Gepps Cross Discount Outlet Centre

Gepps Cross Discount Outlet Centre

Gepps Cross Discount Outlet Centre

Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment September 2016 FINAL REPORT

Gepps Cross Discount Outlet Centre

MacroPlan Dimasi MELBOURNE Level 4 356 Collins Street Melbourne VIC 3000 (03) 9600 0500 SYDNEY Level 4 39 Martin Place Sydney NSW 2000 (02) 9221 5211 BRISBANE Level 15 111 Eagle Street Brisbane QLD 4000 (07) 3221 8166 GOLD COAST Level 2 89 -91 Surf Parade Broadbeach QLD 4218 (07) 3221 8166 ADELAIDE Ground Floor 89 King William Street Adelaide SA 5000 (08) 8221 6332 PERTH Level 1 89 St Georges Terrace Perth WA 6000 (08) 9225 7200 Prepared for: Aretzis Group MacroPlan Dimasi staff responsible for this report: Tony Dimasi, Managing Director – Retail Ziggy Gelman, Consultant – Retail

Gepps Cross Discount Outlet Centre

Table of contents Executive summary i Introduction iii Section 1: Outlet centres in Australia 1 Section 2: Gepps Cross: Site attributes and Council DPA 5 2.1 Site attributes 5 2.2 Council DPA 8 Section 3: Competitive framework 11 Section 4: Trade area analysis 16 4.1 Drivetime analysis 16 4.2 Trade area definition 18 4.3 Trade area population 21 4.4 Trade area socio-demographic profile 23 4.5 Retail expenditure capacity 26 Section 5: Analysis of need and demand 30 5.1 Need and demand for outlet centre facilities in northern Adelaide 30 5.2 Indicative sales potential 31 5.3 Potential tenancy mix 34 Section 6: Assessment of economic benefits and likely impacts 40 6.1 Primary economic and social benefits 40 6.2 Employment stimulus 41 6.3 Estimated trading impacts 43 6.4 Additional considerations 47 6.5 Net community benefit 49 Section 7: Response to feedback on draft EIA 50 7.1 Minimum store size 50 7.2 Queries raised by peer review of draft EIA 52

Gepps Cross Discount Outlet Centre

Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment i Executive summary i. An opportunity exists to develop an outlet centre at Gepps Cross on a site fronting Main North Road, a short distance north of Grand Junction Road and with access from Port Wakefield Road. The site is highly visible and easily accessible, and will directly benefit from the adjacent Gepps Cross Homemaker Centre as well as a significant amount of passing traffic and the continued population growth in the region. It therefore has excellent attributes for an outlet centre development.

ii. An outlet centre at Gepps Cross will compete with both traditional shopping centres with significant apparel offerings and the Adelaide CBD, as well as the existing Harbour Town Adelaide. The high profile location of the Gepps Cross site, however, means that the proposed outlet centre would be well able to serve most of northern Adelaide. iii. An outlet centre at Gepps Cross would be very well placed to serve the majority of the northern region of Adelaide. The main trade area population is estimated at 658,600 people at 2015, including 251,200 residents within the primary sector. The main trade area population is estimated at around 732,800 by 2026, reflecting continued growth in the region.

Almost all of the existing population within the defined main trade area lives within a 20 minute drivetime of the site. iv. Apparel expenditure by the main trade area population, which is the main driver of outlet centre potential at the Gepps Cross site, is expected to increase from $730 million in 2015 to $858 million (in constant 2014/15 dollars) by 2026. v. An outlet centre of around 20,000 sq.m of floorspace is supportable at the Gepps Cross site, and would have excellent future growth prospects. Such a centre would need to be of sufficient critical mass and contain a strong mix of fashion retailers in order to deliver on the potential that is offered by the site.

Gepps Cross Discount Outlet Centre

Executive summary Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment ii vi. Potential sales for the Gepps Cross Discount Outlet Centre (DOC) are estimated at $127.2 million in 2018, reflecting a 10% market share of available apparel expenditure from the defined main trade area, which a well designed and well tenanted centre of 20,000 sq.m at the site should be able to achieve. vii. There are a number of significant economic and related social benefits that will flow directly from the development of the proposed outlet centre at Gepps Cross, including increased choice and convenience for residents of the trade area and substantial stimulus to employment throughout Adelaide.

viii. A number of large centres would be likely to be impacted, reflecting the broad region from which the Gepps Cross DOC would draw its business. All impacts however would be relatively minor to minimal, and would not threaten the ongoing viability of any centres. In fact, sales for the Adelaide CBD and the surrounding regional and sub- regional centres are projected to increase over the period from 2015 to 2018, even allowing for the proposed outlet centre at Gepps Cross in 2018. Harbour Town, which is expected to be the most significantly impacted following the development of the proposed outlet centre at Gepps Cross, is estimated to recover its sales volume within approximately 3 – 4 years, and will continue to trade successfully.

ix. The proposed discount outlet centre development at Gepps Cross would result in a substantial net community benefit. The centre would provide a popular and growing retail format which is currently not available in northern Adelaide, and would create a large number of new jobs. It would also help to attract tourist visitation to the Gepps Cross locality, while improving access to convenient shopping and increasing convenience for residents of the northern Adelaide region in particular. The likely impacts which can be expected from the development on the surrounding network of shopping and activity centres will be minor to minimal, due to the location of the site and the extensive region from which the sales of the new outlet centre will be drawn.

