Olifantsfontein Filling Station
Total Page:16
File Type:pdf, Size:1020Kb
OLIFANTSFONTEIN FILLING STATION Executive Summary Urban-Econ was appointed by Century Properties to undertake an independent focussed market investigation for the proposed Olifantsfontein Filling Station to be situated on Olifantsfontein Road, Midrand. Project Brief To address certain themes in order to indicate the expansion of the market demand and compare it to the supply in motivation for the development of the Olifantsfontein Filling Station. This executive summary includes an overview of the following sections: Locality of proposed filling station; Accessibility of the proposed filling station site; Traffic volume growth assessment; Supply Analysis; Demand Driver Analysis; and Conclusions and Recommendations. Locality and Accessibility of proposed filling station site Locality of Proposed Filling Station The proposed filling station site is ideally located in Midrand which is described as a relatively new area between Pretoria and Johannesburg. Today, there are very few remaining farms and small holdings that once characterised the area as the Midrand area almost connects the two cities. Accessibility of Proposed Filling Station Map 1: Accessibility of the Proposed Filling Station Site The location of the proposed filling station development site is accessible via a variety of different roads leading towards the development site and with highway close by. The N1 connects sub places as well as main towns to the proposed development site. The site is also located alongside Olifantsfontein/ Summit Road (R562) which carries a lot of traffic during different times of the day. Map 1 illustrates the accessibility to the proposed filling station site. The site is ideally surrounded by major corridor routes, which leads to constant transient traffic ensuring good exposure and visibility of the site. Visibility is evident when driving along Olifantsfontein/ Summit Road towards the N1 national highway. There are a number of sub places surrounding the proposed development site, for example Country View, Erand AH, Noordwyk, Crescent Wood Country Estate, Savannah Hills, etcetera. High levels of transient traffic on Summit Road, as well as on the surrounding roads, during morning and afternoon peak hours, result in a variety of motorists, which might potentially utilise the future filling station development. Urban-Econ Development Economists [email protected] 2 Tel: 012 342 8686 OLIFANTSFONTEIN FILLING STATION Traffic Volume Growth Growth in Vehicle Population There has been a significant growth since 2014 in terms of the total number of vehicles produced in South Africa. There has been an increase of 49,575 vehicles produced in 2015 with a variation of 8.8%. This a significant increase indicating that the number of vehicles on the roads have increased, ultimately causing an increase in the demand for fuel. The total number of new vehicle registrations in Gauteng for 2015 was 24 127 vehicles and 21 607 vehicles during 2016. This indicates a slight decline in the number of registrations; however, there is still a high number of new vehicle registrations in Gauteng, which indicates an increase in the number of vehicles on the roads. Estimate of Midrand Vehicle Population Based on calculations it is estimated Midrand has experienced drastic increase from 2008 to 2016 in resident vehicle population (from 138,360 to 176,128 in 2016), indicating a massive sudden increase of motorists on the roads, which increases the amount of vehicles which may result in higher demand for fuel. Traffic Volume Growth The R55 north-bound at Blue Hills has an average traffic volume growth of 11.8% per annum since 1996. The Olifantsfontein east-bound west of the N1 has the second largest increase in traffic volume from 1996 – 2016 with an average of 6.7% increase per annum. Development Implications Midrand has a significant increase in traffic volumes along all major corridors causing higher demand for fuel. The proposed filling station is located on Olifantsfontein road, which provides good access to the large transient market. An increase in household and vehicle ownership causes an increase in demand. The high new vehicles registrations in the Gauteng Province leads to a higher demand for fuel within the province, as well as the high vehicle production within South Africa. The proximity of the proposed filling station to three major corridors increases transient traffic, which ultimately leads to a higher demand for fuel. Lastly an increase in new surrounding developments creates more traffic and a higher demand for fuel. Supply Analysis Four filling stations are located within 1.5 kilometres from the proposed site in a western and eastern direction, however, none of these existing filling stations enjoy direct access from Olifantsfontein Road. Motorists traveling in a northern and southern direction, therefore, have good access to filling stations along Lever road and the R101, while there is currently no provision made for motorists travelling west and south