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)

Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 30 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.

Section 5: Analysis of need and demand Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 31 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

Section 5: Analysis of need and demand Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 32 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.

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

Section 5: Analysis of need and demand Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 33 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 $6,360. Table 5.2 shows the anticipated real growth in sales, i.e. excluding inflationary growth, potential for an outlet centre at Gepps Cross over the period 2018 – 2026. Year ending Gepps Cross DOC June ($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 Table 5.2 Gepps Cross DOC - centre sales potential ($M), 2018 - 2026*

Section 5: Analysis of need and demand Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 34 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.

Section 5: Analysis of need and demand Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 35 Category / Tenant Harbour Town DFO DFO Harbour Town Spencer DFO DFO DFO Adelaide Essendon South Wharf Melborne Outlet Centre Moorabbin Homebush Brisbane Designer Brands Armani ● ● Brooks Brothers ● ● Calvin Klein ● Coach Factory ● Ermenegildo Zegna ● Escada ● Hugo Boss ● ● Lacoste ● ● Max Mara ● Michael Kors ● ● Oroton ● Oroton Intimates ● Polo Ralph Lauren ● ● Salvatore Ferragamo ● Sass & Bide ● ● Tommy Hilfiger ● Women's Apparel Bendon Outlet ● Cue ● Dotti ● Esprit ● Forever New ● Jacqui E ● Jigsaw ● Portmans ● Children's Apparel Indie Kids by Industrie ● Pumpkin Patch Outlet Store ● Men's Apparel Connor ● Roger David ● Tarocash ● Yd ● Footwear Novo Shoes ● Shoe Warehouse ● Skechers ● Windsor Smith ● Source: MacroPlan Dimasi Table 5.3 Gepps Cross DOC - Range of potential tenants Stores in other outlet centres

Section 5: Analysis of need and demand Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 36 Category / Tenant Harbour Town DFO DFO Harbour Town Spencer DFO DFO DFO Adelaide Essendon South Wharf Melborne Outlet Centre Moorabbin Homebush Brisbane Jeaneries / Unisex Authentic Factory Outlet ● Cotton On ● Cotton On Kids ● Factorie ● Fila ● G-Star Raw ● Industrie ● Jay Jays ● Jeanswest ● Just Jeans ● Levis ● Nautica ● ● Peter Alexander ● Podium Sports ● Puma ● Rivers ● Roadhouse ● Fashion Accessories Cosmetics Fragrance Direct ● Florentine Eyewear ● Fossil ● Kate Hill ● Strandbags ● Sunglass Hut ● Victoria Station ● Take-away Food Subway ● Newsagents, Books & Stationery Typo ● Pharmacy / Cosmetics Hairhouse Warehouse ● Homewares Adairs ● Bed Bath N Table ● Matchbox ● Provincial Home Living ● Royal Doulton Outlet Shop ● Sheridan ● Source: MacroPlan Dimasi Table 5.3 continued Gepps Cross DOC - Range of potential tenants Stores in other outlet centres

Section 5: Analysis of need and demand Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 37 Table 5.4 details the retail categories which could potentially be accommodated at Gepps Cross DOC, and provides an indication of floorspace and estimated turnover levels for each. The estimated sales potential is based on a 10% market share of apparel expenditure from the defined main trade area, a result which a well designed and well tenanted outlet centre of 20,000 sq.m at Gepps Cross should be able to achieve. Table 5.5 then provides a list of potential retailers by category which could locate at the subject site, as well as their indicative average size and turnover levels.

Category GLA Est. sales (sq.m) ($'000) ($/sq.m) Mini-majors 5,000 23,750 4,750 Retail specialties Apparel 11,500 78,175 6,800 Womens fashion 3,500 22,750 6,500 Mens fashion 1,400 9,100 6,500 Childrens apparel 500 3,250 6,500 Jeaneries/unisex 2,500 16,875 6,750 Footwear 1,500 11,250 7,500 Fashion accessories 800 6,400 8,000 Jewellery 300 2,550 8,500 Sports 1,000 6,000 6,000 Food 1,500 13,875 9,300 Café and restaurants 900 7,875 8,750 Takeaway food 600 6,000 10,000 Other 2,000 11,400 5,700 Pharmacy/cosmetics 400 3,400 8,500 Household goods 1,500 7,500 5,000 Stationery 100 500 5,000 Total retail spec.