Gepps Cross Discount Outlet Centre

Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment iii Introduction This report presents an independent assessment of the economic issues relating to the development of a proposed discount outlet centre at Gepps Cross, in northern Adelaide. A draft Economic Impact Assessment (EIA) report was prepared by MacroPlan Dimasi in March 2016. This final version of the report addresses at Section 7 a number of queries that were raised in relation to the draft EIA. The report has been prepared in accordance with instructions received from Aretzis Group, and is structured as follows:  Section 1 discusses the evolution of outlet centres in Australia, and the role played by such centres within the total retail hierarchy.

 Section 2 addresses the site location, together with the context and attributes of the subject site, focused on those factors of most relevance for a successful outlet centre.  Section 3 reviews the competitive context within the broad northern region of Adelaide facing a prospective outlet centre at Gepps Cross, and also the outlet centre competition in metropolitan Adelaide more generally.  Section 4 reviews the potential trade area that will be served by an outlet centre at the Gepps Cross site. The current and projected population levels, the socio-demographic profiles and the spending levels of the trade area population are detailed.

 Section 5 provides an assessment of the need and demand for the proposed outlet centre, the supportable scale and timing as well as the likely sales potential for an outlet centre at the subject site.

 Section 6 details the likely economic and social benefits and impacts of an outlet centre development as proposed at Gepps Cross.  Section 7 addresses a number of queries that were raised in relation to the draft EIA.

Gepps Cross Discount Outlet Centre

Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 1 Section 1: Outlet centres in Australia The initial rationale for the development of outlet centres, and their primary reason for being, was to offer relatively low cost space for retailers to dispose of highly discounted stock which was no longer able/desired to be sold through their traditional (full price) retail outlets.

Because the stock is so highly discounted, and the gross profit margin on such stock is relatively low, the sustainability of the concept depends on retail outlets being able to pay rental levels for the space which are well below the levels that are paid in either sub-regional or regional centres – usually between half and two-thirds of such levels. Historically, outlet centres in the United States, where the format was born, were typically located outside major cities and targeted price-sensitive shoppers. This model has evolved significantly in Europe and the US over more recent years to meet customer demand for higher quality premium outlet centres.

As a consequence, more recent models of outlet centres feature much higher standards of design, with genuine designer/premium brands extensively represented in the mix, and a focus on dining/leisure, in order to create a destination that is visited for its own sake as much as it is visited for the shopping bargains which it offers.

The first outlet centre to open in Australia was DFO Moorabbin in 1997, located next to Moorabbin Airport approximately 20 km from the Melbourne CBD. The centre has been expanded over the years to include a more substantial food court and additional tenancies. At present in Australia there are some 20 outlet centres of significance, and their sales and rental performance levels vary significantly. DFO Homebush in Sydney sits at the top, being clearly the most successful outlet centre. Harbour Town Gold Coast is also very successful, although it is a ‘hybrid’ centre, containing some traditional retail elements, including a large supermarket and associated convenience shopping, as well as outlet retailing.

Gepps Cross Discount Outlet Centre

Section 1: Outlet centres in Australia Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 2 The dominant brand in outlet centre retailing in Australia at present is DFO – Direct Factory Outlets. Seven of the existing outlet centres within the country are operated under the DFO banner, and many of the largest and best performed centres are DFO centres, including DFO Homebush, DFO Essendon, DFO South Wharf in central Melbourne, DFO Brisbane Airport and DFO Moorabbin.

Over recent years, MacroPlan Dimasi has conducted numerous investigations of outlet centres across Australia, having reviewed most of the existing centres in Australia, as well as completing broad studies of the outlet centre industry in general.

On the basis of these studies, we have drawn the following conclusions, which can be considered a summary of the key success criteria and benchmark performance levels for the industry:  The total outlet centre industry in Australia comprises about 20 centres, which generate a combined turnover estimated at $1.5 billion, with an average trading level of $5,000 - $6,000 per sq.m, and an average turnover volume per centre of $90–$100 million. Sales volumes per centre range from less than $40 million to around $160 million, with seven centres achieving sales over $100 million in 2015.

 The outlet centre industry in Australia is therefore still very small, and accounts for only about 1% of total non-food retail sales in the country. In the USA, outlet malls account for approximately three times the market share of non-food retail sales which the sector achieves in Australia.  The key lesson, in our view, which can be learnt from the experience to date of outlet centre development in Australia, is that an outlet centre can only expect to succeed if it has good access to a large main trade area population. Outlet centres draw business thinly across broad regions, i.e. they attract a low market share of available expenditure and, therefore, require an extensive area from which to draw such a market share in order to generate a large enough sales volume to sustain the necessary critical mass of stores.

Section 1: Outlet centres in Australia Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 3 Two basic factors contribute to the low market shares of total available expenditure typically achieved by outlet centres, namely: - First, apart from a limited provision of food catering stores, most outlet centres are almost entirely focused on non-food retail expenditure, which accounts for about half of total retail expenditure. - Second, within the total non-food categories, outlet centres operate almost exclusively in the apparel segments, which typically generate 80%-90% of total centre sales.

Apparel expenditure, defined to include clothing and footwear (including sporting apparel), fashion accessories and jewellery, generally accounts for 25%-30% of total non-food retail expenditure, or 10%-15% of all retail expenditure.  Competition for such expenditure comes from CBD’s, regional centres, sub-regional centres and larger strips, including department stores, discount department stores, apparel mini-majors and apparel specialty stores at all of these centres. Therefore, outlet centres typically achieve low market shares of total available retail expenditure across any region.

