Kaufland Mornington Economic Impact Assessment Peer Review
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KAUFLAND MORNINGTON ECONOMIC IMPACT ASSESSMENT PEER REVIEW EXPERT EVIDENCE STATEMENT PAUL SHIPP, DIRECTOR, URBAN ENTERPRISE PTY LTD 15 FEBRUARY 2019 PLANNING AND PROPERTY PARTNERS Urban Enterprise Urban Planning / Land Economics / Tourism Planning / Industry Software www.urbanenterprise.com.au 1 CONTENTS 1. QUALIFICATIONS ......................................................................................................................................... 1 2. ENGAGEMENT .............................................................................................................................................. 2 3. PROPOSAL ................................................................................................................................................... 3 3.1. CONTEXT 3 3.2. SUBJECT SITE 3 3.3. PROPOSAL 4 3.4. ECONOMIC ASSESSMENT TRIGGERED 5 4. ECONOMIC IMPACT ASSESSMENT .............................................................................................................. 6 4.1. CONTENT AND STRUCTURE 6 4.2. KEY ELEMENTS AND OVERALL COMMENTS 6 5. PEER REVIEW FINDINGS .............................................................................................................................. 7 5.1. TRADE AREA 7 5.2. COMPETING RETAILERS 9 5.3. ESTIMATED SALES POTENTIAL 11 5.4. RETAIL EXPENDITURE PROJECTIONS AND MARKET SHARE 12 5.5. ECONOMIC IMPACTS 14 5.6. NET COMMUNITY BENEFIT 16 6. SUBMISSIONS ........................................................................................................................................... 18 7. CONCLUSIONS ........................................................................................................................................... 20 APPENDICES .................................................................................................................................................. 21 APPENDIX A REQUIREMENTS OF PLANNING PANNELS VICTORIA – EXPERT EVIDENCE 21 FIGURES FIGURE 1 SUBJECT SITE LOCATION AND SURROUNDING CONTEXT ................................................................ 3 FIGURE 2 MAIN TRADE AREA ADOPTED IN EIA ................................................................................................ 7 FIGURE 3 SECTIONS OF THE MTA IN EXCESS OF 10 MINUTE DRIVE FROM SUBJECT SITE ............................. 8 TABLES TABLE 1 SUMMARY OF PROPOSAL FLOORSPACE ........................................................................................... 4 TABLE 2 MTA POPULATION AND PROJECTION ESTIMATES ............................................................................. 9 TABLE 3 COMPETING SUPERMARKETS AND FLOORSPACE IN MTA ................................................................. 9 TABLE 4 POTENTIAL FLOORSPACE AND TURNOVER BREAKDOWN, BASED ON EIA ASSUMPTIONS ............... 11 TABLE 5 REVISED ESTIMATES OF MARKET SHARE AND ECONOMIC IMPACT ................................................ 14 1. QUALIFICATIONS 1. My name is Paul Shipp and I am a Director of Urban Enterprise Pty Ltd, situated at Level 1, 302-304 Barkly Street, Brunswick. 2. Urban Enterprise is a firm of urban planners, land economists and tourism planners based in Melbourne. The firm has 30 years’ experience providing consultancy services to all levels of Government and a wide range of private sector organisations in Victoria and in other States of Australia. 3. I am a qualified urban planner and economist with 13 years’ experience consulting on planning, economic and tourism matters. 4. My educational qualifications and memberships of professional associations include: Bachelor of Urban Planning and Development, University of Melbourne; Master of Commerce, RMIT University; Registered Planner, Planning Institute of Australia; Member, Victorian Planning and Environmental Law Association 5. I specialise in the field of urban economics and have prepared a wide range of economic assessments for the residential, retail, commercial, industrial and tourism sectors to inform planning strategies, economic strategies, structure plans and economic impact assessments and Planning Scheme Amendments. 6. I have appeared as an expert witness at Planning Panel, Advisory Committee and VCAT hearings on many occasions in respect of urban economic and development contributions matters. 1 URBAN ENTERPRISE FEB - 19 2. ENGAGEMENT 7. I was instructed by Planning and Property Partners on behalf of Kaufland Australia Pty Ltd to prepare an expert evidence statement to present at the Advisory Committee hearing in relation to this matter. 