Anticipating Flat Bush: Part 2: An Economic Profile of Flat Bush Stage 2 Prepared for Manukau City Council - Auckland Council
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Anticipating Flat Bush: Part 2: An Economic Profile of Flat Bush Stage 2 Prepared for Manukau City Council McDermott Consultants September 2010
Contents
Summary
1 Introduction ....................................................................................................................... 1
1.1 Outline of the Report ................................................................................................ 1
2 Flat Bush: A New Town...................................................................................................... 2
2.1 Past Progress ............................................................................................................. 2
2.2 Prospects ................................................................................................................... 3
2.3 The Demographic Profile ........................................................................................... 5
2.3.1 Population ......................................................................................................... 5
2.3.2 Households and Families ................................................................................... 6
2.3.3 Population Profile .............................................................................................. 7
2.3.4 The Labour Force ............................................................................................... 8
3 Estimating Household Expenditure ................................................................................... 9
3.1 Limits to the Analysis ................................................................................................. 9
3.2 Method ...................................................................................................................... 9
3.3 Estimating Retail Needs for Manukau City .............................................................. 10
3.3.1 Household Expenditure ................................................................................... 10
3.3.2 Retail Floorspace ............................................................................................. 11
3.3.3 Projected Retail Floorspace Demand for Manukau City ................................. 12
3.4 The Demand for Retailing Associated with Flat Bush Stage 2 ................................. 13
3.4.1 Sensitivity of the Results ................................................................................. 14
3.4.2 Sources of Uncertainty .................................................................................... 15
4 Retail Supply .................................................................................................................... 16
4.1 The Relationship between Demand and Supply ..................................................... 16
4.2 Retail Typology ........................................................................................................ 16
4.3 Current Supply ......................................................................................................... 19
4.4 Local and Neighbourhood Retailing in Flat Bush..................................................... 21
4.4.1 Provision for Additional Local Retail Capacity ................................................. 22
4.4.2 Local Retail Catchments in Flat Bush ............................................................... 24
4.4.3 The Impact of Oversupply of Local Retailing ................................................... 25
5 Catering for Flat Bush Retail Demand ............................................................................. 26
5.1 Future Floorspace Distribution................................................................................ 26
5.2 Looking Beyond Stage 2 .......................................................................................... 27
5.3 The Prospects for Flat Bush Town Centre ............................................................... 28
5.4 Developing a Strategy for Flat Bush Town centre ................................................... 29
6 Service Activity ................................................................................................................ 31
6.1 Service Employment in Manukau City..................................................................... 31
6.2 Service Employment Projections for Flat Bush ....................................................... 32
6.3 Discussion ................................................................................................................ 34
7 Potential Labour Supply .................................................................................................. 35
7.1 Nature of the Labour Force ..................................................................................... 35
7.2 Location of Employment ......................................................................................... 36
8 Conclusion ....................................................................................................................... 37Tables Table 1 Estimated Population and Households, Flat Bush 2 6 Table 2 Indicative Household Profile, Flat Bush 2 6 Table 3 Household Income Distribution, Flat Bush 2 7 Table 4 Projected Age Distribution, Flat Bush 2 7 Table 5 Projected Distribution of School Age Children, Flat Bush 2 7 Table 6 The Labour Force, Flat Bush 2 8 Table 7 Journey to Work Projections, Flat Bush 2 8 Table 8 Weekly Household Expenditure Profiles by Income Category (2007) 10 Table 9 Retail Spending as a Share of Total Household Expenditure, 2007 11 Table 10 Representative Sales to Floor Area Ratios (Floorspace Multipliers) 12 Table 11 Projected Future Retail Demand, Manukau City 13 Table 12 Estimated Annual Retail Spending and Demand, Flat Bush 2 Households 13 Table 13 Population and Retail Floorspace Estimates 2007 14 Table 14 Store Types and Retail Hierarchy 19 Table 15 Manukau Retail Centres, 2008 19 Table 16 Distance from Flat Bush Town Centre to Competing Retail Centres 21 Table 17 Existing and Planned Local Retail Capacity, Flat Bush 2 Catchment 22 Table 18 Provision for Non-Residential Activity in Residential Zones 23 Table 19 Potential Retail Floorspace Needs Projections, Flat Bush #2 26 Table 20 Additional Retail Floorspace Need, Flat Bush at Full Development 27 Table 21 Flat Bush Catchment Population Projections and Floorspace Implications 29 Table 22 Employment in Manukau Service Activities 31 Table 23 Estimates of Service Employment and Floor Area for Flat Bush 2 33 Table 24 Potential Labour Force Characteristics, Flat Bush 2 36 Figures Figure 1 Population Growth Flat Bush Stage 1 3 Figure 2 Staging of Flat Bush Development 4 Figure 3 Flat Bush Catchment 5 Figure 4 Estimating Future Household Spending 9 Figure 5 Projected Floor Area Supported by Flat Bush 2 Household Spending 14 Figure 6 Distribution of Main Shopping Centres in South Auckland 20 Figure 7 Distribution of Retail Capacity, Proposed Masterplan 21 Figure 8 Walking Catchments, Current and Planned Local Centres 24 Figure 9 Labour Force Characteristics, Dannemora and Flat Bush 2006 35 Appendix 1: Concentration of Service Activities in Auckland Appendix 2: Service Employment and Resident Population, 2009 The information in this report is presented in good faith using the best information available to us at the time of preparation. It is provided on the basis that McDermott Consultants Ltd and its associates are not liable to any person or organisation for any damage or loss which may occur in relation to that person or organisation taking or not taking action (as the case may be) in respect of any statement, information, or advice conveyed within this report.