 As a result, the most important requirement for a successful centre is good accessibility to an extensive regional population, translating to a large apparel expenditure pool. There are other essential requirements, discussed further below, but this first one is the most important.  Our analysis of trade areas served by Australia’s outlet centres indicates that for a successful outlet centre a main trade area population of 300,000 is typically required, and that a greater level, i.e. 400,000 plus, is highly desirable.

 Critical mass is the next requisite feature of successful outlet centres.

DFO Homebush, DFO Essendon, DFO Brisbane Airport, Harbour Town Perth and Harbour Town Gold Coast, are the most successful outlet centres, and are also generally among the largest, each being at least 17,000 sq.m in size.

Section 1: Outlet centres in Australia Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 4 Critical mass is necessary to ensure the centre can achieve a reasonable market share of the available expenditure pool – because outlet centres draw thinly across large areas, it follows that a ‘small’ outlet centre, lacking critical mass, is highly likely to trade poorly.  Accessibility is the third key element required for a successful outlet centre. If such a centre needs to draw business from an extensive region, then it must be reasonably accessible to the residents of such a broad region.

As detailed in the remainder of this report, the Gepps Cross site in northern Adelaide has the potential to meet all of the criteria required for a successful outlet centre, on the basis that an extensive and attractive outlet centre offer, with the necessary critical mass, will be delivered on site.

Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 5 Section 2: Gepps Cross: Site attributes and Council DPA 2.1 Site attributes Map 2.1 shows the location of the Gepps Cross Discount Outlet Centre (DOC) site within northern Adelaide and the surrounding regional context; while Map 2.2 illustrates the site within the surrounding local context.

Also shown on Map 2.1 are the major comparison shopping facilities throughout metropolitan Adelaide, in particular the regional and sub-regional shopping centres, the Adelaide CBD and the only existing outlet centre, Harbour Town at Adelaide Airport. The Gepps Cross site has all of the attributes that are considered necessary for the accommodation of a successful outlet centre. As is evident from both Maps 2.1 and 2.2, the site is situated between two major highways – Main North Road and Port Wakefield Road/Princes Highway – and is located less than 1 km from the intersection of Grand Junction Road.

Main North Road provides access between metropolitan Adelaide and the growth areas of Gawler and beyond to the north, while Port Wakefield Road is the major thoroughfare into and out of Adelaide to the north.

The site is also situated adjacent to an existing retail precinct, namely the Gepps Cross Homemaker Centre, which includes a large number of national retailers such as Harvey Norman and JB Hi-Fi Home. Approximately 36,000 cars travel along Main North Road daily within the vicinity of the site, with an additional 27,500 cars travelling past the site each day on Port Wakefield Road.

Map 2.1: Gepps Cross Regional context

Map 2.2: Gepps Cross Discount Outlet Centre Site location

Section 2: Gepps Cross: Site attributes and Council DPA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 8 The site is easily accessible to residents of all of the Adelaide metropolitan area, with some 960,000 people living within a 20 km radius.

Most of the additional population of Adelaide will be able to access the site within a 40 minute drivetime, while residents of the Barossa Valley can access it within approximately 45 minute drivetime and residents of the Clare Valley can drive to the site within approximately 90 minutes. The site therefore offers the opportunity to service an extensive trade area, in line with the most fundamental success criteria for outlet centres as outlined previously. The size of the site, and its frontage to Main North Road, mean that the physical delivery of a modern and attractive outlet centre, with appropriate critical mass, can be quite easily achieved.

2.2 Council DPA Figure 2.1 illustrates the plan for the broader site, which will see an expansion to the Metcash distribution centre to the south of the DOC site. Figure 2.2 details the layout of the proposed outlet centre, which will include 696 car spaces with a new intersection on Main North Road, as well as access to the site from Port Wakefield Road via the rear of the centre. A possible expansion area is also detailed to the rear of the centre. The discount outlet centre is planned to provide 20,000 sq.m of gross leasable area, and as is typical of such centres will accommodate a wide range of outlet shopping, including designer stores, as well as supporting cafés and food & beverage options.

It is expected to incorporate in the order of 80 to 100 tenancies.

In accordance with the requirements of the Council DPA, this report provides a retail economics study which addresses supply and demand; gaps within the market both spatially and in terms of this particular mode of retailing (i.e. outlet centre retailing); and the economic benefits (for consumers in particular), as well as any likely impacts on existing centres, that can be expected from the development.

Figure 2.1

Figure 2.2

Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 11 Section 3: Competitive framework Factory outlet centres are dominated by apparel retailing, and compete both with traditional shopping centres with significant apparel offerings as well as with other factory outlet centres.

Table 3.1 lists the regional and sub-regional centres in northern Adelaide, as well as the Adelaide CBD and the only other outlet centre located in Adelaide. The previous Map 2.1 illustrates the locations of these centres in the surrounding area. Outlet centres in Adelaide At present there is only one outlet centre provided in Adelaide – Harbour Town at Adelaide Airport. This is a successful centre, which contains approximately 30,000 sq.m of outlet retail floorspace. The only ‘anchor’ store at the outlet centre is a Woolworths supermarket situated at the northern end of the centre, while high profile brands which are represented include:  Cue  Cotton On  Oroton  Kathmandu  Adairs Outlet  Wittner  Adidas Outlet  Sunglass Hut  Bonds Outlet  Sheridan  Bed Bath N Table  Lorna Jane  Royal Doulton  Chemist Warehouse  Pumpkin Patch Harbour Town has operated successfully since opening in 2003, and is located approximately 19 km from the Gepps Cross site.

