yes Peerless Industrial Systems P/L PO Box 2041 Hampton 3188 Yes

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Service Organisation Address Suburb Postcode Manufacturing R&D Maintenance Design Provision

Precision Australia 6 Glendale Street Nunawading 3131 Yes Production Parts P/L 11 King Street Airport West 3042 Yes Yes Yes Radio Frequency Systems P/L 36 Garden Street Kilsyth 3137 Yes Yes Yes Rolco Products P/L 13 Cahill Street Dandenong 3175 Yes RTK Industries P/L 848 Mountain Highway Bayswater 3153 Yes Yes Yes Setec P/L 19 Henderson Road Knoxfield 3180 Yes Shairzal 28 Jersey Rd Bayswater 3153 Yes Yes Skilled Mechanical Workshops PO Box 528 Moe 3825 Yes Steel Castings P/L 49 Bertie Street Port Melbourne 3207 Yes Trimcast P/L 62 Jersey Rd Bayswater 3122 Yes Unique Micro Design P/L 200 Wellington Road Clayton 3168 Yes Yes Yes Yes Yes Way Out Evacuation Systems 103 ere Street Brighton 3186 Yes Yes Yes Yes P/L Wharington International P/L 50 Hargreaves Street Huntingdale 3166 Yes Access Security Technologies 25 Horwood Drive Breamlea 3227 P/L Adaptive Components P/L PO Box 1266 Moorabbin 3189 Aerostructures Technologies P/L 222 Kingsway South Melbourne 3205 Yes Yes Aerosweep P/L 24 Ceylon St Nunawading 3131 Affairs of State 14 Collins Street Melbourne 3000 Airport Metals (Australia) P/L 140 Nomad Road Essendon Airport 3041 Yes Airport Planning P/L (Airplan) 176 Wellington Parade East Melbourne 3002 Airservices Australia 10 International Square Tullamarine 3043 Australian Industry & Defence 231 High Street Ashburton 3147 Network - Victoria Australian Microfilm Services 230 Bank Street South Melbourne 3205 Aviation Business Link Victoria 69 Kooyong Road Caulfield North 3161 Yes (ABLV) Aviation Business P/L (Airbiz) 176 Wellington Parade East Melbourne 3002

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Service Organisation Address Suburb Postcode Manufacturing R&D Maintenance Design Provision

Aviation Data Systems 2 Research Ave Bundoora 3083 Yes (Australia) P/L Aviation safety Foundation Grants Road, Melbourne Airport 3045 Australia Aviation Systems P/L (Airtech) 176 Wellington Parade East Melbourne 3002 Ball Solutions Group 650 Chapel St South Yarra 3141 Yes Yes Beca P/L 5 Queens Melbourne 3004 Yes Brenco Aerospace P/L 173 Fairbairn Rd Sunshine 3020 Burns Bridge Australia 350 Queen Street Melbourne 3000 C & I Projects P/L 256 Queen Street Melbourne 3000 Yes CGB Precision Products P/L 94 Voltri St Mentone 3194 Communication and Electronic 21 Wangaratta Street Richmond 3121 Yes Yes Yes Developments P/L Communications Design and 114 William St Melbourne 3000 Yes Management Pty Limited Corrosion & Finishing 152 New Street Ringwood 3134 Technologies CRT Mangalore Airport Aerodrome Road RMB Mangalore Airport Daronmont Technologies P/L 21 Huntingdale St Burwood 3125 Deauville Robbins 44 Ridge Road Mount Dandenong 3767 Defence Science & Technology 506 Lorimer Street Fishermens Bend 3207 Yes Organisation Draeger Safety Pacific P/L 3 Ferntree Place Notting Hill 3168 Yes GKN Aerospace Engineering 850 Lorimer St Port Melbourne 3207 Yes Yes Services P/L Greatbiz P/L trading as Ocean 50 Queen Street Melbourne 3000 Hadland Photonics P/L 19A Hampshire Road Glen Waverley 3150 Hardchrome Engineering P/L 175 Wellington Road North Clayton 3168 Yes Honeywell 34 King Street Airport West 3042 Yes Honeywell Aerospace Electronic Lot 2 Trade Park Drive 3043 Yes

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Service Organisation Address Suburb Postcode Manufacturing R&D Maintenance Design Provision