Summary Purpose This is the second part of a study to inform our understanding of the requirements for housing and amenities in Flat Bush Stage 2 (“Flat Bush 2”). It builds on the previously prepared demographic profile (Part 1). The focus here is on how much retail and service capacity households in Flat Bush Stage 2 will need, and on the nature of employment that an expanded local labour force will require. The Flat Bush Development When completed, Flat Bush will effectively be a new town established under the Auckland Regional Growth Strategy. There are several stages to its development. Stage 1 is well underway. Some 3,860 consents were issued for new dwellings in Point View and Ormiston Census Area Units which encompass Flat Bush Stage 1 between 2000 and 2009. This suggests population growth of around 12,200 (not all of whom would have been in Stage 1). Remaining Stage 1 capacity would accommodate another 10,000 people or thereabouts. Preliminary analysis suggested that another 17,000 people will be accommodated in Stage 2. Following this, a smaller area to the south will be developed as Stage 3, subject to more physical constraints and lower densities. There is also provision for countryside living on larger peripheral lots (Stage 2B). Jointly Stage 3 and countryside living could accommodate another 5,200 people. The result will be a total population exceeding 40,000. Flat Bush Stage 2: Profiling a Future Community An indicative demographic profile for the future Flat Bush 2 community was simulated in the Part 1 report. Following analysis of growing communities nearby, Flat Bush Stage 1 and Dannemora were chosen as the most appropriate antecedents to shape this simulation. The profile suggests that there should be around 4,900 family and 500 single person households at capacity. Perhaps 23% of the projected Flat Bush 2 residents will occupy multi-unit housing when the development is complete (sometime between 2021 and 2031). Families with children are likely to dominate, accounting for almost 70% of the total at completion. Children under 15 years are expected to make up 24% of the population at that time. Around 40% of children (1,690) would be of primary school age, 20% of intermediate age (700), and 40% (1,660) of secondary school age Flat Bush 2 is likely to be marked by above average household ownership and income. Incomes have been assumed to approximate those of Dannemora in 2006 (with a median annual household income of $82,300). The analysis suggests that the area will receive between $316m and $457m (2007 dollars) in total household income a year at capacity. The resident working population is expected to reach around 8,800 people. Many are likely to be self-employed and employing others if Flat Bush 2 follows the Dannemora precedent. The workforce could be larger than this if economic and social circumstances sustain higher than expected participation. Based on current behaviour 65% of journeys to work could be by private car, although an increase in working at home, more casual work, and more use of public transport could reduce this dependence. Urban design measures and local employment favouring alternative modes – walking, cycling – would further commuting by car. An Economic Profile of Flat Bush 2, Summary i
Projecting Retail Demand Retail demand in Manukau City was projected to 2031 using the Statistics New Zealand medium household projections. The demand projection depends on a range of assumptions detailed in this report, and so represents an informed estimate rather than a definitive prediction. Uncertainty means that the results are best used to provide a baseline around which alternative assumptions can be tested and investment risks assessed. However, an intermediate, “preferred” scenario has been produced to inform planning for Flat Bush 2. The Household Expenditure Survey (HES) for 2007 enables profiles of spending to be prepared for different income groups across eleven categories of goods and services. These are used to estimate total spending (omitting non-retail items like mortgages, rent, and insurance). This can then be allocated to different store types after allowing for sales made through non-store outlets. The resulting estimates of spending by store type enable floorspace needs to be projected using representative ratios of sales per square metre. Based on the recent Statistics New Zealand medium household projection, total spending by Manukau households in 2006 was estimated at $5,450m. Of this, 43% ended up in retail stores, supporting around 363,000m2 of floorspace. If there were no changes in spending patterns, this would grow by 144,000m2 by 2021 and 250,000m2 by 2031. Using the profile developed for Flat Bush 2, the 5,530 households projected there would generate around $339m in spending (2007 dollars). This would sustain in excess of 24,000m2 of retail floorspace, accounting for almost 10% of the growth projected for Manukau City from 2006 to 2031. Comparison with a study of regional retail demand by Market Economics (2008) suggests that the figures derived here are on the conservative side. They give rise to an estimated 1.43m2 of retail floorspace per person. This is 27% below Market Economics’ estimate for Manukau City (1.96m2/resident). Applying this higher multiplier to the projected Flat Bush population produces an estimate of over 33,000m2 in retail floorspace demand. This difference highlights the uncertainty involved in projecting retail floorspace ratios. There are also questions over the nature of spending and form of retailing over the next twenty years which have not been taken into the current analysis, but which are likely to change ratios in ways which are difficult to predict. Retail Supply Among other things, the commercial floor area that Flat Bush will sustain depends on how well new retail capacity there will compete with centres elsewhere. Some 267,000m2 of floorspace exists in fourteen retail centers in Manukau and Papakura. Manukau Town Centre and the nearby Supa Centa jointly account for over 77,000m2 just under 6km from the planned Flat Bush Town Centre. Even closer is Botany Town Centre which, with the nearby Hub, provides 44,000m2 of retail space. Sylvia Park is further removed and sits outside Manukau City, but it too will have a significant impact on spending within Manukau and potentially in Flat Bush because of its scale and easy access from the Motorway. The implication is that there could be significant retail “leakage” from Flat Bush as residents direct some of their spending to centres outside the area, reducing the amount available to support local centres. Existing and planned local and neighbourhood retail capacity has been assessed. Some of this is on the fringes of Flat Bush but will meet some of the demand from Flat Bush residents. Other centres are meeting mainly Flat Bush Stage 1 demand. There is already some close to 29,000m2 in or close to the wider Flat Bush catchment, 10,700m2 of which is An Economic Profile of Flat Bush 2, Summary ii
likely to cater for Flat Bush #2 residents and 15,500m2 of which might cater for demand from
the entire Flat Bush project (Stages 1 to 3).
Flat Bush Town Centre
Despite the uncertainty of the demand projections, Flat Bush Town Centre will be given
impetus by the Stage 2 development, although it will not depend on it alone.