regionally. The addition of a filling station directly accessed from Olifantsfontein Road will, thus, serve motorists travelling in a western and southern direction along this regional road. Urban-Econ Development Economists [email protected] 3 Tel: 012 342 8686 OLIFANTSFONTEIN FILLING STATION A concentration of filling stations can be found at the intersection of the N1 national road and New road, located approximately 3 kilometres south of the proposed site. It is evident that these filling stations mainly serve motorists travelling along New road, the N1 and the R101. The various roads’ areas of influence indicate a clear pattern in terms of the roads stretching from a northern to southern direction, while the roads stretching from east to west indicates much less provision for filling stations. Filling Station Supply Timeline There are quite a lot of filling stations that where developed before 2004, and not so much have been constructed thereafter. Timeline of filling station developments Source: Own construction based on site visits, 2016 Additional Supply Gap There used to be additional supply within the study area, on the corner of Olifantsfontein and Old Pretoria Road. Map 2 illustrates the Sasol filling station which was demolished after 2008 to make way for the Gautrain. Therefore, there is one less filling station within the market area. Urban-Econ Development Economists [email protected] 4 Tel: 012 342 8686 OLIFANTSFONTEIN FILLING STATION Map 1: Sasol on corner of Olifantsfontein and Old Pretoria Road 2008 2016 Source: Google Earth, 2016 The Sasol used to pump 800 000 litres at the time. Therefore, it can be noted that there is a gap in the market along the Olifantsfontein road and the proposed filling station would serve the market gap. Existing Filling Station Volumes There are currently 17 existing filling stations within the 5km radius from the proposed filling station site. Filling Station Estimated Sales Shell Ultra City – Big Ben North Golden City 1 200 000 litres Caltex – Egoli South 700 000 litres Shell - Noordwyk 650 000 litres Engen – Noordwyk Motors 550 000 litres Engen – Country View 350 000 litres Caltex – Randjiesfontein Corporate Park 600 000 litres Shell – Samrand Road 1 200 000 litres BP - Boulders 750 000 litres Engen - Erand 450 000 litres Shell – New Road 750 000 litres Caltex – Egoli North 700 000 litres Total - Midrand 400 000 litres Excel – Midrand (Now Sasol) 400 000 litres Engen - Midrand 350 000 litres Sasol (R55) 475 000 litres Engen (White Hills) 550 000 litres Shell Ultra City – Midrand Jacaranda 1 200 000 litres Total estimated sales 11 275 000 litres Urban-Econ Development Economists [email protected] 5 Tel: 012 342 8686 OLIFANTSFONTEIN FILLING STATION Demand Driver Analysis Figure 14 illustrated the growth within the study area before 2006 until 2016. It is clear that there has been some significant growth in and around the Midrand area. This indicates there was an increase in the amount of motorists within the study area as the amount of people have increased. Figure 1: Study Area Growth (2006 – 2016) BEFORE 2006 2006 - 2010 2010 - 2016 Residential (number of units) There are approximately 3, 572 residential units within the 5km radius, where there is already a high demand based on large expansion. The area within the 5km radius is set to further densify based on new and upcoming residential developments. The timeline summary indicated that there was quite a lot of new residential developments that took place specifically during 2012 and 2015, indicating an increase in the residential market. It is therefore evident that the market is increasing and therefore there is an increase in demand for a filling station. Commercial (Office and retail m2) Approximately 1,054,769m2 commercial properties within the 5km radius, where there is already a high demand based on the large expansion. The area within the 5km radius is set to further expand based on new and upcoming developments. There is quite a lot of new commercial developments that took place after 2010, alternatively creating an increase in the number of motorists and the market gap for a new filling station. It is therefore evident that the market is increasing and therefore there is an increase in demand for a filling station. Warehousing/ Industrial (bulk m2) There is approximately 992,330m2 warehousing and industrial properties within the 5km radius. Furthermore, there is a large number of expansion that took place during the past couple of years, and currently there are still new warehousing and industrial developments taking place. This bodes well for the proposed filling station site as the market for filling stations is expanding throughout the 5km radius from the site. It is evident that there is quite a lot of new warehouse and industrial developments that took place after 2008, alternatively creating an increase in the number of motorists and the market gap for a new filling station. It is therefore evident that the market is increasing and therefore there is an increase in demand for a filling station.