Systems Tullamarine IATIA Limited 46 Rutland Road Box Hill 3129 Yes Independent Instruments First Ave Mentone 3194 Yes (Aviation) P/L (Moorabbin Airport) Industrial Supplies Office 10 Queens Road Melbourne 3004 Yes InterCall Australia 221 Collins St Melbourne 3000 Yes Ionik Consulting 535 Bourke Street Melbourne 3000 Yes Yes Yes Kangan Batman TAFE Private Bag 299 Somerton 3062 Kestrel Aviation College Mangalore Airport 3663 Mangalore Kidde Australia P/L Janine St Scoresby Scoresby 3179 Laser Imaging P/L 1368 Heatherton Road Dandenong 3175 Lauritz Photo P/L 64 Albert Street Port Melbourne 3207 Yes Leading Edge Support Services 39 Johnson Street Pascoe Vale South 3044 Yes Logistic Engineering Services 113 Burgundy Street Heidelberg 3084 Yes Yes P/L Logistics P/L 90 Bruce Street Mt Waverley 3149 Yes Lovitt Technologies Australia 207 Para Road Montmorency 3094 Mangalore Victoria Australia 3663 Maunsell Australia P/L 161 Collins Street Melbourne 3000 Yes Yes Moorabbin Airport Corporation Bundora Parade Mentone 3194 P/L MSX International 183 Ferrars Street South Melbourne 3205 Yes Novatech Systems 309 Reserve Road Cheltenham 3192 Yes Novatech Systems P/L 309 Reserve Road Cheltenham 3192 Novonics Oceania P/L 16 Melverton Drive Hallam 3803 Office of Manufacturing 55 Collins Street Melbourne 3000 Pavement Support Services P/L 176 Wellington Parade East Melbourne 3002

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Service Organisation Address Suburb Postcode Manufacturing R&D Maintenance Design Provision

Peladon Solutions P/L 1579 Burwood Highway Tecoma 3160 Pennant Australasia P/L PO BOX 237 Mount Waverley 3149 Permian P/L 334 Highbury Rd Mt Waverley 3149 Yes Yes Yes Yes Process Design & Fabrication 100 Fairbank Road Clayton 3169 Yes Yes P/L Qualtek Innovation P/L 34 Willow Avenue Glen Waverley 3150 RFI Industries P/L 54 Holloway Drive Bayswater 3153 RLM Systems P/L 4 Wesley Court Burwood East 3151 Yes Yes Scientific Management 131 Church Street Hawthorn 3122 Associates (Operations) Sinclair Knight Merz 590 Orrong Road Armadale 3143 Yes Yes Yes Smart Box Systems 377B Hawthorn Road Caulfield South 3162 Specialised Conductives P/L 7 O'Briens Lane Templestowe 3106 Swinburne University of P.O. Box 218 Hawthorn 3122 Technology SYPAQ Systems P/L 434 St Kilda Rd Melbourne 3004 Yes Yes Tenix Defence P/L - Aerospace World Trade Centre Melbourne 3005 Yes Yes Yes Division Flinders Street The Macservice Group 231 Osborne Avenue Clayton South 3169 Yes Yes The Swann Group 22 William Street Melbourne 3000 Toll Transitions 312/ Ground St Kilda Melbourne 3004 Road Total Logistics Management P/L 263 City Road Southbank 3006 Underwater Video Systems P/L 9 Macquarie Place Boronia 3155 United KG P/L 111 Coventry Street Sth Melbourne 3205 Yes Yes Yes Vantico Pty Limited 235 Settlement Road Thomastown 3074 Vipac Engineers & Scientists Ltd 279 Normanby Road Port Melbourne 3207 Yes Yes Yes Vision Fire & Security 495 Blackburn Road Mount Waverley 3149 White Cleland 454 Nepean Highway Frankston 3199 Yes

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Service Organisation Address Suburb Postcode Manufacturing R&D Maintenance Design Provision

Workskills Professionals P/L 520 Collins Street Melbourne 3000 Yes

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16. APPENDIX 2B: ADVANCED MANUFACTURING (INSTRUMENTATION) – CAPABILITY PROFILE (Source Department of Innovation, Industry and Regional Development – Capability Directory)

Organisation Address Suburb Postcode R&D Design Supply Servicing Distribution Manufacturing Manufacturing