To assess this, high and low demand scenarios have been developed. The low scenario
adopts the low ratio of floorspace per head (1.43m2) and a relatively high level of sales
leakage (40%). The high scenario adopts the higher estimate of floorspace per head
(1.96m2) and a lower estimate of leakage (35%). This analysis suggests that Flat Bush 2 will
support between 11,700m2 and 17,300m2 of retail floorspace at the Town Centre.
The mid-point is recommended as the basis for subsequent planning. This suggests total
demand for 24,300m2 of retail floorspace will be supported by residents when Flat Bush 2 is
completed. This in turn indicates around 18,000m2 will be supported locally, with perhaps
14,400m2 in the Flat Bush Town Centre and the balance in neighbourhood and local centres.
The range described by the low and high scenarios provides a basis for assessing investment
options on the part of the centre developers. For example, the lower estimate indicates the
level of risks around the development, while the higher scenario an aspirational figure
towards which design, development, and promotion might be directed.
Taking a longer-term perspective, spending in the Town Centre by residents of Flat Bush
stages 1 to 4 on completion could sustain between 28,000m2 and 42,000m2 of retail space,
with a central estimate of 35,000m2. The implication is that the Town Centre can be
initiated as part of Flat Bush 2, but perhaps subject to staging to limit the short- to medium-
term risk of over-supply.
The Role of Local Shops
The role and extent of other retail facilities in Flat Bush contribute to the uncertainty facing
the Town Centre. Neighbourhood centres are planned for Ormiston Rd and Murphy’s Park.
The District Plan provides for precinct-based centres as a discretionary use under the
residential zone. These could erode some of the spending that might otherwise help sustain
the town centre. Over-capacity among lower order centres may see low rentals and high
levels of passing traffic attract discretionary and comparison goods retailers.
Oversupply of local capacity needs to be addressed to avoid the resulting increase in traffic
disruption from more car-dependent strip shops and undermining the amenity and security
of residential neighbourhhoods through the proliferation of vacant or low margin premises.
Given the benefits associated with the ability of an accessible, diverse town centre to meet a
wide range of the needs of the Flat Bush community, attention may need to be given to
limiting the potentially adverse impact of surplus capacity in lower order centres. The
conditions under which retail capacity is consented in residential areas may need revisiting
to avoid excessive ad hoc capacity undermining the Centre’s potential.
Development Prospects for Flat Bush Town Centre
The uncertainties around retail projections and the possibility of over-supply suggest several
strategic steps need to be taken to assure that the Town Centre can fulfill its role as “the
focal point for the rapidly developing community and will serve a diverse range of needs for
the 40,000 residents anticipated in the Flat Bush area”.
• The final design, capacity and land use mix of Flat Bush Town Centre will depend on the
extent to which it captures demand from a primary catchment which extends beyond
An Economic Profile of Flat Bush 2, Summary iiiFlat Bush 2. It ideally will be designed and staged with a view to full development of the
Flat Bush and not just Stage 2, and to attract custom from a wider secondary catchment;
• The construction of neighbourhood centres might be staged to align with the long term
development programme, with two at most associated with Flat Bush Stage 2 and
subject to staging to reflect the different phases of development within Stage 2;
• The rules under which discretionary retailing might be consented in residential areas
need to be reviewed to protect both the amenity of those areas and the capacity of the
Town Centre to service the wider community;
• Substantial non-retail activity should be designed into and around Flat Bush Town
Centre to raise its profile and to make the most of the site’s development potential.
Service Employment
The wider services required by the Flat Bush population will support local and non-local
employment in a range of sectors over and above retailing. Using ratios of employees per
thousand residents in different sectors, it is possible to estimate the new service jobs that
might be associated with Flat Bush. Based on their relative concentration within Manukau
City it is also possible to indicate how many of these jobs will be located locally. These
employment estimates have been converted into approximate floor area requirements using
representative ratios of floorspace per employee for each sector.
On this basis, the Flat Bush 2 community at capacity will generate demand for around 4,200
service jobs requiring around 110,000m2 of floor space (including retailing). The
composition of this demand and the spatial characteristics of different sectors suggest that
perhaps 2,500 jobs could to be supplied locally. Some 650 of these jobs would be in
retailing, requiring an estimated 24,300m2 of floorspace. This corresponds with the analysis
of spending demand.
If retail employment and a further 650 jobs estimated for the education and residential
homecare sectors are omitted (because they are dispersed through residential areas) there
is a balance of 1,200 jobs (in round figures) are likely to be located in commercial areas
within Flat Bush. Based on these figures, the projected floorspace requirement to meet
local demand for services is just over 30,000m2. If it is then assumed that one third of this is
catered for in neighbourhood centres and residential areas (including home-based work),
around 20,000m2 of office and community floorspace would be required at Flat Bush Town
Centre to meet local demand for services. In practice, an attractive town centre could
capture more than two thirds of local service jobs.
Labour Supply and Demand
The local labour force growth in Flat Bush at capacity will be around 8,800. Perhaps one
third, or close to 3,000 people, will be employed in “Group 1” activities (industry, transport
and storage, utilities and construction). These align broadly with trades, machinery
operation, driving, and laboring, although Group 1 activities also employ sales, clerical, and
management staff.
Within the region, Group 1 employment is increasingly focused on Manukau City, with
significant concentrations around East Tamaki (5km distant from the Flat Bush Town
Centre), Wiri (7km), and Mangere (17km). The implication is that job opportunities in these
sectors will be reasonably accessible to Flat Bush residents.