15,000 103,450 6,900 Total centre - retail 20,000 127,200 6,360 *Constant 2014/15 dollars & including GST Source: MacroPlan Dimasi Gepps Cross DOC Table 5.4 Gepps Cross DOC - Estimated centre sales potential by retail category, 2017/18*

Section 5: Analysis of need and demand Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 38 Category Mini-majors Nike 600 - 800 6,000 - 7,000 Adidas 500 - 800 4,200 - 5,000 Puma 400 - 500 4,200 - 5,000 Converse 400 - 500 4,000 - 5,500 Cotton On 400 - 600 4,500 - 5,500 Trade Secret 1,500 - 1,800 3,000 - 4,000 Factorie 500 - 600 2,000 - 2,500 Sheridan 400 - 500 3,300 - 4,000 Rivers 800 - 900 3,200 - 4,000 Retail specialties Apparel Womens apparel Bendon Outlet 100 - 120 8,000 - 8,000 Cotton On Body 300 - 370 3,300 - 4,000 Cue 100 - 120 6,000 - 7,000 Dotti 130 - 170 6,000 - 7,000 Esprit 280 - 350 5,000 - 6,000 Forever New 180 - 220 4,500 - 5,500 Jacqui E 150 - 200 6,000 - 7,000 Jigsaw 200 - 250 3,800 - 4,500 Peter Alexander 110 - 130 8,300 - 9,000 Portmans 180 - 230 5,500 - 6,500 Review 80 - 100 5,500 - 6,500 Simone Perele 110 - 130 7,000 - 8,000 Mens apparel Connor 130 - 160 4,000 - 5,000 Roger David 130 - 160 5,500 - 6,000 Tarocash 110 - 140 5,500 - 6,000 Yd 100 - 120 5,500 - 6,000 Childrens apparel Pumpkin Patch Outlet Store 300 - 370 5,500 - 6,500 Cotton On Kids 130 - 170 3,000 - 3,500 Jeaneries/unisex Authentic Factory Outlet 320 - 400 5,500 - 6,500 Fila 190 - 230 3,000 - 3,500 G-Star Raw 420 - 520 7,500 - 8,500 Industrie 90 - 120 8,000 - 9,000 Jay Jays 210 - 260 4,500 - 5,000 Jeanswest 110 - 140 5,500 - 6,000 Just Jeans 220 - 270 4,500 - 5,500 Levis 150 - 180 5,200 - 6,000 Roadhouse 120 - 150 5,500 - 6,500 Source: MacroPlan Dimasi Table 5.5 Gepps Cross DOC - Potential retailers by category Average GLA Average turnover (sq.m) ($/sq.m)

Section 5: Analysis of need and demand Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 39 Category Footwear Diana Ferrari 170 - 210 8,000 - 9,000 Novo Shoes 130 - 170 3,000 - 3,500 Skechers 120 - 150 5,000 - 6,000 Windsor Smith 140 - 170 5,000 - 6,000 Fashion accessories Cosmetics Fragrance Direct 110 - 130 8,500 - 9,800 Florentine Eyewear 70 - 90 8,000 - 9,000 Fossil 160 - 200 4,500 - 5,500 Kate Hill 80 - 100 4,500 - 5,500 Strandbags 140 - 170 6,000 - 7,000 Victoria Station 130 - 150 4,500 - 5,500 Jewellery Angus & Coote 130 - 170 3,300 - 4,100 Sports Ripcurl 170 - 210 6,500 - 7,500 Podium Sports 250 - 310 3,300 - 4,000 Puma 340 - 410 5,000 - 6,000 Other non food Cosmetics/Hair care Hairhouse Warehouse 170 - 210 5,000 - 6,500 Household goods Adairs 260 - 320 4,200 - 5,200 Bed Bath N Table 170 - 210 3,000 - 3,500 Matchbox 190 - 240 3,600 - 4,400 Royal Doulton Outlet Shop 170 - 200 5,000 - 6,000 Stationery Typo 80 - 100 3,500 - 4,500 Food Café and restaurants Espresso bar 20 - 40 15,000 30,000 Bakery/Patisserie 50 - 70 9,500 - 10,500 Casual café 100 - 120 7,500 - 8,500 Casual Italian 100 - 120 7,500 - 8,500 Takeaway food/Food court Juice 30 - 40 7,500 - 8,500 Sandwiches 40 - 50 9,500 - 11,500 Sushi 40 - 50 6,000 - 7,000 Pizza 60 - 80 6,000 - 8,000 Chinese 50 - 70 8,000 - 9,500 Thai 50 - 70 8,000 - 9,500 Carvery 50 - 70 9,500 - 11,500 Source: MacroPlan Dimasi Table 5.5 continued.