ABB Industry P/L 61 Betula Avenue, Vermont 3133 Yes Yes Advanced Surgical Technologies P/L 140 Stawell Street, Burnley 3121 Yes Air Communications P/L First Street, Moorabbin Airport Yes Yes Air-Met Scientific P/L 11 Ceylon Street, Nunawading 3131 Yes Alternative Plastics Australia P/L 35 Boundary Road, North Melbourne 3051 AMS Technical Services P/L 60 High Street, Glen Iris 3146 Yes Yes Amtron Valve Monitoring Device P/L 260 Wickham Road, Moorabbin 3189 AP Edwards Laboratories P/L Railway Walk South, Hampton 3188 Applied Measurement Australia P/L 14 Dalgetty Street, Oakleigh 3166 Yes Yes Austramedex (Vic) P/L 160 New Street, Ringwood 3134 Autoscan Systems P/L 293 Bay Street, Brighton 3186 Aviaquip P/L 41 Kembla Street, Cheltenham 3192 Yes Yes Yes B&L Tetlow P/L 12 George Street, Blackburn 3130 Barmed P/L 408 High Street, Northcote 3070 Yes Berthold Australia P/L 36B Clements Avenue, Bundoora 3083 Yes Bio Electronics P/L 964 Mount Alexander Road, Essendon 3040 Yes Yes Carter-Scott Design 16 Wilson Avenue, Brunswick 3056 Carter-Scott Manufacturing P/L Chemtex P/L 28 Kilpa Road, Moorabbin 3189 Compumedics 1 Marine Parade, Abbotsford 3067 Comweld Medical 85 Chifley Drive, Preston 3072 Contrec P/L 22 Hall Street, Hawthorn East 3123 CryoLogic 23 Hardner Road, Mount Waverley 3149 Yes Yes Cuming & Associates P/L 68 Robinson Road, Hawthorn 3122 Yes Yes DataTaker P/L 7 Seismic Court, Rowville 3178 Yes

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Organisation Address Suburb Postcode R&D Design Supply Servicing Distribution Manufacturing Manufacturing

Deanquip Valve Automation & Controls 5 Kearney Street, Bayswater 3153 Detection Systems P/L 15 Clare Street, Bayswater 3153 Dewar P/L 32 Taylors Road, Croydon 3136 Dindima Group P/L 271 Burwood Highway, Burwood 3125 Yes Yes e.Merge Medical 15 Beverley Street, Portland 3305 Yes Yes Yes ECE Fast 26 Business Park Drive, Notting Hill 3168 Yes Yes Ecotech P/L 12 Apollo Court, Blackburn 3130 Yes Yes EDL Australia P/L 17 Arawatta Street, Carnegie 3163 Yes Yes Yes Yes Edwards Repetition P/L 1 Apollo Drive, Hallam 3803 Fastron Technologies P/L 25 Kingsley Close, Rowville 3178 Flexible Drive Agencies P/L 86 Stubbs Street, Kensington 3031 Yes Yes Futuremedics Australia (Vic) 190 Belmore Road, Balwyn 3103 Yes Yes Gallay Scientific 6 Florence Street, Burwood 3125 Yes GBC Scientific Equipment P/L 21 Monterey Road, Dandenong 3175 Yes Yes Gedge Systems 488 Church Street, Richmond 3121 George Lovitt (Manufacturing) P/L 207 Para Road, Montmorency 3094 Yes Geosystems Australia P/L 20 William Street East, Lilydale 3140 Yes Yes Yes Geotest Instrumentation 454 Waverley Road, Malvern East 3145 Yes Graykon Scientific 3 Howell Avenue, Surrey Hills 3127 Yes Group Electronics P/L 47 Southern Road, Mentone 3194 Yes Henderson’s Automotive Group 231 Thompson Road, Geelong North 3215 Yes IMI Norgren (Australia) P/L 33 South Corporate Rowville 3178 Yes Yes Avenue, Independent Instruments (Aviation) P/L First Ave Moorabbin Airport Mentone 3194 Yes Industrial Equipment and Control P/L 65 McClure Street, Thornbury 3071 Yes Yes Yes Industrial Pyrometers Australia P/L 26–30 Howleys Road, Notting Hill 3168 Innovonics P/L 121 Arden Street, North Melbourne 3051 Yes Institute of Instrumentation and Control PO Box 82, Deepdene 3103 Australia Inc

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Organisation Address Suburb Postcode R&D Design Supply Servicing Distribution Manufacturing Manufacturing

