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Economic Expert Witness Statement - Amendment C124 to the Mitchell Planning Scheme and combined Planning Permit Application PLP 203/17 Justin ...
Economic Expert Witness
Statement
Amendment C124 to the Mitchell Planning Scheme and combined Planning Permit
Application PLP 203/17

Justin Ganly

Prepared for Lascorp Development Group (Aust) Pty Ltd
21 February 2019
Economic Expert Witness Statement - Amendment C124 to the Mitchell Planning Scheme and combined Planning Permit Application PLP 203/17 Justin ...
Deep End Services
Deep End Services is an economic research and property consulting
firm based in Melbourne. It provides a range of services to local and
international retailers, property owners and developers including due
diligence and market scoping studies, store benchmarking and
network planning, site analysis and sales forecasting, market
assessments for a variety of land uses, and highest and best use
studies.

Contact
Deep End Services Pty Ltd
Suite 304
9-11 Claremont Street
South Yarra VIC 3141

T +61 3 8825 5888
F +61 3 9826 5331
deependservices.com.au
Enquiries about this report should be directed to:
Justin Ganly
Managing Director
justin.ganly@deependservices.com.au
Document Name
Lascorp report - Mitchell Am C124 & Permit Application PLP 203-17 -
Economic expert witness statement - Justin Ganly - 21 Feb 19

Disclaimer
This report has been prepared by Deep End Services Pty Ltd solely for use by the party to whom it is
addressed and by Planning Panels Victoria. Accordingly, any changes to this report will only be
notified to those parties. Deep End Services Pty Ltd, its employees and agents accept no responsibility
or liability for any loss or damage which may arise from the use or reliance on this report or any
information contained therein by any other party and gives no guarantees or warranties as to the
accuracy or completeness of the information contained in this report where this has been provided by
another party.

This report contains forecasts of future events that are based on numerous sources of information as
referenced in the text and supporting material. It is not always possible to verify that this information is
accurate or complete. It should be noted that information inputs and the factors influencing the
findings in this report may change hence Deep End Services Pty Ltd cannot accept responsibility for
reliance upon such findings beyond six months from the date of this report. Beyond that date, a review
of the findings contained in this report may be necessary.

This report should be read in its entirety, as reference to part only may be misleading.
Economic Expert Witness Statement - Amendment C124 to the Mitchell Planning Scheme and combined Planning Permit Application PLP 203/17 Justin ...
Contents

1          Introduction                                                                                                                  1
1.1        Background                                                                                                                    1
1.2        Approach                                                                                                                      1
1.3        Abbreviations                                                                                                                 2
1.4        Expert witness details                                                                                                        3
2          Am C124 & Planning Permit Application PLP 203/17                                                                              6
2.1        Purpose                                                                                                                       6
2.2        Am C124                                                                                                                       6
2.3        Permit Application PLP 203/17                                                                                                 7
2.4        Exhibition                                                                                                                    9
2.5        Post exhibition changes                                                                                                      10
3          Strategic review                                                                                                             11
3.1        Background                                                                                                                   11
3.2        Amendment C123                                                                                                               11
3.3        Economics reports                                                                                                            14
3.4        Conclusion                                                                                                                   21
4          Economic impact assessment                                                                                                   22
4.1        Introduction                                                                                                                 22
4.2        Catchment area                                                                                                               23
           Definition                                                                                                                   23
           Demographics                                                                                                                 24
           Population                                                                                                                   25
           Retail spending                                                                                                              28
4.3        Retail hierarchy                                                                                                             29
           Introduction                                                                                                                 29
           Kilmore                                                                                                                      30
           Other towns within the catchment area                                                                                        31
           Beyond catchment area                                                                                                        31
           Comparison to similar markets                                                                                                33
           Current retail sales                                                                                                         34
           Future retail sales                                                                                                          34
4.4        Economic impact                                                                                                              35
           Sales forecast                                                                                                               35
           Trading impacts                                                                                                              37
           Benefits                                                                                                                     38
5          Submissions                                                                                                                  39
5.1        Mia submission                                                                                                               39
5.2        KADDRA submission                                                                                                            41
5.3        Karamoshos submission                                                                                                        42
6          Conclusion                                                                                                                   43

Appendices
Appendix A Curriculum vitae for Justin Ganly

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Economic Expert Witness Statement - Amendment C124 to the Mitchell Planning Scheme and combined Planning Permit Application PLP 203/17 Justin ...
Tables + Figures

Table 1—Kilmore NAC catchment area demographic profile                                                                                  24
Table 2—Catchment area population, 2011-2026                                                                                            25
Table 3—Catchment area retail spending by major category, 2011-2026                                                                     28
Table 4— Kilmore region retail and non-retail floorspace estimates,
      December 2018                                                                                                                     30
Table 5—Supermarket provision in peer Victorian regional markets                                                                        33
Table 6—Estimated retail floorspace and sales summary, 2018                                                                             34
Table 7—Retail floorspace and sales summary, 2021 (“Base Case”)                                                                         35
Table 8—Proposed Kilmore NAC potential tenant mix                                                                                       35
Table 9—Proposed Kilmore NAC, first year retail sales forecast (2021)                                                                   36
Table 10—Proposed NAC first year market share forecast (2020/21)                                                                        36
Table 11—Forecast Kilmore NAC trading impacts, 2021                                                                                     37
Table 12—National tenants in peer regional Victorian markets                                                                            40

Figure 1—Am C124 site boundary                                                                                                           7
Figure 2—Proposed Kilmore NAC plan – as exhibited                                                                                        8
Figure 3—Proposed Kilmore NAC plan – 1 February 2019                                                                                    10
Figure 4—Kilmore Town Centre Framework Plan                                                                                             19
Figure 5—Kilmore NAC catchment area                                                                                                     23
Figure 6—Residential infill sites, Kilmore                                                                                              26
Figure 7—Residential broadhectare sites, Kilmore                                                                                        27
Figure 8—Supermarket competition in the Kilmore region                                                                                  29

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Introduction

1.1 Background   01   This statement addresses economic issues relevant to the proposed development of
                      a new supermarket, associated shops and medical centre within Kilmore.
                 02   The statement has been prepared for Lascorp Development Group (Aust) Pty Ltd
                      (“Lascorp”).
                 03   The statement is to assist the Panel formed to consider Amendment C124 (“Am
                      C124”) to the Mitchell Planning Scheme (“Scheme”) and combined planning permit
                      application PLP 203/17 (“Permit Application”).
                 04   The Permit Application is in respect of the land known as 109 Northern Highway and
                      80 Clarke Street, Kilmore. Collectively this land is the “subject site” on which the
                      proposed supermarket, associated shops and medical centre are to be developed
                      (“Kilmore NAC”).
1.2 Approach     05   The tasks completed in the preparation of this statement have included:
                      •     Inspecting and carrying out shopfront floorspace surveys for all retail facilities
                            within Kilmore and surrounding townships of relevance.
                      •     Reading and considering relevant background documents to Am C124 and the
                            combined Permit Application.
                      •     Reading and considering documents and reports produced or commissioned in
                            relation to the Scheme (particularly those for Amendment C123).
                      •     Considering relevant submissions made regarding Am C124 and the combined
                            Permit Application.