Many Flat Bush residents may also be employed in nearby commercial centres, especially
Manukau Central. However, there will be community and environmental benefits if the
An Economic Profile of Flat Bush 2, Summary ivnumber employed locally could be lifted above the 2,500 projected here (bearing in mind that some jobs located in Flat Bush will be filled by people residing elsewhere). Substantial office and service-based capacity in and around the town centre could increase the level of local employment. Hence, the 20,000m2 floorspace identified with the needs of the local community might be treated as a minimum, to allow service and office functions to locate and developing in Flat Bush to serve a wider market. Conclusion This report contributes to the information that can be brought to bear in planning for Flat Bush. The picture it paints is one of a prosperous community, with relatively high household incomes and spending, high participation rates, and diverse skills and vocations. The community associated with Flat Bush Stage 2 will act as a catalyst for developing the Town Centre and generate substantial core demand for goods and services there. However, the scope, scale, and viability of the centre will be determined by the full development of Flat Bush and by the extent to which the centre can compete with the substantial retail capacity already established within – and helping to define – its secondary catchment. The analysis here suggests that Flat Bush will also be an important commuting community within Manukau City, ideally located to respond to labour demand from commercial and industrial centres. At the same time, maximising local employment capacity will reduce commuting demands. An indicative resident labour force of 8,800 when Flat Bush 2 reaches capacity would under the assumptions in this report be matched by 2,500 local jobs. The successful long-term development of Flat Bush Centre could lift this share and reduce commuting demand out of the area by catering for activities that serve a wider area, thereby increasing local employment opportunities. An Economic Profile of Flat Bush 2, Summary v
1 Introduction This is the second part of a study to inform our understanding of requirements for housing and amenities in Flat Bush Stage 2 (“Flat Bush 2”). It builds on a demographic profile prepared as Part 1. The focus here is mainly on demand for retail space associated with household growth, and on how much retail and service capacity it might sustain within the Flat Bush 2 area. Consideration is also given to the potential for local employment to cater for the resident labour force. 1.1 Outline of the Report This report analyses the potential impact of the expanded community on the demand for and supply of retail and other services in and around Flat Bush. The study builds on the indicative community profile developed in Part 1 for population and household projections. It adopts the household income distribution projected there and, drawing on representative figures from the Household Expenditure Survey (HES), builds a profile of potential community spending at full development. This profile is converted into an estimate of floorspace requirements associated with different categories of retail activity using representative sales per square metre of store area. Section 2 describes how Flat Bush 2 development fits in with the wider Flat Bush project. It summarises the findings of the Part 1 report describing the likely demographic profile of Flat Bush 2. Section 3 draws on the Household Expenditure Survey (HES) to generate a spending profile for future residents that reflects expectations about the numbers of households falling into different income brackets. The result is related to a projection of spending by all Manukau households. This data is used to estimate total retail demand, first separating non-retail demand from the HES figures. The resulting estimate of current and future retail expenditure is then allocated to store types according to the distribution recorded in the 2007 HES, adjusted for retail spending that does not take place in retail premises. Some consideration has been given to the uncertainties surrounding the resulting projection. The figures generated are proposed as a reasonable if conservative starting point. Section 4 considers retail supply, for Manukau as a whole, across major centres, and within the local area. The competitive and local environment for Flat Bush Town Centre is briefly described. The analysis is not intended to be a feasibility study for a new centre, but rather considers how much floorspace might be needed locally to meet demand from the residents associated with Flat Bush 2. Section 5 explores the prospects for developing non-retail commercial activity to meet the needs of local households and to provide local employment. It quantifies the outlook associated with Flat Bush 2 using generalised multipliers of demand (measured as employment numbers) relative to population. This gives rise to an estimate of service jobs that might be located in the area and the associated floorspace requirements. Consideration of the potential mix and split of activities helps define possible activity profiles for Flat Bush Town Centre and local neighbourhood centers. The indicative projection of retail and service employment in the Flat Bush Stage 2 commercial areas is compared with projected resident labour force in Section 6. This identifies a significant imbalance between local labour force growth (around 8,800 people according to the core projection) and potential local labour demand of around 2,250 jobs. The location of Flat Bush relative to industrial and commercial centres in Manukau mean that residents are potentially well-placed to find work elsewhere in the city. However, the more activity and employment that can be located – and localised – at the town centre in particular, the more efficient the commuting patterns arising from the development will be. An Economic Profile of Flat Bush 2 Page 1 McDermott Consultants
2 Flat Bush: A New Town
This section contains key results from the Part 1 report which are the basis of the current analysis.
2.1 Past Progress
When completed, Flat Bush will be a major community – effectively a new town – established within
the existing urban fabric under the provisions of the Auckland Regional Growth Strategy (Auckland
Regional Council, 1999). The Strategy called for the bulk of Auckland’s growth to be accommodated
within the existing metropolitan area. It proposed that between 1996 and 2050 Manukau should
absorb 22% of the region’s projected growth, or 430,000 people. Flat Bush was identified as a future
greenfield growth area in the Strategy’s Growth Concept (pp. 34-35).
This was confirmed in the Southern Sector Agreement (2001), a Memorandum of Understanding
between Manukau City, Papakura and Franklin District councils and the Auckland Regional Council
(ARC). As a greenfield site Flat Bush was committed to include residential, mixed use, employment,
community and public open spaces, and to accommodate “no fewer than 40,000 people”. An
indicative concept suggested there would be 43,700 residents by 2020 (p. 10).
Consequently, the Metropolitan Urban Limit was extended to encompass this area (Variation 13 to
the Manukau District Plan; Chapter 17, Operative District Plan).
In 2006 the Manukau City Council published the Flat Bush Community Plan, prepared in association
with Ngai Tai ki Umupia and Ngati Paoa as Manua Whenua, with local consultation with a wide range
of individuals and groups led by the Botany Community Board. This was developed:
As a way for residents to express their aspirations for living in Flat Bush and become directly involved
in developing their community” (p. 5).