Gepps Cross DOC - Potential retailers by category Average GLA Average turnover (sq.m) ($/sq.m)

Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 40 Section 6: Assessment of economic benefits and likely impacts The addition of an outlet centre at Gepps Cross will generate a range of potential economic outcomes and these are now considered in this final section of the report. 6.1 Primary economic and social benefits The provision of an outlet centre at Gepps Cross as proposed will generate a range of economic and related social benefits. In this regard, the key benefits will include the following: i. Increased Shopping Choice The proposed outlet centre will offer a wider range of shopping alternatives for residents of the Gepps Cross trade area.

As noted previously in this report, there is a clearly evident gap in the provision of outlet centre facilities in northern Adelaide, and the proposed Gepps Cross DOC will serve to fill that gap. ii. Additional Employment The proposed Gepps Cross DOC will create a large number of additional jobs in the area, both for the construction and related industries during the construction phase, and for the economy generally once the centre is completed. The likely quantum of this additional employment is detailed further in the following sub- section.

iii. Increased Convenience for Residents At present, residents of the defined trade area have no outlet centre easily available to them, with the only outlet centre in Adelaide located at Harbour Town, to the south-west of the CBD. The provision of a new outlet centre in a convenient location at Gepps Cross, adjoining an already existing homemaker centre, will add substantially to broader convenience for outlet shopping.

Section 6: Assessment of economic benefits and likely impacts Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 41 Therefore, 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.

Against these positive impacts, the question of likely trading impacts on other retail facilities throughout the broad region can be considered, as presented in greater detail later in Section 6.3.

6.2 Employment stimulus Table 6.1 below presents an estimate of the number of additional employment opportunities likely to be created by an outlet centre at Gepps Cross. Based on the amount and nature of the floorspace to be incorporated in the proposed development, we estimate that an additional 850 jobs will be created. In determining employment opportunities as estimated in Table 6.1, we have allowed for 5% of the additional employment that is likely to be created by the Gepps Cross DOC development to be absorbed in job losses at other impacted centres, thus resulting in a projected direct net employment increase of 808 jobs.

Table 6.2 then utilises the estimated net level of job creation at Gepps Cross as a result of the development, together with ABS Input/Output Multipliers, to calculate the likely total employment stimulus that can be attributed to the development of the centre. The estimated capital cost for the construction of the project is $30 million, and Table 6.2 attached shows the employment stimulus that can be anticipated as a result of construction. Estimated Gepps Cross DOC Type of use employment GLA Employment per '000 sq.m (sq.m) (persons) Mini-majors 20 5,000 100 Specialty shops 50 15,000 750 Total centre1 20,000 850 Net increase2 808 1.

Excludes non-retail components 2. Net increase includes an allowance for reduced employment levels at impacted centres, estimated at 5% of the total increase Source: Client; MacroPlan Dimasi Table 6.1 Gepps Cross DOC - estimated centre employment levels

Section 6: Assessment of economic benefits and likely impacts Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 42 Using appropriate ABS Input/Output Multipliers, we estimate that the construction phase of the Gepps Cross DOC development will create some 128 direct jobs and a further 205 multiplier induced jobs, which includes both full-time and part-time work, during the period of construction. Upon completion, an estimated 808 jobs will potentially be created through the staffing and operation of the additional retail floorspace, as previously outlined.

Again, applying the ABS Input/Output Multipliers, the broader stimulus created by centre employment will generate an estimated 323 further jobs in the total economy.

The retail component of the Gepps Cross DOC development will, therefore create a very substantial stimulus to employment throughout Adelaide, in total amounting to around 1,460 jobs. Original stimulus Direct Direct Supplier Total employment employment employment (long-term) (const'n period) multiplier effects Centre employment1 808 323 1,131 Construction of project ($30m. est. capital costs) 128 205 333 Job years2 Total 808 128 528 1,464 * Employment totals include both full-time and part-time work 1. Indicates the estimated number of net additional ongoing jobs as a result of the proposed development 2.