8. My instructions were to prepare an expert witness statement for the Mornington site which: Provides a peer review of the Kaufland Australia Proposed Store Mornington, Melbourne Economic Impact Assessment, November 2018, Dimasi and Co (the Economic Impact Assessment, or the EIA); Provides a response to submissions received, as relevant to my expertise; Provides an analysis of the anticipated impact on nearby Activity Centres; and Notes that the store operating hours will be 7am to midnight. 9. I have reviewed the following relevant documentation: Kaufland Australia Proposed Store Mornington, Melbourne – Economic Impact Assessment, November 2018, Dimasi & co (the EIA); Kaufland in Victoria, Consumer and Economic Impacts – Overview, June 2018, Dimasi & co (the Consumer and Economic Impacts Overview); Town Planning Assessment, Kaufland Supermarket Network – Victorian Entry Proposal, Part Seven, 1158 Nepean Highway, Mornington, Revision 2, Planning and Property Partners (the Planning Assessment); and Town Planning Application Drawings and Designs Rev E1, Kaufland, Mornington, Leffler Simes Architects (June 2018) (the exhibited TPA Plans), and an amended set of plans shown as Rev ACP (Amended Plans). EXPERT EVIDENCE – PAUL SHIPP KAUFLAND MORNINGTON EIA PEER REVIEW 2 PLANNING AND PROPERTY PARTNERS 3. PROPOSAL 10. In this section, I provide a summary of the proposal as relevant to my instructions and expertise. 3.1. CONTEXT 11. Kaufland is a major German supermarket brand seeking to establish a presence in Australia and Victoria. 12. In the initial phase of its introduction to Victoria, Kaufland Australia propose to establish six Kaufland supermarkets in Melbourne in the suburbs of Dandenong, Epping, Oakleigh South, Coolaroo, Chirnside Park and Mornington. 3.2. SUBJECT SITE 13. In Mornington, a new Kaufland supermarket is proposed to be established at 1158 Nepean Highway, Mornington (the subject site). I provide an aerial image of the subject site and surrounds at Figure 1. 14. The subject site is currently within the Industrial 3 Zone of the Mornington Peninsula Planning Scheme. 15. The subject site has frontage to the Nepean Highway, which is a major arterial road connecting central Melbourne with the Mornington Peninsula, traversing through most major townships along the Port Phillip Bay coastline. 16. The subject site is located adjacent to the Mornington Industrial Park and an existing large format retail centre (known as Peninsula Home), which contains an Aldi supermarket and several major national large format retailers including Bunnings Warehouse, Forty Winks, Officeworks, Repco, BCF, Harvey Norman and Rebel Sport. 17. The subject site is located approximately 2km east of the Mornington Activity Centre, or 3.5km (7 minutes) by road. FIGURE 1 SUBJECT SITE LOCATION AND SURROUNDING CONTEXT Source: Urban Enterprise. 3 URBAN ENTERPRISE FEB - 19 3.3. PROPOSAL 18. Kaufland propose to establish a new Kaufland supermarket, ancillary retail floorspace and car parking at the subject site (the proposal). 19. My peer review was based on the TPA Plans and not the Amended Plans. I have reviewed the Amended Plans and note that the floorspace allocations are identical to those in the TPA Plans, with minor differences to internal space and car parking noted below. 20. Based on my review of the TPA Plans (p.5) and the Planning Assessment, the proposal will consist of: A Kaufland supermarket containing 5,528 sqm of leasable floorspace; Two separate retail tenancies with a combined total of 554 sqm of leasable floorspace (including a Food Hall in the Amended Plans); Egress, entry, mall and toilet areas totalling 931sqm of non-leasable area; and 430 car parking spaces (380 spaces in the Amended Plans). 21. In Table 1, I provide a summary of the proposal in terms of leasable retail floorspace, derived from the TPA Plans and the Planning Assessment. 22. I calculate that the proposal will contain approximately 6,082sqm of leasable retail area. 23. In the course of my peer review, it was not clear to me whether the EIA assesses the impact of the Kaufland floorspace only (i.e. 5,528 sqm) or the total leasable area of the proposal (6,082 sqm). TABLE 1 SUMMARY OF PROPOSAL FLOORSPACE KAUFLAND LEASABLE OTHER RETAIL TENANCY TOTAL LEASABLE USE AREA (SQM) LEASABLE AREA (SQM) RETAIL AREA (SQM) Supermarket 3,610 0 3,610 Liquor 354 0 354 Administration and ‘back of house’ 1,564 0 1,564 Other tenancies 0 554 554 Total 5,528 554 6,082 Source: TPA,, pg. 5. POSITION IN THE SUPERMARKET HIERARCHY 24. The Kaufland supermarket model is considerably larger in terms of floorspace than the typical full-line supermarket model of Coles and Woolworths which make up the majority of supermarkets in Australia. 25. Full-line Coles and Woolworths supermarkets commonly contain in the order of 3,000sqm to 4,000sqm of retail floorspace, however some more recent supermarkets contain between 4,000sqm and 5,000sqm. 26. Larger format supermarkets are less common in Melbourne, however