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                                  SYDNEY
Level 4                                    Level 4
356 Collins Street                         39 Martin Place
Melbourne VIC 3000                         Sydney NSW 2000
(03) 9600 0500                             (02) 9221 5211
BRISBANE                                   GOLD COAST
Level 15                                   Level 2
111 Eagle Street                           89 -91 Surf Parade
Brisbane QLD 4000                          Broadbeach QLD 4218
(07) 3221 8166                             (07) 3221 8166
ADELAIDE                                   PERTH
Ground Floor                               Level 1
89 King William Street                     89 St Georges Terrace
Adelaide SA 5000                           Perth WA 6000
(08) 8221 6332                             (08) 9225 7200




Prepared for: 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
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.




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Gepps Cross Discount Outlet Centre
Executive summary




 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.




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Gepps Cross Discount Outlet Centre
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.




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Gepps Cross Discount Outlet Centre
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.




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                                          Proposed outlet centre development: Economic Impact Assessment
Gepps Cross Discount Outlet Centre
Section 1: Outlet centres in Australia




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.




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Section 1: Outlet centres in Australia




   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.




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                                            Proposed outlet centre development: Economic Impact Assessment
Section 1: Outlet centres in Australia




   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.




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                                            Proposed outlet centre development: Economic Impact Assessment
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.




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                                         Proposed outlet centre development: Economic Impact Assessment
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




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.




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                                          Proposed outlet centre development: Economic Impact Assessment
Figure 2.1
Figure 2.2
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.




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Section 3: Competitive framework




                                                           Table 3.1
                            Gepps Cross DOC - schedule of competing retail facilities

                                    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




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Section 3: Competitive framework




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.




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Section 3: Competitive framework




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,




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                                         Proposed outlet centre development: Economic Impact Assessment
Section 3: Competitive framework




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.




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                                         Proposed outlet centre development: Economic Impact Assessment
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.




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Map 4.1: Gepps Cross Discount Outlet Centre
20 and 30 minutes drivetime boundaries
Section 4: Trade area analysis




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;




                                                                     Gepps Cross Discount Outlet Centre
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                                            Proposed outlet centre development: Economic Impact Assessment
Section 4: Trade area analysis




 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.




                                                                   Gepps Cross Discount Outlet Centre
                                                                                                              19
                                          Proposed outlet centre development: Economic Impact Assessment
Map 4.2: Gepps Cross Discount Outlet Centre
Trade area and competition
Section 4: Trade area analysis




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.




                                                                    Gepps Cross Discount Outlet Centre
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                                           Proposed outlet centre development: Economic Impact Assessment
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                                                         Table 4.1
                             Gepps Cross DOC trade area population, 2006-2026*

                                   Estimated population                            Forecast population
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

                                                                Average annual growth (no.)
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

                                                                 Average annual growth (%)
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




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                                                      Proposed outlet centre development: Economic Impact Assessment
Section 4: Trade area analysis




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.




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                                          Proposed outlet centre development: Economic Impact Assessment
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                                                       Table 4.2
                     Gepps Cross DOC total trade area - socio-demographic profile, 2011

                                     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




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                                                     Proposed outlet centre development: Economic Impact Assessment
Section 4: Trade area analysis




                                                                       Chart 4.1
                          Gepps Cross DOC main trade area - socio-demographic profile, 2011


                                                                      Age distribution
   25%
                                                                                                                                         21%
                        19%                                           Gepps Cross DOC MTA              Adel Metro         Aust. Avg. 21%    20%
   20%      18%
                  18%
                                                     15%                                     14% 14% 14%
                                                           14% 14%      14%         14%
   15%                                                                        13%                                13% 13% 13%

   10%                         7%
                                     7%    7%

    5%

    0%
             Aged 0-14            Aged 15-19         Aged 20-29          Aged 30-39            Aged 40-49         Aged 50-59           Aged 60+




$100,000
                                                                      Income levels
                                                                                                                                $88,205
                               Gepps Cross DOC MTA              Adel Metro      Aust. Avg.      $73,522         $77,851
 $80,000

 $60,000
                                                           $34,467
 $40,000                $29,976           $32,438

 $20,000

     $0
                                   Per capita income                                                    Avg. household income



                                                                       Country of birth
   80%                   71%              73%                74%

                                                                                     Gepps Cross DOC MTA               Adel Metro         Aust. Avg.
   60%


   40%                                                                                           29%
                                                                                                                 27%             26%

   20%


    0%
                                    Australian Born                                                         Overseas Born



                                                                       Family type
   50%                   45%
            41% 42%
                                          Gepps Cross DOC MTA              Adel Metro          Aust. Avg.
   40%

   30%                                                       23% 24% 23%

   20%                                                                                                                           12%
                                                                                    11%                                                12% 10%
                                    8%                                                    9%      9%
                                          8%    8%
   10%                                                                                                       4% 4%        4%

    0%
              Couple with      Couple with non-             Couple without       One parent with            One parent with         Lone person
           dependent children dependent children               children         dependent children          non-dependent
                                                                                                               children


Source: ABS Census of Population & Housing, 2011; MacroPlan Dimasi




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                                                                     Proposed outlet centre development: Economic Impact Assessment
Section 4: Trade area analysis




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.

