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Cumberland Employment and Innovation Lands Study (2019) CUMBERLAND EMPLOYMENT and INNOVATION LANDS STUDY

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Cumberland Employment and Innovation Lands Study (2019) CUMBERLAND EMPLOYMENT and INNOVATION LANDS STUDY Cumberland Employment and Innovation Lands Study (2019) CUMBERLAND EMPLOYMENT AND INNOVATION LANDS STUDY DOCUMENT CONTROL Job ID: J301 Job Name: Cumberland Employment and Innovation Lands Study Client: Cumberland Council Client Contact: Nyambura Myaniki Project Manager: Esther Cheong Email: [email protected] Telephone: 02 9283 8400 Document Name: Cumberland EILS & LUPF final Last Saved: 3/4/2019 9:57 AM Version Date Reviewed Approved Draft v1 23/08/2017 JV, EC EC Draft v2 28/08/2017 JV, EC EC Draft v3 4/09/2017 JV, EC EC Final draft 25/03/2019 JV, EC EC Final 3/04/2019 JV, EC EC Disclaimer: Whilst all care and diligence have been exercised in the preparation of this report, AEC Group Pty Ltd does not warrant the accuracy of the information contained within and accepts no liability for any loss or damage that may be suffered as a result of reliance on this information, whether or not there has been any error, omission or negligence on the part of AEC Group Pty Ltd or their employees. Any forecasts or projections used in the analysis can be affected by a number of unforeseen variables, and as such no warranty is given that a particular set of results will in fact be achieved. 2 CUMBERLAND EMPLOYMENT AND INNOVATION LANDS STUDY EXECUTIVE SUMMARY BACKGROUND AND SCOPE Cumberland local government area is in the Central City District and was formed in 2016. Cumberland’s employment and innovation lands are zoned IN1 General Industrial, IN2 Light Industrial, B6 Business Development, B6 Enterprise Corridor and B7 Business Park. These lands accommodate a mix of traditional industries and technologically advanced businesses who mutually value the centrality of a Cumberland location. Cumberland Council (Council) recognises the opportunity to transition its economy into higher order and productive industries and the knowledge-intensive economy. Critically, Council seeks to develop an Innovation Ecosystem and grow a number of key sectors: digital technologies/media, advanced manufacturing, food and beverage manufacturing, creative industries, fashion, allied health, advanced knowledge services and freight and logistics. AEC Group and Mecone comprise a consultant team engaged by Cumberland Council to prepare the Cumberland Employment and Innovation Lands Study. This has been used to inform the development of the Cumberland Employment and Innovation Lands Strategy. The Study aims to promote firmer and innovative employment, business and economic outcomes for Cumberland, responding to a number of important Council aspirations including: • Forming an Innovation eco-system and knowledge-intensive industrial sector. • Fostering growth in priority productive sectors which will also leverage the diversity and skills of migrants. • Ensuring employment lands are sustainable, able to adapt to and accommodate changing needs of industry and business. CUMBERLAND BASELINE POSITION Existing Employment Structure Cumberland employed almost 70,000 workers with more than 20% of those employed in manufacturing. 10.9% of employees were employed in transport, postal & warehousing while 10.5% were employed in retail trade. The structure of Cumberland’s local economy is characterised by industrial activity (manufacturing and transport, postal & warehousing) and retail activity (with a number of centres and businesses along Parramatta Road). Overall employment growth in Cumberland has been moderate, occurring at an average annual rate of 1.3% over the 2006-2011 period. In comparison, employment in Parramatta LGA and Greater Sydney grew by average annual rate of 2.7% each and respectively over the same period. Cumberland’s Competitiveness Cumberland’s employment profile has a distinct industrial specialisation, with manufacturing (20.9%) and transport, postal & warehousing (10.9%) together forming nearly a third (31.8%) of total employment in the LGA. Analysis into key sector specialisation has revealed the following sectors of industry specialisation: • Freight and Logistics is highly represented (18.2% of total employment) and is a sector that of significant value - contributing more in industry value-add (21.5%) and paying more in wages (19.3%) than its share of employment. Cumberland has a distinct competitive advantage for attracting this sector, further characterised by the use of specialist skills, with a comparatively higher rate of specialisation of 50% compared to benchmark areas of Parramatta and Greater Sydney. 