It advanced a profile suggesting that the community of 40,000 will (by 2020):
• Have a “vibrant mix of ethnicities and cultures” – half to two thirds European, over a third from
various Asian cultures, and a smaller proportion of Mãori, Pacific Peoples and others; with a
third born outside new Zealand;
• Be “living in a range of households”, with one half to a third in the next ten years couples with
children;
• “be growing up”, with an increasing number of children;
• “have a range of spiritual needs”, with around half affiliating with Christianity and up to 25%
with other religions;
• “have a significant number of disabled people”, as many as 8,000 covering a full range of
impairments;
• “have diverse employment needs”, with 42% to 52& working elsewhere in Manukau and 25% to
42% working north of the City (Auckland, Waitakere and North Shore).
Flat Bush Stage 1 lies mainly within three Census Area Units (CAU), Point View, Ormiston, and
Donegal Park. Population growth in these three areas between the 2001 and 2006 Census was
10,000 people, with 6,960 in Point View, 2,530 Donegal Park, and 520 in Ormiston (Figure 1). In fact,
Donegal Park was already growing strongly in its own right, peaking in 2002, and is best omitted
from consideration of Flat Bush development. The majority, if not all, growth in the other two units
is attributable to Flat Bush, however.
An Economic Profile of Flat Bush 2 Page 2
McDermott ConsultantsFigure 1 Population Growth Flat Bush Stage 1
14,000
12,000
10,000
Resident population
8,000
6,000
4,000
2,000
0
Point View Ormiston Donegal Park
1996 2001 2006
Source: Census of Population, 2001 and 2006
Some 3,860 consents were issued for new dwellings in Point View and Ormiston between 2000 and
2009 inclusive (February years); 1,500 have been issued since 2005 with the associated new houses
and population post-dating the April 2006 Census figures. If 90% dwellings were completed and
occupied at an average occupancy of 3.5 persons per household (based on occupancy figures from
the 2006 Census), population growth attributable to new dwellings over the decade was around
12,200 (conservatively). As many as 4,700 of these people moved in after the 2006 Census.
2.2 Prospects
Flat Bush 2 is building on an established but young and rapidly growing community in which the
commitment to a 20ha town centre has already been made.
There are several stages to Flat Bush development (Figure 2). Stage 1 is well underway. The
planned town centre on Ormiston Rd will have capacity for further significant numbers, with
residents dwelling in apartment-style homes. Following Stage 2, a smaller area to the south will be
developed as Stage 3, subject to more constraints and therefore lower densities than Stage 2.
Finally, there is provision for countryside living on larger peripheral lots (Stage 2B), providing a buffer
and reflecting the local topography.
A preliminary analysis of capacity suggested over 16,000 of the target of 40,000 residents would be
accommodated in Stage 2, based on an average occupancy of 2.9 persons/household. Some 37% of
this total (4,400 persons) might be housed in multi-unit dwellings.
As an illustration of the uncertainty facing any projection, the way in which densities differ by
housing type will influence the final outcome. If, for example, occupancy figure in apartments is 2.0
persons per household and in attached housing (terrace dwellings) is 2.5, total capacity will be
reduced by 7%, to 15,100.
An Economic Profile of Flat Bush 2 Page 3
McDermott ConsultantsFigure 2 Staging of Flat Bush Development An Economic Profile of Flat Bush 2 Page 4 McDermott Consultants
2.3 The Demographic Profile
An indicative demographic profile for the future community was simulated using measures and
ratios derived from examining growing communities nearby (Figure 3).
The precedent areas were Flat Bush Stage 1, Donegal Park as a separate entity, Dannemora, the area
around and including Totara Heights, and Randwick Park. Flat Bush Stage 1 and Dannemora
provided the demographic data considered most likely to foreshadow the character of Flat Bush 2.
Additional information on potential growth rates, future age profiles, and household occupancy was
derived from Statistics New Zealand local area and Manukau City population projections. Some
results of this analysis, described in full in the Stage 1 report, are summarised below.
Figure 3 Flat Bush Catchment
Source: Manukau City Council, 2010
2.3.1 Population
Indicative population figures were estimated by applying different household occupancies to the
completion approximating that projected for
main dwelling types, but with the overall occupancy on completion
Manukau City in 2031 by Statistics New Zealand (3.0 persons/household). The figures have been
divided into two periods, with the majority of households (69%) assumed to be resident within the
first ten years of development, and the total for Flat Bush 2 achieved some time after that but most
likely before 2031.
An Economic Profile of Flat Bush 2 Page 5
McDermott ConsultantsThe result is a total population of close to 17,000 residents at full development (12,280 in the first
ten years) with perhaps 23% (3,850 persons) living in multi-unit housing by 2031 (Table 1).
Table 1 Estimated Population and Households, Flat Bush 2
Capacity Detached Terraces Apartments TOTAL
% First Ten Years 75% 55% 50% 69%
Households
After ten years 3,030 500 310 3,840
At capacity 4,040 900 610 5,550
Persons/Household
After ten years 3.3 3.0 2.5 3.2
At capacity 3.3 2.8 2.3 3.1
Population
After ten years 10,000 1,500 780 12,280
At capacity 13,130 2,480 1,370 16,980
Source: Part 1 Report
2.3.2 Households and Families
The indicative population figures provide a basis for simulating a profile based on household and
demographic characteristics representative of recent growth in the area. This process suggests that
there could be around 4,900 family households when the development is at capacity and 500 single
person households (Table 2).
Table 2 Indicative Household Profile, Flat Bush 2
Single
Households Families Other Total
Person
After ten years 91% 6% 4% 100%
At capacity 88% 9% 3% 100%
After ten years 3,480 210 140 3,830
At capacity 4,900 500 150 5,550
Single Parent
Families Couple Family Total
Family
After ten years 28% 60% 12% 100%
At capacity 31% 57% 12% 100%
After ten years 970 2,100 410 3,480
At capacity 1,500 2,800 610 4,910
Source: Part 1 Report
Families with children are likely to dominate at completion, accounting for 69% of all families. This
compares with 71% across the precedent areas in 2006, 73% in the rest of Manukau City and 63%
across the rest of Auckland. A relatively high 74% of households are projected to own or partially
own their homes (including ownership through family trusts), or approximately 4,100 of the total.