Harbour Town is ideally situated to serve southern Adelaide, whereas a new outlet centre at Gepps Cross would very effectively serve northern and central Adelaide. Quite clearly, at present, there is a readily evident spatial gap in the representation of outlet centres in Adelaide, with the only such centre being located in the southern part of the metropolitan area, adjacent to Adelaide Airport.

Section 3: Competitive framework Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 12 Retail Dist. by road from Centre GLA Major traders Gepps Cross DOC (sq.m) (km) Outlet centres Harbour Town 30,000 Outlet retailers 19.2 Adelaide CBD 300,000 Myer, David Jones, Harris Scarfe, 10.1 Target, Kmart Regional centres Westfield Tea Tree Plaza 85,000 Myer, Big W, Target, Kmart, Harris Scarfe 9.9 Westfield West Lakes 65,900 David Jones, Target, Kmart, Harris Scarfe 15.1 Elizabeth Shopping Centre 64,000 Target, Big W, Harris Scarfe 16.5 Sub-regional centres - northern Adelaide Mawson Central 12,000 Target 4.5 Sefton Plaza 12,500 Target 4.5 Churchill Centre 33,000 Kmart, Costco 4.5 Ingle Farm SC 26,700 Kmart 6.5 Arndale Central 29,700 Big W, Harris Scarfe 8.9 Newton Plaza 13,600 Target 10.0 Port Canal 18,000 Kmart 10.0 Hollywood Plaza 23,500 Target 11.4 Parabanks SC 20,000 Big W, Harris Scarfe 11.4 Brickworks Marketplace 17,000 Big W 11.8 Golden Grove Village 26,600 Big W 12.9 Munno Para Shopping Centre 33,100 Kmart 19.9 Gawler 15,000 Big W, Target 31.2 Proposed developments - northern Adelaide Parafield Airport FOC 20,000 Outlet retailers 6.8 Salisbury South Mixed Use n.a Retail, leisure and entertainment facilities 6.9 Playford Alive Town Centre 16,500 Woolworths 22.7 Source: Property Council of Australia; MacroPlan Dimasi Table 3.1 Gepps Cross DOC - schedule of competing retail facilities

Section 3: Competitive framework Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 13 Adelaide CBD The Adelaide CBD contains approximately 300,000 sq.m of retail floorspace, anchored by three large department stores – Myer, David Jones and Harris Scarfe – and supported by a very extensive provision of specialty apparel and other non-food retailing, plus a wide range of food and beverage retailing. All of the national apparel brands are represented within the CBD, which has historically been one of the most successful CBDs of Australia’s state capital cities.

The Adelaide CBD is situated 10 km from the Gepps Cross site.

Regional centres Westfield Tea Tree Plaza is the largest regional centre in northern Adelaide, and is located almost 10 km to the east of the Gepps Cross site. It is a large, successful regional centre, comprising approximately 85,000 sq.m of retail floorspace, anchored by a Myer department store; Big W, Target and Kmart discount department stores (dds); and a smaller Harris Scarfe department store. It contains some 190 specialty stores, of which 70 are apparel retailers, so it provides the most extensive apparel shopping offer in the northern suburbs of Adelaide. An expansion plan has been mooted for the centre, which would include an expansion of Big W and over 13,500 sq.m of additional retail floorspace; however, plans have not yet been confirmed and we understand the project is currently deferred.

Westfield West Lakes is situated 15 km to the south-west of the Gepps Cross site, and is anchored by David Jones, Target, Kmart and Harris Scafe. The centre contains over 200 specialty stores, including a wide range of apparel stores, with a total retail floorspace of approximately 65,900 sq.m. Elizabeth City Centre is situated around 16 km to the north-east of the Gepps Cross site. This centre has only Target and Big W discount department stores as its anchor stores, as well as a Harris Scarfe. Elizabeth City Centre contains some 190 specialty stores, including a wide range of apparel stores.

Section 3: Competitive framework Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 14 The ‘30 Year Plan for Greater Adelaide’ also designates the Port Adelaide Centre as a ‘Regional Activity Centre’. The main facilities located within the retail core include Port Canal SC, which is anchored by a Kmart dds and Coles and Rite Price supermarkets and includes approximately 18,000 sq.m of retail floorspace (over two detached buildings), and Port Mall, a 6,500 sq.m centre anchored by a Foodland supermarket. Both centres contain a large proportion of vacancies and the retail core as a whole is seen as contain a poor offering which is disconnected from the Port Adelaide Centre.

Sub-regional centres The remaining relevant competitive facilities throughout the northern suburbs of Adelaide are sub-regional centres anchored by discount department stores. The largest are Munno Para SC, located approximately 20 km to the north-east of the Gepps Cross site and anchored by a Kmart discount department store; Churchill Centre, located 4.5 km south-east of the Gepps Cross site and anchored by a Kmart dds and Costco; and Arndale Central, situated some 9 km to the south-west of the Gepps Cross site. The closest sub-regional centre competitors are Mawson Central, Sefton Park and Churchill Centre, which are all located around 4.5 km from the subject site.

Future facilities The Parafield Airport Master Plan, prepared by Parafield Airport Limited, was approved by the Federal Minister for Infrastructure and Transport in November 2012. The Master Plan sets out a planning framework for Parafield Airport over the next 20 years, within the context of the airport’s ultimate development potential. The Master Plan, amongst other things, details a proposal for a 20,000 sq.m Brand Outlet Centre development near the south-western corner of Main North Road and Kings Road, approximately 7 km north-east of the Gepps Cross Site. No plans or further details have been publicly released.