Ironcore Transformers P/L 22 Quinn Street, Preston 3072 Yes Yes JA Floyd & Co (Sales) P/L 82 Keilor Road, Essendon North 3041 Yes Javac P/L 54 Rushdale Street, Knoxfield 3180 Yes Yes Yes Yes KEL Aerospace P/L 231 High Street, Ashburton 3147 Yes Yes Kim Valves Australia P/L 12 Treforest Drive, Clayton 3168 Yes Laerdal P/L 23 Edward Street, Oakleigh 3166 Lectromax Australia P/L 13 Brougham Street, Eltham 3095 Yes Lochard P/L 69 Kooyong Road, Caulfield North 3161 Mackay Consolidated Industries 260 Chesterville Road, Moorabbin 3189 Marand Precision Engineering P/L 443 Warragal Road, Moorabbin 3189 Yes Yes Medical Developments Australia P/L 56 Smith Road, Springvale 3171 Yes Yes Yes Merck P/L 207 Colchester Road, Kilsyth 3137 Yes Met-App P/L 29 Stafford Street, Huntingdale 3166 Miller Graphic P/L 226 Alexander Parade East, Clifton Hill 3068 Yes Monitor Sensors (Aust) P/L 1 Williamsons Road, Doncaster 3108 Yes Yes National Instruments Australia 34 New Street, Ringwood 3134 Corporation NHP Electrical Engineering Products 67 River Street, Richmond 3121 P/L Novatech Controls (Aust) P/L 309 Reserve Road, Cheltenham 3192 Yes Yes Optech Diagnostic & Surgical P/L 404 Albert Street, East Melbourne 3002 Optical and Photometric Technology 25 Richards Road, Hoppers 3029 Yes P/L Crossing Phasefale P/L 36 Bulli Street, Moorabbin 3189 Yes Yes Precision Circuits P/L 6 Glendale Street, Nunawading 3131 Yes Yes Process Sensing & Control P/L 18 Winyard Drive, Mooroolbark 3138 Yes Protronics Technologies 260 Wickham Road, Moorabbin 3189 Pryde Measurement P/L 615 Warrigal Road, Ashburton 3147 Yes Yes Purgon Engineering P/L 50 Potter Street, Craigieburn 3064 R&I Instrument & Gear Co (Aust) P/L 393 Lower Dandenong Dingley 3172 Yes Yes Yes

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Organisation Address Suburb Postcode R&D Design Supply Servicing Distribution Manufacturing Manufacturing

Road, Rapid Precision Engineering P/L 30 Greenaway Street, Bulleen 3105 Red Phase Instruments 4 Alfred Street, Blackburn 3130 Redflex Communications Systems P/L 29 Eastern Road, South 3205 Yes Yes Melbourne RFI Industries P/L 54 Holloway Drive Bayswater 3153 Rheology Solutions P/L 83 Hastings Road, Greendale 3341 Yes Yes Rockwell Collins International Inc Cnr Allied Drive and Tullamarine 3043 Sharps, Road Rosebank Engineering P/L 77 Nott Street, Port Melbourne 3207 Scientific Devices Australia P/L 118 Atkinson Street, Oakleigh 3166 Yes Seismology Research Centre 2 Park Drive, Bundoora 3083 Yes Yes Yes Shimadzu Australia Manufacturing P/L 7 Monterey Street, Dandenong 3175 Siemens Limited 885 Mountain Highway, Bayswater 3153 Yes Yes Siltex (Australia) P/L 18 Ardena Court, East Bentleigh 3165 Yes Yes Yes Smiths Industries Aerospace Australia 153 Park Street, South 3205 P/L Melbourne Surgicare P/L 11 Urban Street, Braeside 3195 Technical & Scientific Equipment Co 13 Aitchison Avenue, Ashburton 3147 P/L Tech-Rentals P/L 12 Maroondah Highway, Ringwood 3134 Testo Sense P/L 653 Mountain Highway, Bayswater 3153 Yes Yes Thomson Scientific Instruments P/L 216 Drummond Street, Carlton 3053 Yes Trewavis Surgical Instruments P/L 385 Dorset Road, Boronia 3155 Yes Underwater Video Systems P/L 9 Macquarie Place Boronia 3155 Yes United Surface Technologies P/L 32 Aberdeen Road, Altona 3018 Vaisala P/L 3 Guest Street, Hawthorn 3122 Yes Yes Varian Australia P/L 679 Springvale Road, Mulgrave 3170 VDO Australia P/L 115 Northern Road, Heidelberg West 3081 Yes Yes Versatile Technology P/L 10 Simpson Place, Hawthorn 3122 Yes Yes Yes Yes

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Organisation Address Suburb Postcode R&D Design Supply Servicing Distribution Manufacturing Manufacturing

Vipac Engineers & Scientists Ltd 279 Normanby Road Port Melbourne 3207 Vision Instruments Limited 495 Blackburn Road, Mount Waverley 3149 Yes Yes Walker Filtration P/L 197 Sherbourne Road, Eltham 3095 Yes Yes Yes Wika Australia P/L 17 Summer Lane, Ringwood 3134 Yes Yes

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