Indicates the estimated number of jobs over the life of the construction project, for the equivalent of one year Source: Client; MacroPlan Dimasi Table 6.2 Gepps Cross DOC - estimated future additional centre employment levels*

Section 6: Assessment of economic benefits and likely impacts Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 43 6.3 Estimated trading impacts The following factors are relevant in assessing the potential impacts of a new retail development, or expansion, on each existing facility or centre:  The distance of the (impacted) centre, or retail precinct, by road, from the proposed development.  The size of the centre or precinct, in terms of total retail floorspace.  The amount of floorspace to be added, and the brand(s) of any anchor stores.

 The role and function of the centre or precinct.

 Relative accessibility and relative convenience compared with the proposed retail development.  The estimated performance of the centre/precinct (in current sales) and future performance (in the impact year). This accounts for any future developments in the region that may also impact on the future sales of existing centres.  The share of available expenditure which the centre/precinct attracts from the identified main trade area of the proposed development. A centre may not be situated in the identified trade area of the proposed development but its main trade area may extend to include parts, or all, of the trade area.

For example, the trade area for large regional shopping centre typically includes several hundred thousand persons. Such a trade area is likely to include (partially or completely) trade areas for smaller convenience based centres, sub-regional centres, retail strips and stand-alone supermarkets. The following key principles are important on when assessing the dollar (and percentage) impacts that are likely to be absorbed by existing facilities/centres:  The greatest impacts are typically absorbed by the closest comparable store types or centres. For example, a new outlet centre is generally likely to impact the closest nearby

Section 6: Assessment of economic benefits and likely impacts Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 44 outlet centre to the greatest extent, followed by impacts on other comparable centres (e.g. regional centres and the CBD with a large focus on apparel retailing).  Impacts from an outlet centre development on smaller scale, sub-regional centres, will be much smaller in scale than those likely to be experienced at regional centres and the CBD, as these stores normally attract a smaller market share of available main trade area apparel expenditure and perform a different role and function in the hierarchy to larger regional centres.

 Outlet centres draw business relatively thinly across a broad region, as previously detailed, and the Gepps Cross DOC would be likely to similarly attract its business in this manner. As a consequence, impacts are diffused across extensive regions and many facilities. Table 6.3 below shows the estimated trading impacts expected across the surrounding network of centres, expressed in dollar terms and also in percentage terms, as a share of sales that would be expected with and without the Gepps Cross DOC development in the year 2017/18. As outlined in Section 3 of the report, those centres are most likely to be the existing outlet centre in Adelaide, Harbour Town; the Adelaide CBD; the regional centres in northern Adelaide in particular, and to a lesser extent the other regional centres throughout Adelaide; and the various sub-regional centres throughout northern Adelaide.

We have estimated the percentage trading impacts adopting the following methodology:  First, as detailed previously, the sales potential of the proposed outlet centre development at Gepps Cross is estimated at $127 million in its first year (i.e. 2017/18).  Sales are then estimated across the surrounding competitive supply network as at 2014/15 based on detailed inspections of the various facilities, plus other known public information.

 Potential sales for the surrounding competitive supply network in 2017/18 are then estimated, assuming the proposed development does not occur.

Section 6: Assessment of economic benefits and likely impacts Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 45  Sales for all competitive centres as at 2017/18 are then estimated, assuming the proposed development at the subject site does proceed.  An assessment of likely trading impacts is then made by comparing the estimated sales potential for each centre, at 2017/18, with and without the proposed development.

Because an outlet centre at Gepps Cross would draw its sales from a very wide region, as detailed previously in this report, the consequences in terms of impact would be that a large number of centres would be likely to be impacted; however, all impacts would be relatively minor to minimal. The centre which is expected to be most significantly impacted is Harbour Town at Adelaide Airport, with an estimated impact in the order of 13 – 14%. However, for all other centres, the estimated likely order of impact is 1% – 3%. While these centres may experience an initial small trading impact, they will continue to effectively serve their respective catchments.

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.