A lower share of home ownership – or a higher level of renting – is associated with a more diverse
community. It is also a function of declining housing affordability with investors coming to play a
much more important role in housing provision over the past decade. The likely role of investors
and low income housing is an outstanding question for Flat Bush. However, the history of
Dannemora and Flat Bush Stage 1 suggest Flat Bush Stage 2 will feature above average household
ownership and income.
Household incomes are assumed to approximate those of Dannemora in 2006 in real terms (with a
median annual household income of $82,300). This was significantly above the income profile for
Manukau City ($62,300) and Donegal Park ($68,400), but below Flat Bush ($92,700) and Totara
Heights ($86,300).
Two estimates were made of total future household income using this data (Table 3). The first
simply multiplied median income by projected household numbers. The second involved taking
An Economic Profile of Flat Bush 2 Page 6
McDermott Consultantseach income category and multiplying the number of households by the income mid-point. In the
case of the first category, under $20,000, it was assumed that all households received $20,000.
Under the last category, over $100,000, it was assumed that the average household income was
$150,000. It was assumed that the not stated category had much the same income profile as the
balance of households and was multiplied through by the median.
The former estimate led to a projection of $316m gross income per year after ten years of
development and the latter to $311m (1.6% lower). The equivalent figures at full capacity were
$457m and $448m (2% lower). The convergence of these figures suggests that the income profile in
Table 3 is a reasonable if conservative basis for profiling future spending.
Table 3 Household Income Distribution, Flat Bush 2
Household $20,000 $20,001 - $30,001 - $50,001 - $70,001 - $100,001 or Not
Total
Income or Less $30,000 $50,000 $70,000 $100,000 More Stated
Share (As stated in Census)
After ten years 9% 6% 11% 11% 15% 33% 16% 100%
At capacity 9% 6% 11% 11% 15% 33% 16% 100%
Adjusted (“Not stated” distributed according to “stated”)
After ten years 10% 7% 14% 13% 17% 39% NA 100%
At capacity 10% 7% 14% 13% 17% 39% NA 100%
Projected Households by Income Category
After ten years 390 250 520 510 670 1,500 NA 3,840
At capacity 560 370 750 730 960 2,170 NA 5,540
2.3.3 Population Profile
The projected age structure will influence the demand for amenities. The share of children is
expected to be around 24% (Table 4).
Table 4 Projected Age Distribution, Flat Bush 2
Age profile 0–14 15–39 40–64 65+ Total
After ten years 26% 37% 32% 5% 100%
At capacity 24% 33% 36% 7% 100%
After ten years 3,190 4,570 3,930 590 12,280
At capacity 4,100 5,540 6,140 1,210 16,990
This is a key group for facilities planning, including educational and recreational amenities. It has
been divided into five year cohorts for the present report, applying the shares in Flat Bush Stage 1
for the ten year benchmark and for Dannemora at completion (Table 5). Projections are published
by Statistics NZ for limited cohort groups, so shares have been estimated from within the 0-14 year
projection for the first three groups and the 15-39 year projection for the last group (15-19 years).
The results suggest substantial growth in primary and particularly secondary school pupils and young
adults in senior college, entering tertiary education, or entering the work force. On the basis of one
staff member employed for every 15 pupils (part-time and full-time; teaching, administrative and
maintenance), this would generate around 360 jobs at completion, excluding pre-school teaching.
Table 5 Projected Distribution of School Age Children, Flat Bush 2
School Age 0-4 5-9 10-14 15-19* TOTAL
After ten years 930 1,010 1,250 880 4,070
At capacity 1,010 1,340 1,750 1,290 5,390
If it is assumed that within each age cohort individual years are evenly distributed (i.e., each single
year comprises 20% of the five year group) and that 50% of 18 year olds remain at school, it is
An Economic Profile of Flat Bush 2 Page 7
McDermott Consultantspossible to suggest a distribution across school years. At capacity around 40% would be of primary
school age, 20% of intermediate/junior college age, and 40% of secondary school age:
• Years 1 – 6 1,690
• Years 7 & 8 700
• Years 9 to 15 1,660
The Ministry of Education has undertaken its own planning for schooling in the area. The profile
here accounts for around one half of the Ministry’s expectation of 8,500 children living in the total
Flat Bush development (Stages 1 to 3) by 2021.
2.3.4 The Labour Force
Projecting the labour force is made difficult by the expectation that participation and labour force
will decline with population ageing towards the end of the development cycle. Flat Bush Stage 1 was
chosen as the basis for labour force assumptions made for Flat Bush 2 initially, because it had the
lowest participation rate of the selected areas. However, an adjustment was made reduce the figure
further at capacity, to the 2006 level for Manukau (68%, Table 6), to allow for falling participation.
Table 6 The Labour Force, Flat Bush 2
Participation
Unemployed Part-Time Employer
Rate
After ten years 73% 5% 17% 23%
At capacity 68% 5% 19% 23%
After ten years 6,600 300 1,110 1,540
At capacity 8,770 400 1,650 2,050
The result was a labour supply estimate of around 8,800 persons. A significant share is expected to
be self employed and employing others based on the example of Dannemora.
However, participation may not fall if, for example, economic progress slows while household
maintain income expectations; if a longer active working life offsets the effects of an ageing
workforce; or if uncertainty over the adequacy and timing of superannuation extends working life. If
participation were to remain at 73%, for example, the labour force would reach 9,410.
A key issue in planning for labour force growth is distribution relative to employment opportunities,
and how commuters will access jobs. Applying journey to work figures for Dannemora to the first
ten years reflects the current dependence on driving and limited access to public transport (Table 7).