                      Lascorp report - Mitchell Am C124 & Permit Application PLP 203-17 - Economic expert witness statement - Justin Ganly - 21   Deep End Services
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1.3 Abbreviations   06   The following abbreviations are used in this statement:

                         ABBREVIATION                                        EXPLANATION
                         ABS                                                 Australian Bureau of Statistics
                         Am C123                                             Amendment C123 to the Mitchell Planning Scheme
                         Am C124                                             Amendment C124 to the Mitchell Planning Scheme
                         C1Z                                                 Commercial 1 Zone
                         Council                                             Mitchell Shire Council
                         EE Peer Review                                      Peer Review of Dimasi & Co Report on Kilmore
                                                                             Supermarket Development Economic Impact
                                                                             Assessment, 5 April 2018, Essential Economics for
                                                                             Mitchell Shire Council
                         EIA                                                 Economic Impact Assessments
                         FG&L                                                Food, Groceries & Liquor
                         IN1Z                                                Industrial 1 Zone
                         ha                                                  Hectare
                         Kilmore NAC                                         Proposed supermarket, associated shops and
                                                                             medical centre on subject site
                         Lascorp                                             Lascorp Development Group (Aust) Pty Ltd
                         NAC                                                 Neighbourhood Activity Centre
                         NF & Services                                       Non-Food & Retail Services
                         Permit Application                                  Permit Application PLP 203/17
                         Scheme                                              Mitchell Planning Scheme
                         sqm                                                 square metre
                         subject site                                        109 Northern Highway and 80 Clarke Street, Kilmore

                         Lascorp report - Mitchell Am C124 & Permit Application PLP 203-17 - Economic expert witness statement - Justin Ganly - 21   Deep End Services
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1.4 Expert        The following expert witness details are provided as required in Planning Panels
witness details   Victoria’s Guide to Expert Evidence.
                  Name and address of expert
                  Mr Justin Ganly
                  Managing Director
                  Deep End Services Pty Ltd
                  Suite 304, 9-11 Claremont Street
                  South Yarra Victoria 3141
                  Expert’s qualifications and experience
                  •     Graduate Diploma of Applied Finance & Investment, Securities Institute of
                        Australia.
                  •     Bachelor of Engineering (Chemical) (First Class Honours), University of
                        Melbourne.
                  •     Managing Director of Deep End Services since 2003.
                  •     Retail and property consultant for KPMG, Coopers & Lybrand and Coles Myer
                        from 1993 to 2003.
                  •     A full CV is included at Appendix 1.

                  Expert’s area of expertise to make report
                  •     Preparation and presentation of economic expert witness evidence.
                  •     Preparation of sales and impact forecasts for new, expanded and refurbished
                        supermarkets and shopping centres.
                  •     Feasibility analysis for property owners and developers of all forms of property.
                  •     Activity centre network planning.
                  •     Thorough understanding of retail and commercial land use and development
                        patterns throughout Victoria.
                  •     Demographic analysis.
                  •     Population forecasting.

                  Lascorp report - Mitchell Am C124 & Permit Application PLP 203-17 - Economic expert witness statement - Justin Ganly - 21   Deep End Services
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Instructions that defined the scope of the report
I received written instructions from Amy Golvan, Legal Counsel at Lascorp on 11
December 2018 to prepare a statement of evidence which was to address all
relevant economic matters for the Panel considering Am C124 and the combined
Permit Application.
Facts, matters and assumptions upon which the report proceeds
•     The first full financial year of trading for the Kilmore NAC would be 2020/21.
•     All spending or sales data is quoted in future dollars where appropriate and
      includes GST.
Documents, materials and literature used in preparing this report
•     Stated in relevant sections of my report.
Assisting staff
•     Trudy Rigoni, Senior Associate, Deep End Services assisted with shopfront retail
      surveys and data modelling.
Summary of the opinions of the expert
•     Am C124 and the combined Permit Application will allow for the development of
      a new NAC in Kilmore.
•     The site on which the NAC is to be developed is recognised as being part of the
      Kilmore Town Centre, where it has been determined that there is a need for an
      additional full-line supermarket.
•     It is my opinion – and that of the author of the August 2018 EIA – that there
      would be a clear positive net community benefit resulting from the development
      of the NAC. Such opinions are important requirements of the Kilmore Structure
      Plan.
•     In arriving at my opinion I have assessed that one-off sales impacts on existing
      retailers within Kilmore – and further afield at locations including Wallan which
      includes the closest Woolworths – will be largely experienced by other large
      supermarkets, none of which will close as a result.
•     Impacts on specialty tenants will generally represent a maximum of one year of
      local spending growth and there will be a number of such tenants in Kilmore
      which will benefit from the reduction in escape expenditure as a result of the
      proposed development.
•     Other local benefits will include convenient access to a major new full-line
      supermarket and, potentially, other national brands not represented in Kilmore,
      increased choice and price competition and increased local employment.
•     I conclude, therefore, that the proposed development of the proposed Kilmore
      NAC is both needed and justified from an economic perspective.
Provisional opinions not fully researched
•     None.
Questions outside the expert’s expertise
•     None.
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Report incompleteness or inaccuracies
•     None.

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Am C124 & Planning Permit Application PLP 203/17

2.1 Purpose   07   The intent of Am C124 and the combined Permit Application is to facilitate the
                   development of a new supermarket, associated shops and medical centre within
                   Kilmore.
              08   The proposed Kilmore NAC would comprise 5,254 sqm of floorspace, anchored by a
                   full-line supermarket of 3,600 sqm, and would be supplied with 263 car spaces.
2.2 Am C124   09   Am C124 has been prepared by the Mitchell Shire Council (“Council”), which is the
                   planning authority for this amendment.
              10   The amendment has been requested by Debra Butcher Consulting Pty Limited on
                   behalf of Lascorp.
              11   Am C124 applies to the land – with a total area of approximately 17,997 sqm (1.80 ha)
                   – at:
                   •     Lot 1 on Title Plan 616275M (Volume 02105 Folio 994) street address of 109
                         Northern Highway, Kilmore;
                   •     Lot 1 on Plan of Subdivision 348076Y (Volume 10306 Folio 923) street address of
                         109 Northern Highway, Kilmore;
                   •     Lot 2 on Plan of Subdivision 348076Y (Volume 10306 Folio 924) street address of
                         109 Northern Highway, Kilmore; and
                   •     Lot 1 on Plan of Subdivision 332594P (Volume 10247 Folio 017) street address of
                         80 Clarke Street, Kilmore;
              12   The boundary of the Am C124 land (i.e. the subject site) is indicated on Figure 1.

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Figure 1—Am C124
site boundary

Source: Am C124
Explanatory Report

                     13   The subject site was previously occupied by a single dwelling but is now vacant. It is
                          zoned Industrial 1 Zone (“IN1Z”).
                     14   As set out in the Am C124 Explanatory Report:
                                The Amendment proposes to rezone land at 109 Northern Highway and 80
                                Clarke Street from the Industrial 1 Zone (IN1Z) to the Commercial 1 Zone
                                (C1Z). Specifically, the Amendment will result in the following changes to the
                                Mitchell Planning Scheme:
                                •     Rezone the land at 109 Northern Highway and 80 Clarke Street to the
                                      Commercial 1 Zone;
                                •     Amend Planning Scheme Map No. 16.