An entertainment and shopping centre complex is planned on the northern corner of Main North Road and Kings Road in Salisbury South, approximately 7 km north-east of the Gepps Cross site. This facility is expected to incorporate a wide shopping offer, including specialty fashion stores and larger retailers, together with a large entertainment and leisure complex,

Section 3: Competitive framework Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 15 including water slides, indoor trampoline and skydiving, laser skirmish, tenpin bowling, a games arcade, rock climbing and a cinema. While the site has been rezoned for these new uses to occur, no application for development has been lodged or considered, and it is unclear when the development will go ahead. A new town centre is proposed at Playford Alive, approximately 23 km north-west of the Gepps Cross site, which will be developed in two stages. The first stage, containing a Woolworths supermarket and supporting specialty stores, is under construction and is expected to open in February 2016.

The second stage of development is mooted to add a discount department store and further supporting specialty floorspace, but might not eventuate for some years, given a much more conservative approach to new store locations taken by discount department store operators in recent times.

Summary Overall, the extensive northern region of Adelaide offers an ideal opportunity for the introduction of a new outlet centre. The most relevant competitive facilities are all situated substantial distances from the Gepps Cross site – Harbour Town at Adelaide Airport, Adelaide CBD, Westfield Tea Tree Plaza and Elizabeth Shopping Centre – and the site is centrally located, highly visible and very easily accessible for residents of northern Adelaide as well as the Gawler and Barossa Valley regions further north.

Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 16 Section 4: Trade area analysis This section of the report details the 20 and 30 minute drivetime boundaries as well as the trade area that would be served by the proposed outlet centre development at Gepps Cross.

The outlook for population and retail expenditure growth in the trade area are detailed, together with the socio-demographic profile of trade area residents. 4.1 Drivetime analysis The Gepps Cross DOC site is generally easily accessible to residents of the entire Adelaide metropolitan area as well as areas beyond to the north, including Gawler and the Barossa Valley. However, the strategic location of the site is further emphasised by the available resident population within a relatively short drivetime of the site. Map 4.1 illustrates the 20 and 30 minute drivetime boundaries from the subject site, highlighting the following:  The 20 minute drivetime boundary encompasses the majority of the northern suburbs of Adelaide and includes the CBD.

 The 30 minute drivetime boundary extends to the growth areas of Gawler and Two Wells to the north and around 5 km south of the CBD.  At 2015, the estimated 20 minute drivetime population was 651,300 people, while the 30 minute drivetime population was estimated at approximately 878,600 people.  By 2026, following planned growth within the new residential development areas of the northern Adelaide region and some growth in the established suburbs, the population within 20 minutes’ drive from the site is estimated at approximately 725,000 people. The population within 30 minutes’ drive of the subject site is estimated to increase to almost one million people by that date.

Map 4.1: Gepps Cross Discount Outlet Centre 20 and 30 minutes drivetime boundaries

Section 4: Trade area analysis Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 18 4.2 Trade area definition The extent of the trade area or catchment for any shopping centre or retail precinct is shaped by a number of key factors, as follows:  The most important factor impacting on the trade area of any particular centre is the scale and composition of the centre, and particularly the major trader (or traders) that are included within it.

The layout and ambience/atmosphere of the centre, as well as the amount and quality of carparking, also determine the strength and attraction of a particular retail facility.

 The available road network and public transport system are also important factors impacting on the relative attractiveness of any retail facility, as they affect the ease of access to the centre.  The proximity and attraction of competitive retail facilities also have an influence on a particular centre’s trade area. The locations, compositions, quality and scale of competitive centres in the region therefore impact on the extent of the trade area which a centre is effectively able to serve.  Significant physical barriers (e.g. freeways, rivers and railways) which are difficult to negotiate or which take considerable time to cross can often act to delineate the boundaries of the trade areas that are able to be served by specific centres.

Taking the above into account, the trade area for a prospective DOC at the Gepps Cross site will be influenced in particular by the following:  the high profile location of the site, situated on Main North Road, a primary arterial road connecting the Adelaide CBD to the northern suburbs, with access from Port Wakefield Road and near the corner of Grand Junction Road, and its consequent visibility and regional accessibility;  the surrounding road network which provides easy and straightforward access to the site for surrounding residents;

Section 4: Trade area analysis Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 19  the range of retail facilities provided at higher-order centres in the surrounding region, particularly at Westfield Tea Tree Plaza and the Adelaide CBD; and  the location of the closest competing outlet centre, namely Harbour Town at Adelaide Airport, as well as the proposed outlet centre at Parafield Airport. There are no outlet centres in northern Adelaide, with the only existing outlet centre in Adelaide located approximately 30 km away, at Adelaide Airport.

An outlet centre is, however, mooted at Parafield Airport, approximately 7 km to the north-east. The trade area that will be served by the proposed outlet centre at the Gepps Cross site, therefore, reflects the situation outlined above, i.e. the absence of outlet centres in northern Adelaide. Map 4.2 illustrates the potential trade area for an outlet centre at the Gepps Cross site, defined to comprise a primary sector, three secondary sectors and a tertiary sector, as follows:  The primary sector is generally bounded by the suburb of Parafield to the north, Payneham Road and the Tea Tree Gully Council area to the east, North Terrace to the south and Port Road to the west.

 The secondary north sector encompasses the northern areas of Adelaide.  The secondary east sector extends east to the urban boundary of central Adelaide.  The secondary west sector extends west of Port Road and is bounded by Bower Road to the north and Grange Road to the south.  The tertiary sector encompasses the area to the north of metropolitan Adelaide, including Gawler, and includes the Barossa Valley wine region. The primary and secondary sectors, in combination, are referred to throughout the remainder of this report as the main trade area, which is the key catchment area for a potential outlet centre at Gepps Cross.