Table 7 Journey to Work Projections, Flat Bush 2
Did Not Public
Journey to Work At Home Driver Passenger Other Total
Go Transport
After ten years 6% 10% 73% 3% 2% 6% 100%
At capacity 7% 10% 61% 4% 6% 12% 100%
After ten years 470 640 4,060 280 400 760 6,610
At capacity 620 850 5,390 370 530 1,010 8,770
However, in expectation of an increase in working at home and casual work, more use of public
transport, and a reduction in dependence on private vehicles, the-capacity projection adopts the
“rest of Auckland” 2006 profile. This suggests that use of public transport would increase
substantially but the share of the workforce using it would remain small. Working at home is likely
to make more significant inroads into dependence on private vehicle-based commuting. Growth in
other modes (bicycle, foot) would be consistent with an increased propensity to work locally
An Economic Profile of Flat Bush 2 Page 8
McDermott Consultants3 Estimating Household Expenditure
3.1 Limits to the Analysis
This section outlines how future household expenditure associated with the Flat Bush 2 profile has
been estimated and used, in turn, to generate estimates of retail floor space requirements. The
focus is on the spending generated locally, and what local retailing that might support.
The analysis does not identify the total area of retailing and consumer services that might be located
in Flat Bush 2. This will be influenced not just by local spending, but will be influenced by spending
drawn from a wider catchment, from elsewhere in Auckland, and from visitors from elsewhere in
New Zealand or overseas. Spending generated by local business should also add to the floor area
that can be sustained.
3.2 Method
An increase in local spending is primarily a function of increased household numbers, with the
precise outcome moderated by the income and spending profiles of those households. While higher
income households will have more to spend, more of that spending will be discretionary so the mix
of that spending will be different from the mix for lower income households.
The first step in assessing future spending is to project household numbers according to expected
incomes (Step 1, Figure 4). This was done in the Part 1 report (see Table 3, above). This distribution
is then be used to generate a spending profile by category of demand (Step 2), based on the
Statistics New Zealand Household Expenditure Survey (HES). The HES also provides information at
the national level on the distribution of spending within broad consumption categories which
enables spending that does not take place in retail stores to be deducted (Step 3). This includes such
things as mortgage payments, bank interest, energy and communications charges, and insurance.
Figure 4 Estimating Future Household Spending
1. Project 2. Project 3. Project Retail 4. Project Retail
Households by Household Demand by Floorspace by
Income Category Spending by Expenditure Store Category
•Apply Census Based Expenditure category •Distribute spending by
household income Category •Identify and deduct category to store type
categories to projected non-retail demand from Household
household numbers •Align Census and Expenditure Survey
Expenditure Survey from each expenditure
•Part 1 Report household income category •Deduct non-store-
based expenditure
categories
•Apply Representative
•Estimate household
spending profile by Floor Area Ratios
income and
expenditure category
The HES also cross-tabulates expenditure category by store type nationally. This can be used to
allocate household retail demand to store types, first deducting demand met through non-retail
outlets, including direct and commission selling (Step 4). Turnover by store type generated in this
way provides a basis for estimating total retail area required based on sales per square metre ratios.
An Economic Profile of Flat Bush 2 Page 9
McDermott Consultants3.3 Estimating Retail Needs for Manukau City
This section describes how the methodology described above has been applied to Manukau City.
The results help to place retail demand projected for Flat Bush in its wider urban context.
3.3.1 Household Expenditure
The basis for this projection is the Statistics New Zealand medium household projection for
Manukau. It is assumed that the distribution of households by income category in Manukau remains
constant over the projection period (to 2031). The HES, last published for the year ending June
2007, presents profiles of household spending by ten income groups and eleven categories of goods
and services. However, the division of incomes differs from the six income categories used in the
Census. Reconciliation was therefore undertaken to assign HES spending to Census-based income
categories, aligning the Census divisions with the nearest equivalent HES income division or
divisions. This provides a weekly spending profile across Census-based income categories (Table 8).
Table 8 Weekly Household Expenditure Profiles by Income Category (2007)
Annual Household Income Categories (2007)
$20,000 $20,001- $30,001- $50,001- $70,001 - $100,001
or Less $30,000 $50,000 $70,000 $100,000 or More
Food 83 92 131 151 190 256
Alcoholic beverages, tobacco 12 14 22 30 30 48
Household Spending Category (Household Expenditure Survey
Clothing & footwear 10 11 24 32 39 69
Housing & household utilities 132 140 196 209 273 346
Household contents & services 23 27 37 52 61 92
Health 13 17 17 16 24 43
Transport 53 64 113 129 168 246
Communication 21 20 27 33 35 48
Recreation & culture 45 49 69 101 110 190
Education 0 0 0 0 0 0
Misc. goods & Services 41 65 76 85 104 167
Other 19 24 61 115 126 210
Sum 450 520 770 950 1,160 1,720
Food 18% 18% 17% 16% 16% 15%
Alcoholic beverages, tobacco 3% 3% 3% 3% 3% 3%
Clothing & footwear 2% 2% 3% 3% 3% 4%
Housing & household utilities 29% 27% 25% 22% 24% 20%
Household contents & services 5% 5% 5% 6% 5% 5%
Health 3% 3% 2% 2% 2% 2%
Transport 12% 12% 15% 14% 14% 14%
Communication 5% 4% 4% 3% 3% 3%
Recreation & culture 10% 9% 9% 11% 10% 11%
Education 0% 0% 0% 0% 0% 0%
Misc. goods & Services 9% 12% 10% 9% 9% 10%
Other 4% 5% 8% 12% 11% 12%
Sum 100% 100% 100% 100% 100% 100%
Source: Based on Household Expenditure Survey, 2007; and census of population Household incomes, 2006
Data for two categories of household spending has been suppressed by Statistics New Zealand (on
data quality grounds), education, presumably leading to a slight underestimate, and trade-ins and
refunds, presumably leading to a slight overestimate.