2.3 Permit           15   As set out in the Am C124 Explanatory Report, the Permit Application seeks approval
Application PLP           for:
203/17                          •     Buildings and works associated with the development of a supermarket,
                                      associated shops and medical centre;
                                •     Removal of native vegetation;
                                •     Creation of an access to a road in a Road Zone Category 1;
                                •     The use of land for the sale of liquor.
                     16   Architectural details for the proposed Kilmore NAC plan have been provided as part
                          of the Permit Application documentation, with the ground floor plan copied within
                          Figure 2.
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Figure 2—Proposed Kilmore NAC plan – as exhibited

Source: ClarkeHopkinsClarke

                       17   Further details regarding the proposed Kilmore NAC are provided within the Am
                            C124 Explanatory Report as follows:
                                  The development proposed as part of the planning permit application will
                                  comprise a total floor area of 5,254 square metres comprising the following
                                  key elements.
                                  •     A ‘full-line’ supermarket comprising 3,600 square metres, with an
                                        adjoining liquor store of 200 square metres. The supermarket will be
                                        accessed via two entrances, on the eastern and southern sides of the
                                        activity centre, both of which will have significant entry canopies utilising
                                        a variety of building materials. The liquor store will be able to be accessed
                                        both internally from the supermarket and externally onto the paved area
                                        abutting its frontage. The loading dock to the supermarket will be located
                                        on the west side of the building.
                                  •     Specialty retail tenancies which wraps around the supermarket building
                                        along its south and east sides with a total floor area of 819 square metres.
                                        The specialty retail tenancies are expected to comprise a variety of uses
                                        including shops, cafes and takeaway food premises.
                                  •     A medical centre near the north-east corner of the supermarket.

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                            •     Three speciality retail tenancies in the eastern portion of the site fronting
                                  either the Kilmore Creek or the Northern Highway.
                            •     Amenities, including a dedicated parents room, to be located on the
                                  western side of the activity centre.
                            •     Bicycle facilities to be located adjacent to the north east corner of the
                                  supermarket including change room facilities and internal bike lockers.
                                  Additional external bicycle parking is also proposed to be scattered
                                  throughout the site.
                            •     Pedestrian access to be provided throughout the development. This
                                  includes along both street frontages, along the southern and eastern sides
                                  of the proposed centre as well as a number of internal north-south and
                                  east-west pedestrian connections. An additional connection is also
                                  proposed between the Northern Highway and the medical centre,
                                  adjacent to the creek corridor, providing opportunities for surveillance
                                  and views to the Kilmore Creek.
                            •     Three access points are proposed to the site comprising a left-in/left-out
                                  arrangement to the Northern Highway, and two access points to Clarke
                                  Street.
                            •     A total of 263 car parks to be provided as part of the development.

2.4 Exhibition   18   Am C124 and the combined Permit Application were exhibited from 14 September
                      2018 to 22 October 2018.
                 19   A total of 11 submissions were made by 9 parties (with 4 of the submissions made
                      after 22 October 2018).
                 20   I will address submissions relevant to my area of expertise later in this statement.

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2.5 Post               21   I am advised that two further sets of plans have been prepared post exhibition to
exhibition                  respond to some submissions and to address Council issues.
changes                22   These plans are dated 1 February 2019 and 14 February 2019 respectively.
                      23    I have copied the ground floor plan from the 1 February 2019 drawings at Figure 3.

Figure 3—Proposed Kilmore NAC plan – 1 February 2019

Source: ClarkeHopkinsClarke

                      24    I have been instructed that the 1 February 2019 plans will be relied upon at the Panel,
                            but note that the floorspace of some of the elements of the plans were mislabelled
                            by the architect (but corrected in the 19 February 2019 plans).
                      25    Hence, the supermarket and medical centre floorspace remain unchanged from the
                            exhibited plans at 3,600 sqm and 300 sqm respectively but the balance of the
                            centre’s floorspace is reduced from 1,354 sqm to 1,135 sqm and the centre’s total
                            floorspace is reduced from 5,254 sqm to 5,035 sqm.
                      26    I will rely upon these reduced floorspace figures later in this statement.

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Strategic review

3.1 Background   27   This section of my statement examines relevant strategic projects and analysis
                      which has been carried out on behalf of Council and Lascorp within the past four
                      years or so.
                 28   It is my opinion that Am C124 (and the combined Permit Application) is one of the
                      key Amendments anticipated to result from Council’s recent review process and,
                      specifically, the Kilmore Structure Plan.
3.2 Amendment    29   Amendment C123 to the Mitchell Planning Scheme (“Am C123”) was prepared by
C123                  Council and exhibited between 6 October 2017 and 17 November 2017.
                 30   Am C123’s Explanatory Report sets out the purpose of the Amendment as follows:
                                      The Amendment proposes to implement the Kilmore and Wandong-
                                      Heathcote Junction Structure Plans by amending the Municipal Strategic
                                      Statement, rezoning land, applying the Design Development Overlay and
                                      Development Plan Overlay, amending the public open space contribution
                                      and introducing new zone schedules.
                                      The Amendment proposes the following changes to the Mitchell Planning
                                      Scheme:
                                  •     Amend Clause 21.01 (Mitchell Shire) to delete reference to Wandong-
                                        Heathcote Junction as a growth town.
                                  •     Amend Clause 21.07 (Housing) to delete reference to subsequent
                                        structure plans for Kilmore.
                                  •     Amend Clause 21.11 (Local Areas) to revise local policy for Kilmore and
                                        Wandong-Heathcote Junction in accordance with the objectives and
                                        strategies of the Kilmore and Wandong-Heathcote Junction Structure
                                        Plans.
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            •     Amend Clause 21.12 (Implementation) to:
                  • Correct several spelling and grammar errors.
                  • Add Wandong-Heathcote Junction as a major town.
                  • Add that the Neighbourhood Residential Zone is being applied.
                  • Add reference to the Development Plan Overlay being applied to
                      Kilmore’s growth areas
                  • Delete references to ‘reviewing the Kilmore Structure Plan 2008’,
                      ‘preparing a new Wandong-Heathcote Junction Structure Plan’
                      and ‘prepare a Small Town/Settlement strategy for Kilmore East’.
                  • Add reference to reviewing the open space structure of Kilmore,
                      preparing a tourism strategy for Kilmore and preparing a heritage
                      gap study for Kilmore.
                  • Delete ‘apply a Design and Development Overlay to the Kilmore
                      town entrances and Sydney Street to implement the Kilmore Urban
                      Design Framework’.
                  • Amend ‘Review the need for Development Plan Overlay Schedules
                      1, 2 and 7 given that parts of these areas have been extensively
                      developed’ as Schedule 2 has been removed from the Mitchell
                      Planning Scheme and Schedule 7 is revised as part of the proposed
                      amendment.
                  • Add a new action to implement the key directions and strategies
                      set out by the Structure Plans.
                  • Add the Wandong-Heathcote Junction Structure Plan, August 2016
                      the Wandong-Heathcote Junction Neighbourhood Character
                      Assessment, July 2017, the Kilmore Structure Plan, August 2016,
                      the Kilmore Infrastructure Funding Framework, August 2017, the
                      Kilmore East Planning Controls Review, July 2017 and the Kilmore
                      Town Centre Revitalisation, August 2016 as Reference Documents.
                  • Delete the Kilmore Traffic Management Report, 1996 and the Shire
                      of Kilmore Community Development Levy – Review of Impact of
                      Subdivisional Development on Selected Community Facilities (date
                      unknown) as Reference Documents.
            •     Insert a new Schedule 2 to the Clause 32.03 Low Density Residential
                  Zone for land east of Rail Street within Heathcote Junction to specify
                  a lot size minimum of 0.4ha.
            •     Insert new Schedule 2 to Clause 32.05 Township Zone for all land in
                  Kilmore East.
            •     Insert new Schedule 2 to Clause 43.02 Design and Development
                  Overlay to apply to Wandong Village as shown at the mapping
                  reference table (Attachment 1).
            •     Insert new Schedule 4 to Clause 43.02 Design and Development
                  Overlay to apply to Kilmore Town Centre and key gateway sites as
                  shown at the mapping reference table (Attachment 1).
            •     Insert new Schedule 2 to Clause 43.04 Development Plan Overlay to
                  apply to lots P131122 and Lot 1 PS324058L, Dry Creek Road, Wandong.