Section 6: Assessment of economic benefits and likely impacts Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 46 Dist. from Est. sales % change Gepps Cross 2014/15 With Without Difference with GC Centres (km) Gepps Cross Gepps Cross $M % (2015 - 2018) Outlet centres Harbour Town 19.2 170 158 183 -25 -13.9% -7.3% Adelaide CBD 10.1 1,800 1,916 1,935 -19 -1.0% 6.4% Regional centres Westfield Tea Tree Plaza 9.9 500 522 538 -16 -3.0% 4.4% Westfield West Lakes 15.1 382 400 411 -11 -2.6% 4.8% Elizabeth Shopping Centre 16.5 339 356 364 -8 -2.3% 4.9% Westfield Marion 24.3 797 851 857 -6 -0.7% 6.7% Sub-regional centres Churchill Centre¹ 4.5 200 209 215 -6 -3.0% 4.3% Ingle Farm SC 6.5 145 152 156 -4 -2.4% 5.0% Arndale Central 8.9 160 167 172 -5 -3.0% 4.3% Hollywood Plaza 11.4 150 158 161 -3 -1.6% 5.6% Parabanks SC 11.4 135 143 145 -2 -1.3% 6.0% Golden Grove Village 12.9 210 223 226 -3 -1.1% 6.4% Munno Para Shopping City 19.9 250 266 269 -3 -1.2% 6.3% Other centres 16 Total estimated impacts 127 *Constant 2014/15 dollars & including GST ¹Including Costco Source: Shopping Centre News, MacroPlan Dimasi Table 6.3 Gepps Cross DOC - Estimated impact on specific centres, ($M)* Projected 2017/18

Section 6: Assessment of economic benefits and likely impacts Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 47 6.4 Additional considerations Supermarket facilities There are many examples where factory outlet centres in Australia include supermarket facilities, including the following:  Harbour Town Adelaide is 30,000 sq.m in size and includes a 3,800 sq.m Woolworths supermarket. The centre is located in a non-residential precinct of Adelaide, within the Adelaide Airport, and draws customers from throughout the wider Adelaide region.  DFO Essendon is located at Essendon Airport and is almost 20,000 sq.m in size.

Essendon Airport also includes LaManna Direct, a large scale supermarket focusing on fresh food, and a Coles supermarket of around 2,700 sq.m which anchors a small convenience centre.  Harbour Town on the Gold Coast, which is 51,000 sq.m in size, includes a full scale Woolworths supermarket of around 3,900 sq.m. The centre is the only factory outlet centre serving the Gold Coast, which includes a resident population of around 550,000.  DFO Cairns includes 22,740 sq.m of retail floorspace including a full-line Coles supermarket of around 3,500 sq.m. The centre is located in Westcourt to the south west of the Cairns CBD, and is the only outlet centre in Cairns, serving a population of around 240,000 in the surrounding region.

 Market City is the only centre in Sydney CBD with factory outlet stores, but also with traditional retail. The centre is 15,320 sq.m in size and includes an independent supermarket (Thai Kee Supermarket) of 1,770 sq.m in size. Such supermarket facilities provide a level of convenience and enable outlet shoppers to undertake some supermarket shopping, as well as enabling passing traffic to utilise the convenience based facilities. The pattern of customer attraction for supermarket facilities in outlet centres is quite different to the typical neighbourhood activity centre pattern. While nearby workers and residents would certainly be expected to utilise the supermarket facilities at the Gepps Cross site, the majority of sales would be expected to be drawn from customers attracted from the

Section 6: Assessment of economic benefits and likely impacts Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 48 wider region, who will visit the site primarily to use the outlet centre, and also from passing traffic. A supermarket at the subject site would therefore not be expected to impact any one supermarket in a significant way, with the impact spread broadly over an extensive area. Leisure and recreation facilities A leisure and recreation offer at Gepps Cross would serve as a further key differentiating factor from any of the established shopping centres provided throughout Adelaide.

The combination of an outlet centre, recreation and leisure precinct and a supermarket at the Gepps Cross site will serve to achieve the following:  First, the development will not be a replica of any existing shopping/retail centre in Adelaide. It will be a genuine integrated convenience, outlet shopping and leisure destination, and will be the first such destination in South Australia.  Second, as a result of this combination of elements, the development will be an attractive destination for residents of all of the northern part of Adelaide at least, and most likely also the southern part of the city.

It will also be a sought after destination for interstate and international visitors to Adelaide and South Australia.

 As a result of each of the two factors above, the development will be a significant addition to the overall attraction of Adelaide as a shopping and leisure destination which will not compete directly with other existing centres, but rather will draw business from a very broad region, and will promote increased visitation to northern Adelaide.  The development will be an attraction for all residents and visitors to Adelaide, but will be particularly attractive for families, with its range of recreation and outlet shopping alternatives, as well as a supermarket, all conveniently agglomerated on the one high profile and easily accessible site, situated between two major highways – Main North Road and Port Wakefield Road/Princes Highway – and located in close proximity to the intersection of Grand Junction Road.