                                                                       Chart 4.2
                          Gepps Cross DOC main trade area - retail spending per person, 2014/15*



                                                                   Total retail
$16,000
                                           Gepps Cross DOC MTA                 Adel Metro          Aust. Avg.                                   13,591
$14,000
                                                                                                                      11,976     12,567
$12,000
$10,000
                                          7,748
 $8,000          6,979           7,193
                                                                    4,996                  5,844
 $6,000                                                                         5,374

 $4,000
 $2,000
      $0
                           Total Food                                       Total Non-food                                      Total Retail




                                                                   Food
 $3,500
                                                   2,983             3,134              Gepps Cross DOC MTA                   Adel Metro             Aust. Avg.
                                                           2,983
 $3,000

 $2,500                           2,135
              1,958      2,034
 $2,000                                                                                                                                              1,710
                                                                                                                                1,414     1,509
 $1,500

 $1,000                                                                                   624                  769
                                                                                                   668
  $500

      $0
                   Fresh Food                     Other Food & Groceries                   Packaged Liquor                         Food Catering




                                                                   Non-food
 $3,000
                                                                                   Gepps Cross DOC MTA                  Adel Metro             Aust. Avg.
                                                         2,407
 $2,500
                                           2,039 2,180
 $2,000

 $1,500                    1,343
             1,115 1,211
                                                                                                         926    984   1,043
 $1,000
                                                                        585 634          655
                                                                                                                                        331    364       395
  $500

      $0
                 Apparel                  Household Goods                      Leisure                   General Retail                 Retail Services




*Including GST
Source: MarketInfo; MacroPlan Dimasi




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                                                                    Proposed outlet centre development: Economic Impact Assessment
Section 4: Trade area analysis




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%.


                                                         Table 4.3
                         Gepps Cross DOC trade area - retail expenditure ($M), 2015-2026*

                                              Forecast retail spend ($M)                     Avg. ann. growth
  Trade area                          2015        2018          2021         2026             ($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




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                                                     Proposed outlet centre development: Economic Impact Assessment
Section 4: Trade area analysis




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.



                                                       Table 4.4
              Gepps Cross DOC total trade area - retail expenditure by category ($M), 2015-2026*

  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




  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.




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                                                     Proposed outlet centre development: Economic Impact Assessment
Section 4: Trade area analysis




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.



                                                       Table 4.5
                       Gepps Cross DOC trade area - apparel expenditure ($M), 2015-2026*

                                              Forecast retail spend ($M)                     Avg. ann. growth
  Trade area                          2015         2018        2021         2026              ($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




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                                                     Proposed outlet centre development: Economic Impact Assessment
Section 5: Analysis of need and demand

This section of the report analyses the need and demand for the proposed outlet centre in
northern Adelaide and sets out the indicative scale and mix of outlet centre which could be
developed at Gepps Cross, as well as the likely order of sales potential that such a centre
could achieve.



5.1   Need and demand for outlet centre facilities in northern Adelaide

There is currently only one outlet centre – Harbour Town at Adelaide Airport – serving the
entire population of Adelaide, some 1.3 million people. As detailed in Section 1, 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, while a population of
over 400,000 is highly desirable.


If the Gepps Cross DOC is developed, we estimate that the centre would serve a main trade
area encompassing the majority of northern Adelaide. At around 660,000 residents, the
defined Gepps Cross DOC main trade area population would represent around half of the
population of metropolitan Adelaide.




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                                         Proposed outlet centre development: Economic Impact Assessment
Section 5: Analysis of need and demand




5.2   Indicative sales potential

On the basis of our analysis of the Australian outlet centre industry, as outlined in Section 1
of the report, by far the most important factor which underpins the scale of centre
supportable and its likely trading performance is the potential/possibility for apparel sales.
That in turn is driven by a combination of the available pool of apparel expenditure within
the trade area that the centre can effectively serve, and the market share of that
expenditure which the centre can attract. The key steps in assessing total centre sales
potential are therefore as follows:


 Apparel sales – based on our analysis of most of the existing outlet centres across

   Australia, we have assessed that the more successful centres achieve an average market
   share of apparel spending from their main trade areas of 10% – 12.5%.

 Non-apparel sales – at successful outlet centres, apparel sales typically account for 75% –

   80% of total centre sales, with the remaining 20% – 25% comprising sales in other retail
   categories. The majority of non-apparel sales are typically generated from food catering
   (i.e. foodcourt/take-away food), household goods (homewares such as crockery/cutlery,
   linen, etc) and leisure items. Over time though we consider that the proportion of sales
   attributable to non-apparel categories should be able to be increased, particularly food
   catering sales in newly designed outlet centres.