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                 •     Insert new Schedule 5 to Clause 43.04 Development Plan Overlay to
                       apply to Kilmore’s residential growth areas as shown at the mapping
                       reference table (Attachment 1).
                 •     Insert new Schedule 10 to Clause 43.04 Development Plan Overlay to
                       apply to Kilmore’s infill development sites as shown at the mapping
                       reference table (Attachment 1).
                 •     Amend the Schedule to Clause 52.01 Public Open Space Contribution
                       and Subdivision to specify a 4% contribution for infill development.
                 •     Rezone the area of Wandong generally bordered by part of Rail Street,
                       Wandong Avenue, Dry Creek Crescent and Affleck Street from
                       General Residential Zone to Neighbourhood Residential Zone, insert a
                       new Schedule 1 to Clause 32.09 Neighbourhood Residential Zone and
                       insert new Schedule 4 to Clause 43.02 Design Development Overlay.
                 •     Rezone 18, 20, 22, 24, 24A, 26, 26A, 28 an 28A Baden Drive, Wandong
                       from General Residential Zone to Low Density Residential Zone
                       Schedule 2.
                 •     Rezone 83 Rail Street from General Residential Zone to Public Use
                       Zone Schedule 1.
                 •     Rezone 85 Rail Street and 87 Bonnieview Court, Wandong from
                       Commercial 1 Zone to General Residential Zone.
                 •     Amend the Schedule to 61.03.
31   30 submissions were made to the exhibited Am C123 – with 2 late submissions
     subsequently made in February and March 2018 – and these were considered at
     Council’s Ordinary Meeting of 19 February 2018, with the key conclusions as follows:
                     In total 30 submissions have been received. A summary of the
                     submissions received and the officer response is provided at Attachment
                     1 to this report. The overall vision and guiding principles within each
                     Structure Plan and Amendment C123 have not been challenged. Most
                     submissions received focus on a site or specific issues as opposed to
                     challenging the overall strategic intent of Amendment C123.
                     The Structure Plans are Council’s adopted strategic vision for both
                     townships and providing them with statutory weight under the Mitchell
                     Planning Scheme is vital to ensuring that Kilmore and Wandong-
                     Heathcote Junction develops in a fair, orderly and sustainable manner.
                     Implementation of the Structure Plans through Amendment C123 will
                     provide significant benefits to Council, referral authorities and the
                     community regarding the future development of both townships. It is
                     recommended that Amendment C123 be referred to an Independent
                     Planning Panel for review and consideration of unresolved submissions.
32   Am C123 was then referred to a Planning Panel, with a public hearing held from 2-4
     May 2018.

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                33   The Panel’s Report was released on 26 June 2018 with key overall recommendations
                     as follows (with my emphasis added):
                                     The Panel has considered all of these issues in detail and generally
                                     considers both structure plans put in place a robust and realistic policy
                                     and statutory framework that will guide the future growth of both towns.
                                     The Panel concludes:
                                 •     The submissions have identified improvements to both structure plans
                                       that, where supported, will result in a more robust set of policies,
                                       controls and reference documents.
                                 •     The growth potential of Kilmore is clear and Council has identified
                                       further residential, commercial, industrial and educational
                                       opportunities to accommodate this growth.
                                 •     The need to limit growth at Wandong-Heathcote Junction is a sensible
                                       response to the towns environmental constraints and neighbourhood
                                       character.
                                 •     The Kilmore Infrastructure Funding Framework 2016 is an important
                                       first step in identifying infrastructure items that should be the subject
                                       of contributions from developers. It does however require more detail
                                       on costs, their equitable apportionment and an implementation
                                       mechanism.
                34   Council considered the Panel Report at its Ordinary Meeting of 20 August 2018 and
                     voted unanimously to adopt Am C123 with the changes generally recommended by
                     the Panel and to refer it to the Minister for approval and implementation into the
                     Scheme.
                35   I understand that the Amendment remains with the Minister at the current time.
3.3 Economics   36   Tony Dimasi has prepared a number of versions of Economic Impact Assessments
reports              (“EIAs”) and a witness statement on behalf of Lascorp for the Kilmore NAC and
                     Amendments C123 and C124:
                     •     Kilmore Supermarket Centre, Economic Impact Assessment, May 2016
                           (MacroPlanDimasi) – this formed part of a submission of 31 May 2016 made by
                           Debra Butcher Consulting on behalf of Lascorp regarding the Draft Kilmore
                           Structure Plan
                     •     Kilmore Supermarket Development, Economic Impact Assessment, February
                           2018 (Dimasi & Co) – this accompanied the February 2018 Planning Permit
                           application made by Lascorp
                     •     Kilmore Supermarket Development, Economic Impact Assessment, March
                           2018 (Dimasi & Co) – peer reviewed by Essential Economics (as discussed later)
                     •     Shire of Mitchell Planning Scheme, Amendment C123, Statement of evidence
                           of Anthony Dimasi, 25 April 2018
                     •     Kilmore Supermarket Development, Economic Impact Assessment, August
                           2018 (Dimasi & Co) – this was exhibited as part of the Am C124 document suite.