The leisure and recreation component of the development will not offer retail competition to other shopping centres, but rather will be a differentiating factor, which will help to create a strong regional destination at the site. The unique combination of elements which a leisure

Section 6: Assessment of economic benefits and likely impacts Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 49 and recreation precinct would provide will attract not only residents of northern Adelaide (or the trade area as defined in this report) but also residents from the balance of Adelaide, from other parts of South Australia, and visitors to Adelaide.

6.5 Net community benefit The proposed discount outlet centre development at Gepps Cross would result in a substantial net community benefit. As detailed in this report, 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 Proposed outlet centre development: Economic Impact Assessment 50 Section 7: Response to feedback on draft EIA This section addresses a number of queries that were raised in relation to the draft EIA prepared by MacroPlan Dimasi, dated March 2016, for the proposed Gepps Cross Discount Outlet Centre. This section first considers a proposed minimum limit of 150 sq.m on shop size, and the implications of such a minimum limit in terms of mitigating any impacts on existing activity centres.

Next, this section provides responses to a number of queries that have been raised in relation to the draft EIA following a peer review of that document.

Finally, this section presents a discussion and consideration of a separate upcoming DPA which relates to a proposal for a new neighbourhood centre to be built at Briens Road in Northfield, on a site at the corner of Grand Junction Road and Briens Road, approximately 2 km to the south-east of the subject site at Gepps Cross. 7.1 Minimum store size The previous section demonstrated that the anticipated trading impacts on existing activity centres throughout Adelaide would be modest, and would fall within the bounds of normal competition.

However, in order to further mitigate any likely trading impacts on existing activity centres, it is also proposed to impose a minimum individual store size of 150 sq.m on any specialty retailing to be provided within the development.

Section 7: Response to feedback on draft EIA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 51 MacroPlan Dimasi conducts extensive regular surveys of shopping centres throughout Australia, as does Urbis. Those surveys show, at 2015, that the average specialty store sizes for various types of centres are approximately as follows:  Regional centres 100 – 110 sq.m  Sub-regional centres 90 – 100 sq.m  Neighbourhood centres 90 – 100 sq.m Across retail categories, the information available for 2015 shows that for regional centres average specialty store sizes are typically 75 – 100 sq.m for food specialty stores and 120 – 130 sq.m for non-food specialty stores.

Typically, in all of these centre types there are few specialty stores which are 150 sq.m or greater. An imposition of a minimum 150 sq.m footprint on specialty retailing to be provided at the Gepps Cross development will exclude most traditional specialty stores which locate in typical neighbourhood, sub-regional or regional shopping centres. Such a floorspace limit will also encourage a form of retailing which is in keeping with the nature of the proposed development. MacroPlan Dimasi has extensive proprietary data on the tenancy mixes at Australian discount outlet centres, including shop sizes.

That data shows that for the great majority of discount outlet centres shop sizes average 140 – 170 sq.m, a figure which is quite clearly larger than the average specialty shop size in regional centres, sub-regional centres or neighbourhood centres.

Section 7: Response to feedback on draft EIA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 52 7.2 Queries raised by peer review of draft EIA A peer review of the draft EIA has been undertaken, and has raised the following points for response: i. The likely effects that a proposal for a discount outlet centre at Parafield Airport might have on the outcome for the proposed discount outlet centre at Gepps Cross Gateway. ii. The effect that the inclusion of a wider range of competitive floorspace might have on the viability of the proposal.

iii.

The accuracy of the estimated population levels for the various trade area sectors as set out in the EIA. iv. The estimated market penetration rates (or market shares) from the various trade area sectors on which the EIA assessment is based. v. Confirmation as to whether or not the employment effects anticipated as a result of the discount outlet centre at Gepps Cross might be ‘potentially optimistic’. vi. Explanation of how the cumulative impacts have been calculated. Responses to each of the above points are set out below. i. Parafield Airport discount outlet centre proposal Masterplanning for Parafield Airport shows an intention to provide, on airport land, a possible discount outlet centre.

In the event that such a centre is built at Parafield Airport, we expect that there would be competition between the Parafield Airport facility and the proposed Gepps Cross discount outlet centre, although there is also a significant distance between the two sites – approximately 6 km.

Section 7: Response to feedback on draft EIA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 53 However, because discount outlet centres typically attract very low market shares of available retail expenditure across relatively extensive areas, there would be likely considerable overlap in trade area served by the two facilities.