3 CUMBERLAND EMPLOYMENT AND INNOVATION LANDS STUDY • Advanced Manufacturing has a considerable employment presence (7.9%) however the use of specialist skills is not particularly notable. Notwithstanding, it is a sector that is of value to Cumberland - contributing more in industry value-add (9.3%) and paying more in wages (9.4%) than its share of employment. • Food and Beverage Manufacturing is a smaller sector, representing 4.3% of total employment. Also a sector of value, it contributing more in industry value-add (5.7%) and paying more in wages (4.7%) than its share of employment. This sector is specialised in Cumberland comparative to the benchmark areas, with more than 40% of employees considered to have specialist skills in the sector. The other key sectors (advanced knowledge services, digital technologies/media, creative industries, allied health and fashion) are not well represented. Analysis indicates that Cumberland detracted from growth in these sectors, suggesting the area may have some competitive disadvantages and challenges that need to be overcome to attract growth in these sectors in the future. Notwithstanding, while not as yet well represented in Cumberland, the sectors of digital technologies/media and advanced knowledge services have the potential to contribute meaningfully given they generate relatively high value-added activity and incomes. Cumberland has had a large role in specialised machinery and food/food product manufacturing. Its employment structure reflects this legacy, denoting Cumberland’s comparative appeal as a destination for these sectors. Cumberland is well connected by the orbital road network (M4, M5 and M7 Motorways) and arterial road network, and is centrally located between Parramatta and Sydney CBDs. The area’s most competitive feature is its accessibility to various distribution catchments across metropolitan Sydney. Future Market Influences Cumberland’s future and the types of business activity are cumulatively influenced by economic trends and factors, but equally driven by business-specific objectives and individual approaches to innovation. Sectoral and Demographic Trends A number of key trends are observed to have influence on how industry requires and utilises land and floorspace. • The high cost of production in Australia drove offshoring activity over the last few decades. In the same vein, businesses are consistently seeking to lower their cost base and drive efficiency and productivity. • The rise of cyber-systems will continue to drive change in the fit-out and configuration of industrial stock with occupiers expected to invest more capital into their warehouses and commit to locations for longer as a result. • Successful retailers have fully-integrated e-commerce supply chains. Delivery speed, range and flexibility are critical, increasing aggregate demand for logistics space and with a strong focus on urban logistics in particular. • The re-shoring of manufacturing may see some previously off-shored specialist manufacturing processes relocated back to Australia, allowing innovation opportunities in the production process to be captured. • The war for talent, evolving working practices and sustainability impacting employment and innovation lands although these are not primary drivers of changing demand. Market and Business Feedback Discussions with various business occupiers, real estate agents and landowners suggest that overall, Cumberland has many strengths. The overall level of satisfaction of business is high, with the centrality of location cited as an overwhelming strength of the employment precincts in Cumberland. Cumberland’s weaknesses are generally a function of its composition and layout. Due to small allotments in certain areas, traffic congestion and ingress/egress is an issue. Buildings in some of the employment precincts are dated and ageing, with some properties in spite of their excellent location at risk of taking longer to lease. 4 CUMBERLAND EMPLOYMENT AND INNOVATION LANDS STUDY Implications for Employment and Innovation lands Key implications for employment and innovation lands in Cumberland include: • Demand for accessible employment and innovation lands close to customers and labour pools will increase concurrent with the rise and growth of the Central City. • The use of higher knowledge workers, increased automation and shorter distribution supply chains will continue to increase as businesses seek to value-add and improve efficiency and productivity. A corollary of this is a rise in demand for well-located and accessible, quality space with high worker amenity. • Logistics will remain the dominant driver of demand with new types of warehouse models emerging. Demand for land is expected to be strong including demand for small-scale facilities around centres and business zones. • Cumberland is well placed to capture emerging demand from re-shored manufacturing facilities due to its proximity to a large labour and consumer market, offering fast speed to market from manufacture to customer. • The fit-out and configuration of warehouses will evolve
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