Given the lack of outlet centre facilities in northern Adelaide, such a centre would also serve residents from beyond the metropolitan area. The total trade area is referred to as the combination of the main trade area and the tertiary sector.

Map 4.2: Gepps Cross Discount Outlet Centre Trade area and competition

Section 4: Trade area analysis Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 21 In addition to this trade area, an outlet centre at Gepps Cross would also draw some business from the remainder of the Adelaide metropolitan area, as well as from areas further afield, including for example, the Clare Valley to the north-west, and also from visitors to Adelaide and South Australia. Being situated on the main access route from central Adelaide to the Barossa Valley, the development will be particularly attractive to the many visitors who travel between these two South Australian destinations.

The 20 minute and 30 minute drivetime contours around the Gepps Cross site are also shown on Map 4.2 previously, and highlight the fact that almost all of the existing population within the defined main trade area lives within a 20 minute drivetime of the site. 4.3 Trade area population Table 4.1 details the recent and projected population levels for each sector of the trade area. At 2015, the main trade area population is estimated at 658,610 people, including 251,170 residents within the primary sector. The total trade area population is estimated at 733,040 people at this time.

The trade area population has grown strongly in recent years, at an average growth rate of 1.4% per annum between 2006 and 2011, compared to 1% per annum growth recorded for Greater Adelaide.

There is a large amount of land available for further residential development in northern Adelaide, particularly within the suburbs of Playford North, Buckland Park, Two Wells, Gawler and Roseworthy. This land will sustain substantial continuing population growth over the next 20 years in the secondary north sector and beyond, the residents of which will be particularly likely to utilise the proposed outlet retailing at the Gepps Cross site. Trade area population growth overall is expected to continue to be strong over the forecast period, with the population of the main trade area projected to reach around 732,800 people by 2026, including around 280,400 residents in the primary sector at that date.

The population of the total trade area is projected to reach 831,700 residents by that time. Growth over the period to 2026 is projected to average 1.2% per annum.

Section 4: Trade area analysis Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 22 Trade area sector 2006 2011 2015 2018 2021 2026 Primary 219,990 238,370 251,170 259,570 267,370 280,370 Secondary sectors • North 189,950 207,640 221,640 232,140 241,140 256,140 • East 124,480 126,780 129,180 130,980 132,180 134,180 • West 52,670 54,620 56,620 58,120 59,620 62,120 Total secondary 367,100 389,040 407,440 421,240 432,940 452,440 Main trade area 587,090 627,410 658,610 680,810 700,310 732,810 Tertiary 65,420 70,430 74,430 78,930 86,430 98,930 Total trade area 652,510 697,840 733,040 759,740 786,740 831,740 Trade area sector 2006-11 2011-15 2015-18 2018-21 2021-26 Primary 3,676 3,200 2,800 2,600 2,600 Secondary sectors • North 3,538 3,500 3,500 3,000 3,000 • East 460 600 600 400 400 • West 390 500 500 500 500 Total secondary 4,388 4,600 4,600 3,900 3,900 Main trade area 8,064 7,800 7,400 6,500 6,500 Tertiary 1,002 1,000 1,500 2,500 2,500 Total trade area 9,066 8,800 8,900 9,000 9,000 Trade area sector 2006-11 2011-15 2015-18 2018-21 2021-26 Primary 1.6% 1.3% 1.1% 1.0% 1.0% Secondary sectors • North 1.8% 1.6% 1.6% 1.3% 1.2% • East 0.4% 0.5% 0.5% 0.3% 0.3% • West 0.7% 0.9% 0.9% 0.9% 0.8% Total secondary 1.2% 1.2% 1.1% 0.9% 0.9% Main trade area 1.3% 1.2% 1.1% 0.9% 0.9% Tertiary 1.5% 1.4% 2.0% 3.1% 2.7% Total trade area 1.4% 1.2% 1.2% 1.2% 1.1% *As at June Source: ABS Census 2011; Forecast.id; MacroPlan Dimasi Average annual growth (%) Average annual growth (no.) Table 4.1 Gepps Cross DOC trade area population, 2006-2026* Forecast population Estimated population

Section 4: Trade area analysis Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 23 4.4 Trade area socio-demographic profile Table 4.2 and Chart 4.1 summarise the socio-demographic profile of Gepps Cross DOC trade area residents, based on the results of the 2011 Census of Population and Housing. The key highlights from this information are summarised below:  Per capita income levels earned by trade area residents are slightly lower than the metropolitan Adelaide benchmark.

 There is an average of 2.5 persons per household in the main trade area, compared with an average of 2.4 across metropolitan Adelaide.

 The average age of the trade area population is slightly lower than the metropolitan Adelaide benchmark, reflecting the higher than average proportion of young children and lower proportion of residents aged over 50 years in the trade area.  Home ownership levels within the trade area are broadly comparable to the metropolitan Adelaide average, however with lower than average levels in the primary sector and higher than average levels in the tertiary sector.

 There is a slightly lower than average proportion of Australian born residents in the main trade area, with the primary sector containing a larger than average proportion of Asian born residents.  The main trade area contains average proportions of traditional families (i.e. households comprising couples with dependent children) and lone person households. In general, the population of the defined main trade area is broadly similar in terms of socio- demographic profile to the total metropolitan Adelaide population. The age distribution is very comparable, as are the ethnic profile, the family structure and the patterns of home ownership.