One of the outcomes would be a clear expectation that both facilities would trade at somewhat lower levels than each would achieve if the other were not to exist. In other words, the most significant and most direct impact which either facility, if built, will have, will be on the closest, most comparable centre, i.e. the closest discount outlet centre. The draft EIA for the proposed Gepps Cross Discount Outlet Centre shows, at Table 6.1 on page 46, that the expected greatest impact of that centre, under current circumstances, would be on the existing Harbour Town facility at Adelaide Airport, since at present Harbour Town is the only discount outlet centre available in metropolitan Adelaide.

The draft EIA also shows that the projected impacts on other existing centres throughout Adelaide are very minor, ranging from a high of 3% in the case of Westfield Tea Tree Plaza to figures of 1% or less for most of the surrounding network of centres likely to be impacted. In the event that a discount outlet centre is also built at Parafield Airport, then the order of impacts resulting from the Gepps Cross Discount Outlet Centre would be lower than the figures shown at Table 6.1 of the draft EIA, since the Gepps Cross facility would be expected to trade at lower levels under those circumstances – potentially by around 10% – 15%, dependent on the size and quality of facility delivered at Parafield Airport.

The Parafield Airport facility would similarly have some impacts on the surrounding network of other activity centres, but those impacts would again be very modest in scale, thus the cumulative impacts of two possible new outlet centres in Adelaide would still be relatively minor on the network of shopping centres which currently services metropolitan Adelaide. This conclusion is supported by experience in other cities, in particular Melbourne. Although Melbourne clearly has a much greater population than Adelaide, at present within Melbourne there are seven discount outlet centres, with a number of others under consideration for future development.

Section 7: Response to feedback on draft EIA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 54 ii. Inclusion of a wider range of competitive floorspace A number of facilities are under consideration for inclusion as part of the Gepps Cross Gateway development, which are not discount outlet retailing, in particular:  a supermarket of 3,000 sq.m;  health & fitness club;  tenpin bowling;  day spa;  indoor trampoline centre;  childcare centre; and  children’s play area/café. The implications of the possible inclusion of these various facilities are discussed further below, first, for the supermarket, and then for the range of leisure and recreation facilities that are currently envisaged.

Supermarket There are many examples where factory outlet centres in Australia include supermarket facilities, including the following:  Harbour Town Adelaide is 30,000 sq.m in size and includes a 3,800 sq.m Woolworths supermarket. The centre is located in a non-residential precinct of Adelaide, within the Adelaide Airport, and draws customers from throughout the wider Adelaide region.  DFO Essendon is located at Essendon Airport and is almost 20,000 sq.m in size. Essendon Airport also includes LaManna Direct, a large scale supermarket focusing on fresh food, and a Coles supermarket of around 2,700 sq.m which anchors a small convenience centre.

 Harbour Town on the Gold Coast, which is 51,000 sq.m in size, includes a full scale Woolworths supermarket of around 3,900 sq.m. The centre is the only factory outlet centre serving the Gold Coast, which includes a resident population of around 550,000.

Section 7: Response to feedback on draft EIA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 55  DFO Cairns includes 22,740 sq.m of retail floorspace including a full-line Coles supermarket of around 3,500 sq.m. The centre is located in Westcourt to the south west of the Cairns CBD, and is the only outlet centre in Cairns, serving a population of around 240,000 in the surrounding region.  Market City is the only centre in Sydney CBD with factory outlet stores, but also with traditional retail. The centre is 15,320 sq.m in size and includes an independent supermarket (Thai Kee Supermarket) of 1,770 sq.m in size.

Such supermarket facilities provide a level of convenience and enable outlet shoppers to undertake some supermarket shopping, as well as enabling passing traffic to utilise the convenience based facilities.

The pattern of customer attraction for supermarket facilities in outlet centres is quite different to the typical neighbourhood activity centre pattern. While nearby workers and residents would certainly be expected to utilise the supermarket facilities at the Gepps Cross site, the majority of sales would be expected to be drawn from customers attracted from the wider region, who will visit the site primarily to use the outlet centre, and also from passing traffic. A supermarket at the subject site would therefore not be expected to impact any one supermarket in a significant way, with the impact spread broadly over an extensive area.

Map 7.1 illustrates the surrounding network of shopping centres and supermarkets within the primary trade area identified for the proposed Gepps Cross Discount Outlet Centre. This map highlights a number of factors, including the following:  There is a noticeable spatial gap, at the Gepps Cross locality, in the provision of supermarkets throughout this primary trade area.

