Canberra Outlet Centre Economic Impact

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Canberra Outlet Centre Economic Impact Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick (Canberra Outlet Centre) Economic impact considerations October 2015 MacroPlan Dimasi MELBOURNE SYDNEY Level 4 Level 6 356 Collins Street 39 Martin Place Melbourne VIC 3000 Sydney NSW 2000 (03) 9600 0500 (02) 9221 5211 BRISBANE GOLD COAST Level 15 Level 2 111 Eagle Street 89 -91 Surf Parade Brisbane QLD 4000 Broadbeach QLD 4218 (07) 3221 8166 (07) 3221 8166 ADELAIDE PERTH Ground Floor Level 1 89 King William Street 89 St Georges Terrace Adelaide SA 5000 Perth WA 6000 (08) 8221 6332 (08) 9225 7200 Prepared for: Direct Factory Outlets Canberra Pty Ltd (Receivers & Managers Appointed) MacroPlan Dimasi staff responsible for this report: Tony Dimasi, Managing Director – Retail Denis Chung, Manager – Retail Ziggy Gelman, Consultant – Retail Table of contents Executive summary i Introduction iii 1 Centre location and context 1 2 Need and demand 5 Market research 12 Sales potential 13 3 Impacts on other activity centres 16 4 Economic and social benefits 19 Net community benefit 21 Executive summary • Canberra Outlet Centre is located within the Fyshwick district to the south-east of the Canberra City Centre, in a high profile and easily accessible location. Fyshwick is a large, well established employment and retail/bulky goods precinct, and is also the primary focus of industrial/showroom activity in Canberra. • Canberra Outlet Centre has a floorspace of some 45,400 sq.m which covers both the factory outlet and homemaker components of the centre. The centre is in receivership and has significant vacancies. • A small supermarket of 1,000 sq.m at Canberra Outlet Centre aims to provide needed services to current and future local workers and businesses in Fyshwick and create additional employment in the area, also effectively utilising some of the vacant floorspace at the centre. • Independent market research undertaken in July and August 2015 at the Canberra Outlet Centre identified the need and demand for a supermarket, which would be mainly used by surrounding workers and existing centre shoppers for their convenience shopping. More than 65% of the surveyed businesses revealed that they, or their employees, would use a supermarket facility at the Canberra Outlet Centre. The majority of internal tenants indicated that they would use a supermarket facility at the centre for their business purchases (77% of respondents) or for their own personal use (88%), while over 50% of shoppers expressed a strong desire for a supermarket at the centre. • There are no supermarkets located in Fyshwick, with the closest supermarkets located over 4 km away at Narrabundah (960 sq.m), Griffith (800 sq.m) and Manuka (3,480 sq.m). • There are 12,700 workers within close proximity of Canberra Outlet Centre, who generate a total of $90.6 million of FLG expenditure. Around 10% of this expenditure is expected to be directed to a future supermarket at Canberra Outlet Centre. Local businesses and a small proportion of existing shoppers are also expected to direct some spending to a future supermarket at the centre. • The sales potential of a 1,000 sq.m supermarket at Canberra Outlet Centre is estimated at around $11.6 million in 2016/17 (in constant 2014/15 dollars and including GST). Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick i (Canberra Outlet Centre) Economic impact considerations Executive summary • We estimate that only around $2 million, or 18.2%, of the estimated supermarket sales would be redirected/redistributed from supermarkets located in the immediate area, while around $6 million, or 51.7%, of the estimated supermarket sales, would be expected to flow from supermarkets located in the broad Canberra region, as the majority of the supermarket patronage is expected to originate from a broad region from throughout Canberra, rather than solely from the local area. • The estimated dollar impacts would be distributed across a large number of supermarket facilities, and would be all relatively minor. The estimated impacts therefore would not threaten the viability of any surrounding supermarket facilities, and existing facilities are likely to recover from such trading impacts within a short period of time (less than one year). • In particular, the existing supermarkets in the nearby local centres are not threatened by this proposal by virtue of the fact that: - the great majority of the business to be achieved by the proposed small supermarket at Canberra Outlet Centre will be drawn from workers of Fyshwick and the existing visitor base of the Canberra Outlet Centre, rather than from the local population of Narrabundah, Griffith or Kingston; and - the trading hours for the proposed small supermarket will be 10 am to 6 pm, as compared with much longer trading hours that are available to the various supermarket facilities within the local centres. • On the other side of the equation, the development will result in a broad range of economic benefits, particularly in improving the range of convenience retail facilities for local workers and shoppers the Fyshwick area, as well as directly creating over 50 new ongoing jobs, and in total more than 100 jobs, which will benefit the local economy of the region. • Thus, it can be concluded that a significant net community benefit will result from the proposed inclusion of a supermarket at Canberra Outlet Centre. Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick ii (Canberra Outlet Centre) Economic impact considerations Introduction This report examines the economic issues related to the proposed Territory Plan Variation – Block 8, Section 48 Fyshwick, which proposes a site specific variation for the Canberra Outlet Centre to allow for the development of a supermarket restricted to 1,000 sq.m within the existing building envelope of the centre. The report sets out the following in assessing the likely economic impacts and benefits from the proposed specific plan variation: i. The location and surrounding context of the Canberra Outlet Centre. ii. The need and demand for the proposed supermarket of 1,000 sq.m within the centre, and the likely sales potential of the store. iii. The trading impacts which can be anticipated on the surrounding network of activity centres, particularly the closest local centres to the Canberra Outlet Centre. iv. The economic and related social benefits that would result from the proposed variation. Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick iii (Canberra Outlet Centre) Economic impact considerations 1 Centre location and context Canberra Outlet Centre is situated on the north-east corner of Canberra Avenue and Newcastle Street, within the Fyshwick district to the south-east of the Canberra City Centre (refer Map 1.1). It is a high profile and easily accessible location, with Canberra Avenue being the main road between Queanbeyan and Canberra. Fyshwick is a large, well established employment and retail/bulky goods precinct, and is also the primary focus of industrial/showroom activity in Canberra. The Monaro Highway runs a short distance to the west of the centre, providing further regional access to the centre, particularly for Tuggeranong residents in southern Canberra; while Hindmarsh Drive provides direct access from the Woden Valley and Weston Creek districts. Residents from the central and northern suburbs of Canberra also have relatively straightforward access to the site, via the main roads leading to the airport, which connect with the Monaro Highway a short distance north of Fyshwick. Regional accessibility to Fyshwick is excellent, and this is why it has emerged over many years as a key employment district for the ACT, as well as being a major retail/bulky goods destination. Map 1.2 illustrates the local context of the centre, showing its location within the southern part of Fyshwick. Fyshwick is a major employment precinct of Canberra and includes a wide range of commercial and retail (mostly bulky goods) facilities. The area immediately surrounding Canberra Outlet Centre incudes many retailers such as Chemist Warehouse, Anaconda, Baby Bunting to the east, and The Good Guys, Bunnings and Domayne to the north. Canberra Outlet Centre has a floorspace of some 45,400 sq.m which covers both the factory outlet and homemaker components of the centre. The centre is in receivership and has significant vacancies. Proposed Territory Plan Variation – Block 8, Section 48 Fyshwick 1 (Canberra Outlet Centre) Economic impact considerations Map 1.1: Canberra Outlet Centre Regional context Map 1.2: Canberra Outlet Centre Site location 1 Centre location and context A small supermarket of 1,000 sq.m at Canberra Outlet Centre aims to: • provide needed services to local workers and businesses in Fyshwick; • effectively use some of the vacant floorspace at the centre, at what is already a well- established retail destination; • create additional employment; and • provide services for future workers and businesses as employment in Fyshwick grows. There are many examples where factory outlet centres in Australia include supermarket facilities, including the following: • Harbour Town on the Gold Coast, which is 51,000 sq.m in size, includes a full scale Woolworths supermarket (3,890 sq.m). The centre is the only factory outlet centre serving the Gold Coast, which includes a resident population of around 550,000. • Harbour Town Adelaide is 30,000 sq.m in size and includes a 3,800 sq.m Woolworths supermarket as well as a 1,000 sq.m Target outlet store. The centre is located in a non- residential precinct of Adelaide, within the Adelaide Airport, and draws customers from throughout the wider Adelaide region. • DFO Cairns includes 22,740 sq.m of retail floorspace including a full-line Coles supermarket of around 3,500 sq.m. The centre is located in Westcourt to the south west of the Cairns CBD, and is the only outlet centre in Cairns, serving a population of around 240,000 in the surrounding region.
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