Average income levels are a little below the Adelaide metropolitan benchmark for this population, particularly in the northernmost part of the main trade area, which accommodates primarily young families and first home buyers.

Section 4: Trade area analysis Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 24 Primary Secondary Main Tertiary Total Adel Metro Census item sector sector TA sector TA avg. Per capita income $31,375 $29,109 $29,976 $29,800 $29,957 $32,438 Var. from Adel Metro benchmark -3.3% -10.3% -7.6% -8.1% -7.6% Avg. household income $75,051 $72,536 $73,522 $76,679 $73,845 $77,851 Var. from Adel Metro benchmark -3.6% -6.8% -5.6% -1.5% -5.1% Avg. household size 2.4 2.5 2.5 2.6 2.5 2.4 Age distribution (% of population) Aged 0-14 16.9% 18.9% 18.1% 20.0% 18.3% 17.7% Aged 15-19 6.1% 6.8% 6.6% 7.2% 6.6% 6.6% Aged 20-29 15.5% 14.0% 14.6% 10.6% 14.2% 14.1% Aged 30-39 14.4% 13.0% 13.6% 11.5% 13.3% 13.1% Aged 40-49 13.9% 14.2% 14.1% 15.6% 14.2% 14.2% Aged 50-59 12.4% 12.6% 12.6% 14.5% 12.8% 13.1% Aged 60+ 20.7% 20.4% 20.5% 20.7% 20.5% 21.3% Average age 38.9 38.2 38.5 38.8 38.5 39.1 Housing status (% of households) Owner (total) 63.7% 70.1% 67.6% 79.4% 68.9% 69.7% • Owner (outright) 30.4% 30.5% 30.5% 34.9% 31.0% 32.3% • Owner (with mortgage) 33.3% 39.6% 37.2% 44.5% 37.9% 37.4% Renter 35.1% 28.5% 31.1% 19.2% 29.8% 28.8% Other 1.2% 1.4% 1.3% 1.3% 1.3% 1.5% Birthplace (% of population) Australian born 68.1% 73.2% 71.3% 83.1% 72.5% 73.5% Overseas born 31.9% 26.8% 28.7% 16.9% 27.5% 26.5% • Asia 13.5% 6.6% 9.2% 1.4% 8.4% 7.4% • Europe 13.8% 16.6% 15.5% 14.0% 15.4% 15.2% • Other 4.5% 3.7% 4.0% 1.5% 3.7% 3.9% Family type (% of households) Couple with dep't children 40.3% 41.5% 41.0% 46.4% 41.6% 42.2% Couple with non-dep't child.

7.0% 8.5% 7.9% 8.3% 8.0% 7.6% Couple without children 22.8% 22.5% 22.6% 25.1% 22.9% 23.6% One parent with dep't child. 10.1% 11.1% 10.7% 7.9% 10.4% 9.4% One parent w non-dep't child. 4.2% 4.1% 4.2% 2.5% 4.0% 3.7% Other family 1.6% 1.1% 1.3% 0.5% 1.2% 1.2% Lone person 13.9% 11.1% 12.2% 9.3% 11.9% 12.2% Source: ABS Census of Population & Housing, 2011; MacroPlan Dimasi Table 4.2 Gepps Cross DOC total trade area - socio-demographic profile, 2011

Section 4: Trade area analysis Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 25 Source: ABS Census of Population & Housing, 2011; MacroPlan Dimasi Chart 4.1 Gepps Cross DOC main trade area - socio-demographic profile, 2011 18% 7% 15% 14% 14% 13% 21% 18% 7% 14% 13% 14% 13% 21% 19% 7% 14% 14% 14% 13% 20% 0% 5% 10% 15% 20% 25% Aged 0-14 Aged 15-19 Aged 20-29 Aged 30-39 Aged 40-49 Aged 50-59 Aged 60+ Age distribution Gepps Cross DOC MTA Adel Metro Aust. Avg. 71% 29% 73% 27% 74% 26% 0% 20% 40% 60% 80% Australian Born Overseas Born Country of birth Gepps Cross DOC MTA Adel Metro Aust.

Avg. 41% 8% 23% 11% 4% 12% 42% 8% 24% 9% 4% 12% 45% 8% 23% 9% 4% 10% 0% 10% 20% 30% 40% 50% Couple with dependent children Couple with non- dependent children Couple without children One parent with dependent children One parent with non-dependent children Lone person Family type Gepps Cross DOC MTA Adel Metro Aust. Avg. $29,976 $73,522 $32,438 $77,851 $34,467 $88,205 $0 $20,000 $40,000 $60,000 $80,000 $100,000 Per capita income Avg. household income Income levels Gepps Cross DOC MTA Adel Metro Aust. Avg.

Section 4: Trade area analysis Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 26 4.5 Retail expenditure capacity Chart 4.2 illustrates the estimated per capita retail expenditure levels for the main trade area population, benchmarked against the respective Adelaide metropolitan and Australian national averages. All spending figures in this report include GST. *Including GST Source: MarketInfo; MacroPlan Dimasi Chart 4.2 Gepps Cross DOC main trade area - retail spending per person, 2014/15* 6,979 4,996 11,976 7,193 5,374 12,567 7,748 5,844 13,591 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 Total Food Total Non-food Total Retail Total retail Gepps Cross DOC MTA Adel Metro Aust.