 Sales from beyond the trade area – given the broad draw that is enjoyed by most

   successful outlet centres, typically 20% – 30% of total centre sales are attracted from
   beyond the defined main trade area.

Adopting this approach, a reasonable initial view as to the base underlying potential for any
site to accommodate a successful outlet centre can be formed. In the case of Gepps Cross
DOC, and having regard to the key parameters outlined above, the following points are of
particular importance:


 Share of apparel sales – we consider that a well designed and substantial outlet centre at

   the subject site should be able to attract a market share of available main trade area




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                                         Proposed outlet centre development: Economic Impact Assessment
Section 5: Analysis of need and demand




   apparel expenditure of at least 10%, due to a combination of the strong attributes of the
   site (assuming that a quality outlet centre is developed on site) and the relatively limited
   competition within the main trade area.

 Non-apparel sales – we consider that non-apparel sales should be able to account for at

   least 20% of total main trade area sales.

 Sales from beyond the trade area – given the excellent regional accessibility of the

   subject site as noted previously in the report, we consider that in the order of 25% of
   total centre sales should be able to be drawn from beyond the main trade area, including
   from visitors to Adelaide, the Barossa Valley and the Clare Valley.

On the basis of all of the above, Table 5.1 below sets out the estimates of indicative centre
sales at 2018, on the basis of a 10% market share of main trade area apparel expenditure,
which we consider is achievable as noted above.


                                                             Table 5.1
                                     Gepps Cross DOC - Indicative centre sales potential, 2018*

 Factor                                                                        Gepps Cross DOC

 MTA Apparel expenditure (2018, $M)                                                   763.3

 Category

 Apparel sales ($M)                                                                    76.3
 (@ 10% MTA market share)


 Other sales from MTA ($M)                                                             19.1
 (@ 20% of total MTA sales)


 Plus sales from beyond main trade area ($M)                                           31.8
 (@ 25% of total centre sales)


 Total centre sales ($M)                                                              127.2

 Sales per sq.m ($)                                                                   6,360

 Centre GLA (sq.m)                                                                   20,000

 *Constant 2014/15 dollars & including GST
 Source: MacroPlan Dimasi




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                                                          Proposed outlet centre development: Economic Impact Assessment
Section 5: Analysis of need and demand




As outlined in the table above, at 2018, assuming a market share of 10% of available apparel
expenditure, the indicative centre sales potential is $127.2 million. The scale proposed by
Gepps Cross Group, at 20,000 sq.m, would mean an average turnover level per sq.m for the
outlet centre of $6,360.


Table 5.2 shows the anticipated real growth in sales, i.e. excluding inflationary growth,
potential for an outlet centre at Gepps Cross over the period 2018 – 2026.



                                                               Table 5.2
                                Gepps Cross DOC - centre sales potential ($M), 2018 - 2026*

  Year ending                                                           Gepps Cross DOC
  June                                                                       ($M)

  2018                                                                        127.2
  2019                                                                        129.1
  2020                                                                        130.9
  2021                                                                        132.8
  2022                                                                        134.8
  2023                                                                        136.8
  2024                                                                        138.9
  2025                                                                        141.0
  2026                                                                        143.1

  Ave. annual growth, 2018 - 2026                                             1.5%

  *Constant 2014/15 dollars & including GST
  NB: Assumes other sales accounts for an additional 20% of apparel sales.
       Assumes 25% of sales from beyond the trade area.
  Source: MacroPlan Dimasi




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                                                            Proposed outlet centre development: Economic Impact Assessment
Section 5: Analysis of need and demand




5.3   Potential tenancy mix

In order to provide some guidance as to the potential tenancy mix that would result in a
successful outlet centre at Gepps Cross, Table 5.3 below details the key elements of the
tenancy mixes provided at other outlet centre locations around Australia, including Harbour
Town at Adelaide Airport, DFO Essendon, DFO South Wharf, Harbour Town Melbourne,
Spencer Outlet Centre, DFO Moorabbin, DFO Homebush and DFO Brisbane.


In the table, all designer stores represented at these various centres are shown, as well as all
other stores which have representation in four or more outlet centres. The table therefore
shows those retailers which are most popular in outlet centres throughout Australia, as well
as showing the various designer brands which have at least some representation in
Australian outlet centres.


In our view, a strong mix at a new outlet centre at Gepps Cross should seek to replicate as
much as possible a mix such as that which is provided at DFO Homebush and DFO Essendon.
In total, in order to provide around 20,000 sq.m of floorspace, the centre at Gepps Cross
would require around 100 retailers. Such a number would in turn be sufficient to provide the
necessary critical mass.




                                                                   Gepps Cross Discount Outlet Centre
                                                                                                           34
                                          Proposed outlet centre development: Economic Impact Assessment
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