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37   The consistent conclusion of all of these reports and the witness statement has
     been:
     •     There is an existing need for another full-line supermarket within Kilmore;
     •     The need is growing as the catchment population grows;
     •     The subject site is the most appropriate location for the supermarket and
           relatively modest supply of supporting speciality shops and non-retail tenancies;
           and
     •     There are a range of benefits that will accrue to the local community and these
           outweigh one-off sales impacts on other retailers – mainly chain supermarkets –
           such that the proposed development of the Kilmore NAC will deliver a positive
           net community benefit.
38   The March 2018 EIA was peer reviewed by Essential Economics at the request of
     Council, with the findings documented within the report Peer Review of Dimasi &
     Co Report on Kilmore Supermarket Development Economic Impact Assessment,
     5 April 2018 (“EE Peer Review”).
39   The conclusions of the EE Peer Review were as follows (with my emphasis added):
           1. The EIA has been prepared on a conventional basis typically adopted by
              retail economists. However, an issue is associated with the projected
              market shares associated with spending (sales) captured from the main
              trade area and from beyond the main trade area, as noted below at
              paragraphs 3 and 4.
           2. Retail floorspace figures in the EIA indicate that the existing provision in
              the main trade area is the equivalent of 1.1m2 per resident; this compares
              with the widely accepted average provision of around 2.2m2 per resident
              that is supported at the metropolitan level (or at the State or national
              levels). Thus, a considerable proportion (50%) of retail spending of trade
              area residents is currently ‘lost’ to retailers and centres located beyond
              the Kilmore main trade area. The proposed supermarket and specialty
              shops will assist in retaining a share of this existing escape spending.
           3. An explanation is required which describes why adverse impacts on
              existing traders in Kilmore are almost the same as the impacts on the
              more distant Wallan traders. The main impact is on Kilmore with a -9.7%
              loss of sales (-$12.4m), followed by a loss for the more distantly-located
              Wallan traders at -10.0% (-$11.2m).
           4. A further explanation would assist in regard to the estimate that only 50%
              of impacts arising from the proposed retail development would be drawn
              from within the main trade area, while the significant balance of 50% of
              impacts is estimated to be on centres located beyond the main trade area.
              This question leads on to the observation: is the estimated impact on
              existing traders in Kilmore of -$12.4m or -9.7% too low?
           5. As the Dimasi & Co report also indicates (at p45), the proposed
              development meets planning objectives contained in the Kilmore
              Structure Plan.

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           6. The conclusion in this peer review is that the proposed Kilmore
              supermarket development would be expected to contribute in a positive
              manner to retailing in Kilmore and the surrounding trade area, and would
              deliver a net community benefit. However, a response to the issues raised
              at paragraphs 3 and 4 above would assist in assessing the potential
              adverse trading impacts on existing centres and retailers, both within and
              beyond the main trade area.
40   The August 2018 EIA addressed the key concerns of the EE Peer Review, with a
     summary provided at page 45 as follows (with my emphasis added):
                   There are a number of reasons why, as shown in Table 5.3 above, any
                   trading impacts resulting from the proposed new development would be
                   spread across a number of locations in addition to the existing Kilmore
                   town centre, for example to Wallan and Seymour. This is because those
                   locations contain the closest collections of major supermarkets for many
                   trade area residents, and in particular the closest Woolworths
                   supermarkets, for all trade area residents. Given the level of escape
                   spending from Kilmore, the addition of a third supermarket at Kilmore
                   will, first and foremost, help meet some of the needs of those trade area
                   residents whose expenditure is escaping to those locations because they
                   contain a Woolworths supermarket. Therefore, the total impact from the
                   development will be distributed across the existing Kilmore retailers,
                   primarily the supermarkets, as well as a number of major supermarket
                   centres in a number of other locations. For this reason, the estimated
                   impact on Kilmore retailers is $12.4 million or 9.7% on average.
41   I also note that the Panel requested a further submission from Mr Dimasi and this
     was provided on 11 February 2019.
42   The August 2018 EIA also provides a thorough review of the Am C123 Panel Report,
     its subsequent adoption by Council and the implications for the proposed Kilmore
     NAC as follows:
                   The Kilmore Structure Plan 2016 was adopted by Council on 15 August
                   2016 and was placed on formal public exhibition as part of Planning
                   Scheme Amendment C123 in October/November 2017. In relation to the
                   Kilmore Town Centre in particular, Amendment C123 sought to
                   implement the findings of the Kilmore Structure Plan by proposing a
                   series of change to the Municipal Strategic Statement (MSS), the
                   application of a Design and Development Overlay Schedule 4 (DDO4) to
                   parts of the Town Centre (including the subject site proposed for
                   rezoning as part of this combined amendment/application) and including
                   the Structure Plan as a reference document.
                   Amendment C123 and the Kilmore Structure Plan were subsequently
                   considered by a Planning Panel in May 2018 and the Panel report was
                   issued in June 2018. The Panel recommended approval of Amendment
                   C123 subject to various changes as outlined in the Panel Report.
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                In relation to Kilmore, the Panel Report specifically discusses the Kilmore
                Town Centre at Section 3.1 and addresses, in particular, how the need
                for a second supermarket should be addressed in the Kilmore Structure
                Plan and how the Sydney Street activity centre should be defined.
                In relation to the these issues the Panel concluded that:
            •     the Lascorp Development Group land is part of the Sydney Street
                  Town Centre and the development of the land for a retail use should
                  not be the subject of an out-of-centre assessment;
            •     the proposed changes to Clause 21.11-3 (Document 21) are appropriate
                  (refer to Appendix C).
            Included at Appendix C of the Panel Report is an amended version of
            Clause 21.11-3 which the Panel supported. Of relevance to this current
            proposal to rezone the subject site, Amended Clause 21.11-3 does the
            following:
            •     designates the subject site as sitting within the Sydney Street Town
                  Centre boundary as shown on the ‘Kilmore Town Centre Framework
                  Plan’;
            •     includes an annotation on that Plan identifying the subject site as
                  ‘potential supermarket and associated speciality retail site’; and
            •     supports an additional full line supermarket within the Sydney Street
                  Town Centre.
            At a Council meeting on 20 August 2018 Council adopted Amendment
            C123 with changes as recommended by the Panel. Amendment C123,
            including an updated version of the Structure Plan to reflect the
            recommendations of the Panel, has now been sent to the Minister for
            Planning for final approval.
            The most relevant element of the updated Structure Plan in relation to the
            current rezoning proposal is Section 3.6 ‘Activity Centres’. Relevant
            issues/considerations identified in this section include:
            •     the need to consolidate the Sydney Street Town Centre as the primary
                  focus for activity in Kilmore;
            •     the lack of clear gateways to the Sydney Street Town Centre;
            •     the lack of integration of the Kilmore Creek corridor and Sydney
                  Street;
            •     the lack of large unconstrained sites suitable for a major retail anchor
                  in the Town Centre.
            Consistent with Clause 21.11-3 of the MSS, Figure 42 ‘Activity Centres’
            includes the subject site within the boundary of the primary commercial
            centre, shows it as a ‘key gateway site’ and includes the following
            annotation:

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                             ‘Potential full line supermarket site subject to an economic
                             impact assessment, high quality urban design outcomes with
                             interface to Sydney Street/Northern Highway and the Kilmore
                             Creek and other strategies set out within the Structure Plan’.
              Relevant strategies at Section 3.6 include the following.
                             Activity Centre (AC) 1.1 - Consolidate Sydney Street Town Centre
                             by prioritising all retail and other activity-generating uses within
                             the existing town centre area as defined in Figure 42.
                             AC 1.4 Provide for enhanced gateways which mark the arrival at
                             the northern and southern approaches into the town centre as
                             provided in Chapter 4.9.
                             AC 1.17 - Support an additional full line supermarket or other
                             large anchor retail tenant within the established town centre or
                             immediately adjacent provided the requirements for AC1.18 and
                             Figure 42 are met where relevant.
              AC1.18 only relates to development immediately adjacent to the town
              centre therefore is not applicable to the subject site which sits within the
              town centre. Accordingly, the key requirements that apply to the subject
              site are those outlined on Figure 42 – preparation of an EIA and high-
              quality urban design outcomes addressing the surrounding streets and
              the Kilmore Creek. This report addresses the requirement for an EIA.
              At Section 4.8 of the KSP, Precinct 4 – North Growth + Employment
              Precinct, the subject site is identified as a Key Gateway site, while
              Section 4.9.2 Design/Development Objectives, states as follows:
                             “Encourage design and development of the nominated Key
                             Gateway Site which:
                         •     Recognises the site’s strategic role as contributing to both the
                               Kilmore township gateway and the Kilmore Town Centre
                               Gateway experience.
                         •     Has regard to the preferred character of the Northern Highway.
                         •     Addresses the Kilmore Creek and enhances its natural features
                               and role as part of the primary linear open space corridor.
                         •     Discourages extensive car parking and promotes finer grain
                               built form along the Northern Highway frontage.
                         •     Provides for high quality architectural built form outcomes and
                               use of materials and colours to reflect its strategic location.
                         •     Promote site access via Clarke Street.
                         •     Enhances landscaping opportunities within the site, particularly
                               along the Kilmore Creek and road frontages.

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                      43   Appendix C of the Panel Report (as referred to in the August 2018 EIA) includes an
                           updated Kilmore Town Centre Framework Plan which is copied at Figure 4 and is to
                           be inserted at Clause 21.11-3 of the Scheme.
Figure 4—Kilmore
Town Centre
Framework Plan

Source: Appendix C,
Am C123 Panel
Report

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44   Appendix C of the Am C123 Panel Report also contains the following updated
     guiding principles with respect to development of the Kilmore Town Centre at
     Clause 21.11-3 of the Scheme:
           •     Protect and reinforce the Sydney Street Town Centre as shown on the
                 Kilmore Town Centre Framework Plan as the primary destination and
                 focus of Kilmore.
           •     Support consolidation of the Sydney Street Town Centre by prioritising all
                 retail and other activity-generating uses within the Sydney Street Town
                 Centre as per the Kilmore Structure Plan, August 2016.
           •     Facilitate establishment of accommodation uses within the Sydney Street
                 Town Centre and other diverse activity generating uses compatible with
                 the town centre environment.
           •     Support land uses which will provide activation of Sydney Street and
                 increase night time trade and activity.
           •     Facilitate the secondary role of Melbourne and Patrick Streets within the
                 town centre by creating safe pedestrian connections from Sydney Street
                 via public or private thoroughfares.
           •     Encourage amalgamation of individual sites within the Sydney Street
                 Town Centre to encourage larger tenancies within the Sydney Street
                 Town Centre.
           •     Support streetscape activation along Sydney Street through outdoor
                 dining and other proposals which will promote pedestrian-orientated
                 activity.
           •     Support development which seeks to renew and refurbish existing
                 heritage buildings.
           •     Support establishment of office uses on the first floor.
           •     Support an additional full line supermarket within the Sydney Street Town
                 Centre.
           •     Support other large anchor retail tenants immediately adjacent the
                 Sydney Street Town Centre provided the following can be demonstrated;
                 • There are no suitable sites available for the desired retail development
                     within the town centre.
                 • There is demonstrated demand for additional retail floor space.
                 • The proposal does not detrimentally affect the vitality of Sydney Street
                     and attract other retail uses that are better suited within the
                     established town centre.
                 • The proposal can integrate with the town centre and is accessible.
                 • The proposal provides net community benefit including upgrades to
                     existing or additional infrastructure.

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3.4 Conclusion   45   It is clear that a significant amount of strategic work has been carried out during the
                      past few years to help guide the future development of Kilmore.
                 46   Key conclusions are that Kilmore needs an additional full-line supermarket and that
                      this should be located within the Town Centre.
                 47   It is against this backdrop that I now consider the proposed development of the
                      Kilmore NAC.

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Economic impact assessment

4.1 Introduction   48   This section of the statement addresses the economic impact of the development of
                        the proposed NAC on the Lascorp site in Kilmore.
                   49   For the purposes of this assessment, it has been assumed that the first full financial
                        year of trading of the Kilmore NAC would be 2020/21.
                   50   It has also been assumed that there are no other major retail developments which
                        occur within the catchment area before this time (I am unaware of any such
                        proposals).

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4.2 Catchment             Definition
area                 51   The proposed Kilmore NAC would draw sales from the following catchment area
                          sectors:
                          •     Primary – the township of Kilmore and surrounding areas including the nearby
                                townships of Broadford and Pyalong to the north;
                          •     Secondary north – extending approximately 40 km north along the Northern
                                Highway and encompassing predominately rural areas but including the small
                                communities of Glenhope and Tooborac;
                          •     Secondary south-east – extending approximately 20 km east to include the rural
                                areas east of the Hume Freeway and 10 km south to include the township of
                                Wandong; and
                          •     Secondary west – extending up to 40 km west to incorporate the township of
                                Lancefield and surrounding rural areas.
                     52   These areas are shown on Figure 5, with the catchment area defined being similar to
                          that adopted in the August 2018 EIA (except that I exclude Heathcote to the north).