Avg. 1,958 2,983 624 1,414 2,034 2,983 668 1,509 2,135 3,134 769 1,710 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Fresh Food Other Food & Groceries Packaged Liquor Food Catering Food Gepps Cross DOC MTA Adel Metro Aust. Avg. 1,115 2,039 585 926 331 1,211 2,180 634 984 364 1,343 2,407 655 1,043 395 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 Apparel Household Goods Leisure General Retail Retail Services Non-food Gepps Cross DOC MTA Adel Metro Aust. Avg.

Section 4: Trade area analysis Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 27 The estimated retail expenditure capacity of the main trade area population is calculated utilising per capita expenditure data sourced from MarketInfo, which is developed by Market Data Systems (MDS) and utilises a detailed micro simulation model of household expenditure behaviour for all residents of Australia. The model takes into account information from a wide variety of sources including the regular ABS Household Expenditure Surveys, national accounts data, Census data and other information.

The MarketInfo estimates for spending behaviour prepared independently by MDS are commonly used by all parties in Economic Impact Assessments.

Retail expenditure levels per capita of main trade area residents are slightly below the respective Adelaide averages, reflecting the lower per capita income levels. Total per capita retail expenditure for main trade area residents is estimated at $11,976 for 2014/15, approximately 4.7% below the Adelaide metropolitan average. Table 4.3 presents projections of total retail spending of the main trade area residents over the period from 2015 to 2026. All spending forecasts are expressed in constant 2014/15 dollars (i.e. excluding inflation) and including GST. The retail spending capacity of the total trade area population is projected to increase from $8.8 billion to $10.9 billion over the forecast period, reflecting average annual real growth of 2%.

Avg. ann. growth Trade area 2015 2018 2021 2026 ($M) (%) Primary 3,031 3,204 3,385 3,719 63 1.9% Secondary sectors • North 2,472 2,647 2,823 3,141 61 2.2% • East 1,644 1,703 1,763 1,874 21 1.2% • West 693 727 764 834 13 1.7% Total secondary 4,809 5,077 5,350 5,850 95 1.8% Main trade area 7,839 8,282 8,735 9,569 157 1.8% Tertiary 924 999 1,115 1,338 38 3.4% Total trade area 8,764 9,280 9,850 10,907 195 2.0% *Constant 2014/15 dollars & including GST Source: MarketInfo; MacroPlan Dimasi Table 4.3 Gepps Cross DOC trade area - retail expenditure ($M), 2015-2026* Forecast retail spend ($M)

Section 4: Trade area analysis Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 28 Table 4.4 presents the total trade area expenditure for each retail category over the forecast period to 2026, while Table 4.5 details the apparel spending of each trade area sector population, which is by far the most important category for outlet centres, as previously outlined in Section 1 of this report.

Year ending FLG Food Apparel Household Leisure General Retail Total June catering goods retail services retail 2015 4,070 1,026 812 1,502 429 683 241 8,764 2016 4,153 1,051 825 1,529 436 694 246 8,934 2017 4,236 1,076 838 1,557 442 705 251 9,105 2018 4,321 1,102 851 1,585 449 716 256 9,280 2019 4,410 1,128 865 1,614 457 728 261 9,462 2020 4,501 1,156 879 1,644 464 740 266 9,651 2021 4,598 1,185 894 1,676 472 753 272 9,850 2022 4,697 1,215 910 1,709 481 766 277 10,055 2023 4,797 1,246 925 1,741 489 779 283 10,260 2024 4,899 1,277 941 1,775 497 793 289 10,471 2025 5,004 1,309 957 1,809 506 807 295 10,686 2026 5,111 1,342 973 1,844 514 821 301 10,907 Average annual growth ($M) 2015-2026 95 29 15 31 8 13 5 195 Average annual growth (%) 2015-2026 2.1% 2.5% 1.7% 1.9% 1.7% 1.7% 2.1% 2.0% *Constant 2014/15 dollars & including GST Source: MarketInfo; MacroPlan Dimasi Table 4.4 Gepps Cross DOC total trade area - retail expenditure by category ($M), 2015-2026* Retail expenditure category definitions:  FLG: take-home food and groceries, as well as packaged liquor.

 Food catering: expenditure at cafes, take-away food outlets and restaurants.  Apparel: clothing, footwear, fashion accessories and jewellery.  Household goods: giftware, electrical, computers, furniture, homewares and hardware goods.  Leisure: sporting goods, music, DVDs, computer games, books, newspapers & magazines, stationery and photography equipment.

 General retail: pharmaceutical goods, cosmetics, toys, florists, mobile phones and pets.  Retail services: hair & beauty, optical goods, dry cleaning, key cutting and shoe repairs.

Section 4: Trade area analysis Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 29 In 2015, total apparel expenditure generated by the main trade area population is estimated at $730 million. Apparel expenditure is projected to increase to $858 million over the period to 2026, with growth estimated at 1.5% annually over the period.

Apparel expenditure generated by residents of the primary sector is expected to increase from $289 million to $342 million over the forecast period.

Avg. ann. growth Trade area 2015 2018 2021 2026 ($M) (%) Primary 289 303 317 342 4.8 1.5% Secondary sectors • North 216 229 242 265 4.4 1.9% • East 160 164 169 176 1.5 0.9% • West 65 67 70 75 1.0 1.4% Total secondary 441 461 480 516 6.8 1.4% Main trade area 730 763 797 858 11.7 1.5% Tertiary 82 88 97 115 3.0 3.1% Total trade area 812 851 894 973 14.6 1.7% *Constant 2014/15 dollars & including GST Source: MarketInfo; MacroPlan Dimasi Table 4.5 Gepps Cross DOC trade area - apparel expenditure ($M), 2015-2026* Forecast retail spend ($M)

You can also read