The profiles illustrate a shift in weekly spending and changes in the composition of spending as
incomes increase. Spending among the lowest income households is not much more than a quarter
of the spending of the highest income households. The share of spending on food and housing
(ownership, rental, maintenance, rates, etc) diminishes as incomes increase, while spending on
miscellaneous goods and services (e.g., personal care, insurance, and personal effects), and on other
services (including savings, interest payments and overseas expenses) increases.
An Economic Profile of Flat Bush 2 Page 10
McDermott ConsultantsThere are other significant influences on household spending, although the range across income
categories is the most significant. Average spending among Auckland households, for example, is 9%
higher than for New Zealand as a whole. One person households (the lowest spending group on this
measure) spend on average 37% of what four person households spend. This suggest that the
spending estimates developed here for Flat Bush could be weighted up to reflect the Auckland
increment and to the extent that the demographic profile leans towards larger, family households
compared with the rest of Auckland.
Expenditure is described in 2007 dollars. It is also assumed that the spending profile (purchases by
category of goods and services) within each income band remains constant. This provides a basis for
comparisons over time and between places based on changes associated with population growth.
At the same time, the assumption highlights our lack of knowledge about such things as long term
compositional and behavioural changes in consumption and in retail channels and productivity.
Some commentators project a blanket rate of increase in spending per household to deal with
possible changes in spending patterns, usually based on past trends. Given that the historical period
from which this data is extrapolated was accompanied by what may prove unsustainable growth in
consumption, much based on credit and a rundown of savings (or equity), and that the 2007 data
reveals a change in the structure of spending as incomes increases (Table 8), there are no obvious
grounds for projecting real growth in spending per household here. This means the figures derived
will be more conservative than comparative analyses.
At the national level, the HES divides the twelve main categories (Table 8) into a number of sub-
categories which enable non-retail demand to be identified (Table 9). The low levels of retail
spending associated with housing, health, miscellaneous goods (including insurance, credit, and
vocational services), other expenditure (e.g., interest payments, fines and donations), and recreation
and culture (which includes travel and accommodation, among other things) mean that the overall
spend in retailing was just over half of total household spending in 2007.
Table 9 Retail Spending as a Share of Total Household Expenditure, 2007
Food 100%
Alcoholic beverages, tobacco and illicit drugs 100%
Clothing and footwear 100%
Housing and household utilities * 15%
Household contents and services 95%
Health 32%
Transport 84%
Communication 7%
Recreation and culture 57%
Miscellaneous goods and services 22%
Other expenditure 0%
Total 51%
Source: Estimated from Household Expenditure Survey, 2007
3.3.2 Retail Floorspace
The HES also reports on the shares of spending within each category directed towards different
store types. Spending in “non-store retailing”, including internet-based purchases, commission
purchases, or home based sales, can be deducted prior to estimating floor space requirements.
The HES also includes a “Residual Category” which includes unidentifiable responses, responses that
fall outside the scope of the survey, and some service expenditure. It tends to be largest for those
categories of spending with a relatively small share of retail within them (e.g., housing and health).
For present purposes, this category was adjusted to reflect the retail spending shares identified with
each expenditure category (Table 9) as the best means of providing for some expenditure within it.
An Economic Profile of Flat Bush 2 Page 11
McDermott ConsultantsConverting retail spending estimates into the demand for retail floorspace is based on ratios of the
typical value of sales per square metre to the sales figures (floorspace ratios) associated with
different store types. Within store categories floorspace multipliers also vary between traditional
outlets and large format stores. The latter differentiation is not made here on the basis that the
floorspace ratios used reflect the current distribution across them.
Multipliers will also vary according to situation. Neighbourhood shops generally achieve lower levels
of sales per square metre --- and pay lower rents -- than the equivalent shop in a large shopping
centre drawing customers from a wider area.
A review of a number of sources, including company and planning reports from the US and UK,
Australia, and New Zealand, together with some confirmation from current operators indicate
reasonable consistency in the order of turnover by shop type. The representative figures adopted as
a result of this review are presented in Table 10 . Clearly significant variations as a result of changes
in the character of retailing in some categories would lead to different estimates capacity required.
Table 10 Representative Sales to Floor Area Ratios (Floorspace Multipliers)
2
Manukau $/m
Food retailing 10,000
Clothing, footwear& accessories 5,000
Furniture, floor coverings, soft furnishings 3,500
Electrical and electronic goods 8,000
Hardware, building, garden supplies 5,000
Pharmaceutical and personal care 8,000
Department stores 4,000
Recreational goods 4,000
Motor vehicles & parts 4,000
Fuel 10,000
Other goods 5,000
Food & beverages 5,000
Wholesaling 3,500
Residual categories 5,000
Source: Various
Supermarkets tend to lead the way in intensity of turnover, followed by specialty and personal
goods stores such as jewelers and pharmacies, with apparel and similar stores occupying the middle
ground. Bulky goods stores and discount department stores generally achieve lower turnover per
square metre which is why they also tend to locate off-centre, where rentals are lower.
3.3.3 Projected Retail Floorspace Demand for Manukau City
The application of the method described to the medium household projections for Manukau City
suggests that there was $5,450m in total household spending in 2006. Some 51% was directed
towards retailing, and 43% ended up in retail stores. Based on the distribution of this spending
across retail categories and the floorspace ratios associated with each, demand for retail space is
estimated to have been 362,800m2 (Table 9), or around 3.6m2 per household.
It is noted that these figures are significantly lower than those reported for 2007 by Market
Economics (2008). This is likely to reflect discounting of much of the residual store category in the
current exercise, the deduction of sales through non-retail outlets, differences in assumed sales to
floorspace ratios, and the provision made for non-retail spending, among other things. The Market
Economics analysis also provides for retail sending by businesses, and estimates tourism and visitor
contributions. It assumes that spending per household will increase in real terms over the projection
period so that the difference between the Market Economics estimate of retail floorspace required
and the estimate developed here increases over time.
An Economic Profile of Flat Bush 2 Page 12
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