Figure 5—Kilmore NAC catchment area

Source: MapInfo
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                        Demographics
                   53   The demographic profile of catchment area residents is shown in Table 1.
Table 1—Kilmore         Demographic characteristic                                             Secondary   Secondary    Secondary         Total
                        (2016 Census)                                             Primary          north   south-east        west    catchment      Regional Vic
NAC catchment
                        Persons and dwellings
area demographic
                        Usual resident population                                  14,515           826        2,888        3,268        21,497       1,441,413
profile
                        Total private dwellings                                     5,851           433        1,112        1,398         8,794         688,525
                        - % unoccupied                                                   8%         25%          11%         12%           10%             16%
Source: Deep End        Average household size (5)(7)                                   2.60        2.43        2.91         2.55          2.63            2.39
Services; ABS           Economic indicators
                        Participation rate (2)                                          58%         47%          66%         61%           59%             56%
                        Unemployment rate (2)                                           5.5%       6.1%         4.8%        4.0%          5.1%             6.0%
                                                      (2)
                        White collar workers                                            38%         48%          38%         46%           40%             44%
                        Bachelor degree or higher (2)(3)                                11%         11%          12%         16%           12%             15%
                        Age group
                        0-9                                                             13%         11%          14%         13%           13%             12%
                        10-19                                                           15%         10%          14%         13%           14%             12%
                        20-34                                                           17%          8%          17%         13%           16%             17%
                        35-49                                                           19%         16%          21%         20%           19%             18%
                        50-64                                                           19%         30%          23%         24%           21%             21%
                        65+                                                             17%         25%          11%         17%           16%             20%
                        Average age                                                     38.8        46.1        37.2         40.6          39.1            41.5
                        Annual household income (1)(3)(5)
                        $182,400                                                        6%          6%          11%          8%            7%               5%
                        Average household income                                  $82,961        $66,987     $99,703      $89,115      $85,456          $74,899
                        Variation from Regional Vic average                             11%        -11%          33%         19%           14%                 -
                        Average household loan repayment                          $19,793        $18,438     $22,330      $22,039      $20,514          $17,959
                        Average household rent payment                            $14,354         $9,760     $12,438      $15,209      $14,237          $12,499
                        Country of birth (1)
                        Australia                                                       90%         85%          91%         90%           90%             88%
                        England                                                          3%          5%           3%          4%            3%               3%
                        New Zealand                                                      1%          2%           1%          1%            1%               1%
                        China                                                            1%          0%           0%          0%            1%               0%
                        Italy                                                            0%          1%           1%          1%            1%               1%
                        Scotland                                                         0%          1%           0%          0%            0%               0%
                        Other                                                            4%          6%           4%          4%            4%               7%
                        Occupied private dwelling tenure (1)(4)(5)(6)
                        Fully owned                                                     33%         43%          31%         39%           34%             39%
                        Being purchased                                                 45%         44%          60%         49%           47%             35%
                        Rented                                                          22%         13%           9%         12%           18%             26%
                                          (1)(4)(7)
                        Dwelling type
                        Separate house                                                  92%        100%        100%          99%           95%             90%
                        Townhouse/semi-detached                                          5%          0%           0%          1%            4%               7%
                        Apartment                                                        2%          0%           0%          0%            1%               3%
                        Household composition (4)(5)
                        Couples with children                                           34%         27%          43%         34%           35%             27%
                        Couples without children                                        27%         41%          29%         32%           29%             29%
                        One parent family                                               13%          7%           8%         10%           12%             11%
                        Lone person                                                     24%         21%          18%         23%           23%             29%
                        Group                                                            2%          4%           1%          2%            2%               3%
                        Motor vehicle ownership per dwelling (1)(5)
                        None                                                             3%          0%           1%          2%            3%               6%
                        One                                                             31%         20%          19%         24%           28%             34%
                        Two                                                             38%         44%          39%         42%           39%             39%
                        Three or more                                                   28%         36%          41%         32%           31%             21%

                        Notes:
                        (1)
                              Excludes not stated
                        (2)
                              15 years and over and excludes not stated
                        (3)
                              Excludes inadequately described and/or partially stated
                        (4)
                              Excludes other
                        (5)
                              Occupied private dwellings
                        (6)
                              Includes visitor only households
                        (7)
                              Excludes visitor only households

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                     54   When compared to Regional Victorian averages, the key characteristics of the
                          catchment area resident population are as follows:
                          •     Larger household sizes;
                          •     Lower unemployment rate;
                          •     Younger age profile, reflecting the strong skew towards ‘couples with children’
                                households;
                          •     Higher household income levels;
                          •     Dwelling stock almost entirely separate houses with well above average levels of
                                homes under mortgage, indicating the region is attractive to families priced out
                                of the nearby outer metropolitan fringe market; and
                          •     High motor vehicle ownership levels.
                     55   This profile is consistent with that observed in peri-urban areas throughout Australia.
                          Population
                     56   The historical and forecast population of the catchment area is set out in Table 2.

Table 2—
                          Sector                                       2011                   2016                   2018                   2021                2026
Catchment area
population, 2011-         Primary                                   12,611                 14,757                 15,465                 16,285               17,815
2026
                          Secondary north                               692                    833                    855                    894                 944

Source: Deep End          Secondary south-east                       2,851                   2,976                  3,014                  3,059               3,154
Services; ABS;
                          Secondary west                             2,975                   3,373                  3,490                  3,675               4,015
Victoria in Future
2016; forecast.id         Total catchment area                      19,129                 21,939                 22,824                 23,913               25,928

                          Average change                                   -                 2.8%                   2.0%                    1.6%                1.6%
                          (%pa)

                     57   It is evident that the catchment area has experienced strong population growth, with
                          the pace of growth estimated to have averaged 2.6% per annum between 2011 and
                          2018.
                     58   The key Primary sector has been responsible for most of this growth, where an
                          average of just over 400 people per annum have been added to the population base
                          over the past seven years at a rate of 3.0% per annum.
                     59   Looking forward, the pace of growth is expected to ease slightly to 1.6% per annum
                          (or about 390 people per year)
                     60   However, most of the population growth will continue to be centred on the Primary
                          sector.
                     61   As shown on Figure 6 and Figure 7, significant opportunities exist for residential
                          development within the Kilmore township.
                     62   The Kilmore Structure Plan indicates at page 36 that the sites identified on Figure 6
                          are capable of supplying 13-17 years of new housing for Kilmore while the sites
                          identified on Figure 7 would ensure the longer-term potential of Kilmore and/or
                          enable rates of population growth to accelerate.

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Figure 6—Residential infill sites, Kilmore

Source: Kilmore Structure Plan
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Figure 7—Residential broadhectare sites, Kilmore

Source: Kilmore Structure Plan
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                          Retail spending
                     63   The historical and forecast spending by catchment area residents on major retail
                          categories is set out in Table 3.

Table 3—                                                                        Spending market ($m)                                     Average change (%pa)
Catchment area            Spending category                      2011          2016          2018          2021          2026       2011-18       2018-21       2021-26
retail spending by        Food, Groceries & Liquor       ("FG&L")
major category,           Primary                                88.8         117.5         131.1          140.1         172.1          5.7%          2.2%        4.2%
2011-2026                 Secondary north                           4.9          6.7           7.3           7.7           9.1          5.9%          1.9%        3.5%
                          Secondary south-east                   20.4           24.1          26.0          26.8          31.0          3.5%          1.0%        3.0%
Source: Deep End          Secondary west                         22.3           28.6          31.4          33.7          41.5          5.0%          2.4%        4.2%
Services; Deloitte
                          Total                                 136.4         176.8         195.8          208.3         253.7          5.3%          2.1%        4.0%
Access Economics;
                          Non-Food & Retail Services ("NF & Services")
Marketinfo
                          Primary                                66.2           85.3          92.2          94.8         112.0          4.8%          0.9%        3.4%
                          Secondary north                           3.5          4.7           4.9           5.0           5.7          4.9%          0.7%        2.6%
                          Secondary south-east                   15.1           17.3          18.1          17.9          19.9          2.6%          -0.3%       2.2%
                          Secondary west                         17.8           22.2          23.7          24.4          28.8          4.2%          1.0%        3.4%
                          Total                                 102.6         129.5         138.9          142.2         166.5          4.4%          0.8%        3.2%
                          Total
                          Primary                               155.0         202.8         223.3          234.9         284.1          5.4%          1.7%        3.9%
                          Secondary north                           8.4         11.3          12.2          12.7          14.9          5.5%          1.4%        3.2%
                          Secondary south-east                   35.5           41.4          44.1          44.7          50.9          3.1%          0.4%        2.6%
                          Secondary west                         40.1           50.8          55.2          58.1          70.3          4.7%          1.8%        3.9%
                          Total                                 239.0         306.3         334.8          350.5         420.2          4.9%          1.5%        3.7%

                     64   Catchment area residents were estimated to have spent $334.8 million on retail
                          products in 2018, with Primary sector residents spending $223.3 million of this (i.e.
                          66% of the total).
                     65   Spending on Food, Groceries & Liquor (“FG&L”) – which are the key product
                          categories for supermarkets – was estimated as $195.8 million in 2018, with $131.1
                          million generated by Primary sector residents. In a peri-urban market such as
                          Kilmore, it is a reasonable expectation that much of this spending should be
                          captured by local retailers.
                     66   Looking forward, the total catchment area spend on retail products is forecast to
                          grow by 1.5% per annum to reach $350.5 million in 2021 and then by 3.7% per annum
                          to reach $420.2 million in 2026.
                     67   Spending on FG & L is forecast to increase by a total of $57.9 million between 2018
                          and 2026. This growth alone is enough to support 1-2 new full-line supermarkets.

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4.3 Retail                  Introduction
hierarchy              68   Retail shopfront surveys were carried out in December 2018 for the townships within
                            the proposed Kilmore NAC’s catchment area as shown on Figure 8.

Figure 8—Supermarket competition in the Kilmore region

Source: Deep End Services; Mapinfo

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                    69   As set out in Table 4, the townships within the catchment are estimated to contain
                         29,509 sqm of occupied retail floorspace, of which 19,239 sqm is located within
                         Kilmore.
Table 4— Kilmore                                                                                    Floorspace (sqm)
region retail and                                                            NF &                                                               Total Vacant % of
                                                             FG&L                       Total retail     Non-retail           Vacant
non-retail               Town                                             Services                                                        floorspace         total
floorspace               Within catchment
estimates,               Kilmore                             8,356          10,883           19,239            5,110            1,620          25,969          6.2%
December 2018            Broadford                           2,325            3,045           5,370            1,250              400           7,020          5.7%
                         Lancefield                          1,245            1,825           3,070              250              200           3,520          5.7%
Source: Deep End         Wandong                             1,382             448            1,830              200                0           2,030          0.0%
Services                 Total catchment                    13,308          16,201           29,509            6,810            2,220          38,539          5.8%
                         Beyond catchment
                         Wallan                             10,574            4,809          15,383            2,760              150          18,293          0.8%
                         Heathcote                           3,773            3,017           6,790            1,450              320           8,560          3.7%
                         Total beyond                       14,347            7,826          22,173            4,210              470          26,853          1.8%
                         Total                              27,655          24,027           51,682           11,020            2,690          65,392          4.1%

                    70   Beyond the catchment area, floorspace surveys were also carried out at Wallan and
                         Heathcote. These towns contain an additional estimated 22,173 sqm of occupied
                         retail floorspace, with the majority located within Wallan (i.e. 15,383 sqm).
                    71   The occupied retail floorspace figures within some of these towns are higher than
                         the observations made in the August 2018 EIA, with my figures including local
                         hardware store operators which could account for the majority of the differences in
                         the smaller towns.
                    72   Furthermore, it is stated within the August 2018 EIA that the occupied retail
                         floorspace for Kilmore (i.e. 15,000 sqm) refers to retail facilities within the Kilmore
                         Town Centre only, however my observations include the commercial precincts to
                         the north and south of the main town centre precinct.
                    73   I also note that my estimated occupied retail floorspace for Kilmore aligns closely
                         with the observations made for Kilmore in a background report on economic
                         conditions prepared by Urban Enterprises, September 2015 version 1.2, as part of the
                         Am C123 exhibition and submissions process.
                         Kilmore
                    74   Retailing within Kilmore is concentrated along Sydney Street (Northern Highway)
                         between Clarke Street to the north and Bourke Street to the south.
                    75   Additional retail clusters are also located in commercial areas approximately 600
                         metres north and up to 1.5 km south of the main town centre strip, with these
                         locations containing some larger premises oriented towards large format retailing
                         and hardware uses.
                    76   The town contains two major supermarkets, a 2,860 sqm Coles and an adjoining
                         1,449 sqm ALDI, in a centre towards the northern end of the town centre.
                    77   Both supermarkets are less than 3,000 sqm in size and the provision of supermarket
                         floorspace is relatively low, accounting for approximately one quarter of overall
                         occupied retail floorspace.

                         Lascorp report - Mitchell Am C124 & Permit Application PLP 203-17 - Economic expert witness statement - Justin Ganly - 21   Deep End Services
                         Feb 19
31

78   The town has a range of food catering options, including a moderate level of
     takeaway retailers and dining options, particularly within hotels.
79   A very small Friendly Grocer food store is also located within the town centre.
80   Non-food and services account for 57% of all retail floorspace in Kilmore (i.e. 10,783
     sqm out of 19,019 sqm). Larger retailers in this category include Carpet Court and
     Pat Croke Furniture within the main town centre precinct as well as Mitre 10 and
     Saddleworld in precincts outside this area.
81   The town also contains a small range of non-retail tenancies such as banks, real
     estate agents and medical centres.
82   In general, retailing is dispersed along Sydney Street in low to moderate quality
     individual shopfront tenancies with an overall lack of national brand retailers.
83   Nevertheless, the observed vacancy rate for Kilmore was 6.3% in December 2016.
84   In my experience, vacancy rates in townships such as Kilmore generally range
     between 4% and 10% - as is the case within Melbourne although levels in the
     metropolitan area can break out as high as 18% - and the current figure indicates
     good health.
85   I also note that the EE Peer Review indicated a vacancy rate between 4% and 6%
     generally indicates good health.
     Other towns within the catchment area
86   The three other towns in the catchment – Broadford, Lancefield and Wandong –
     with each containing a small IGA supermarket.
87   The supermarkets range in size from an estimated 350 sqm at Lancefield to 880 sqm
     at Wandong.
88   None of these stores is close to a full-line supermarket offer and therefore would
     mainly serve only the top-up shopping needs of local residents.
89   The supermarkets are supported by a limited number of retail stores and services
     appropriate for the small local population bases.
90   A small number of vacant shopfronts were observed in Broadford and Lancefield,
     resulting in vacancy rate of approximately 6% for each, while no vacancies were
     observed at Wandong.
     Beyond catchment area
91   The most relevant competitive retail facilities beyond the catchment area are at
     Wallan, 15 km to the south of Kilmore.
92   Wallan contains three supermarkets – a 3,355 sqm Woolworths, a 1,520 sqm Coles
     and a 1,533 sqm ALDI. Combined, these supermarkets represent 42% of the town’s
     estimated occupied retail floorspace (i.e. 15,383 sqm).

     Lascorp report - Mitchell Am C124 & Permit Application PLP 203-17 - Economic expert witness statement - Justin Ganly - 21   Deep End Services
     Feb 19
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