 The range of supermarkets likely to be impacted by the addition of a new supermarket at Gepps Cross is extensive, and is likely to include, as a minimum, Coles, Aldi and Costco at Churchill Centre; Coles at Blair Athol; Woolworths at Mawson Central; two Coles stores at Ingle Farm SC; and various smaller Supa IGA/IGA stores at Pooraka, Walkley Heights,

Section 7: Response to feedback on draft EIA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 56 Enfield and other localities. That in turn means impacts on any one store will be very limited.

Table 7.1 details the locations of the various supermarkets in the surrounding area, and also shows the distances of those stores from the Gepps Cross site. Again, this table highlights the fact that within the surrounding region there is a significant number of supermarkets, and thus the impact of any supermarket sales attracted to the Gepps Cross site would be distributed across a large number of competitor stores, not impacting any one store to a noticeable degree.

Given all of these factors, we do not consider that any existing supermarket facility will face the threat of significant impact from the inclusion of a supermarket within the Gepps Cross Discount Outlet Centre development.

Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 57 Map 7.1: Gepps Cross Discount Outlet Centre Primary trade area and competition

Section 7: Response to feedback on draft EIA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 58 Retail Dist.

by road from Centre GLA Major traders Gepps Cross DOC (sq.m) (km) Sub-regional centres Mawson Central 12,000 Woolworths 4.2 Ingle Farm SC 26,700 Coles (x2) 4.9 Churchill Centre 33,000 Coles, Aldi, Costco 5.1 Sefton Plaza 12,500 Foodland 5.2 Arndale Central 29,700 Coles, Woolworths 9.1 Port Canal 18,000 Coles 11.2 Supermarket-based centres Enfield Plaza 1,000 IGA 2.1 Pooraka SC 1,000 Foodworks 2.7 Blair Athol 5,000 Coles 3.8 Walkley Heights 2,000 Foodland 4.5 Clearview 1,000 IGA 4.9 Prospect 10,200 5.0 • Prospect Plaza 2,000 Foodland • Prospect Central 3,200 Coles • Other 5,000 Adelaide Fresh Food Northpark SC 18,000 Coles, Woolworths 5.1 Northgate SC 6,000 Woolworths 5.7 Regency Plaza 5,700 Woolworths 5.9 Valley View SC 3,800 Foodland 7.0 Collinswood 1,800 Foodland 7.1 Greenachres SC 11,000 Coles 7.3 Gilles Plains SC 11,500 7.4 • Current 6,500 Coles • Proposed 5,000 Aldi, Dan Murphy's Para Vista SC 3,400 Independent 7.5 Windsor Gardens SC 3,500 Foodworks 7.7 Walkerville SC 5,300 Woolworths 8.1 Westwood 500 IGA 8.1 Rosewater 5,000 Foodland, Foodworks 8.2 North Adelaide SC 7,400 Foodland 8.5 Croydon 1,500 Foodland 9.3 Marden SC 7,700 Woolworths 9.4 Alberton 1,500 IGA 9.8 St Clair Town Centre 7,000 Coles 10.0 Port Mall 6,500 Foodland 10.8 Felixstow SC 2,200 Woolworths 10.9 Campbelltown 4,000 IGA 10.4 Semaphore 10,000 Foodland, IGA 13.9 North Haven SC 4,000 Foodland 20.0 Source: Property Council of Australia; MacroPlan Dimasi Table 7.1 Gepps Cross DOC primary sector - supermarket competition

Section 7: Response to feedback on draft EIA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 59 Leisure and recreation facilities A recreation and leisure offer at Gepps Cross would serve as a further key differentiating factor from any of the established shopping centres provided throughout Adelaide. The combination of an outlet centre, recreation and leisure precinct and a supermarket at the Gepps Cross site will serve to achieve the following:  First, the development will not be a replica of any existing shopping/retail centre in Adelaide.

It will be a genuine integrated convenience, outlet shopping and leisure destination, and will be the first such destination in South Australia.  Second, as a result of this combination of elements, the development will be an attractive destination for residents of all of the northern part of Adelaide at least, and most likely also the southern part of the city. It will also be a sought after destination for interstate and international visitors to Adelaide and South Australia.

 As a result of each of the two factors above, the development will be a significant addition to the overall attraction of Adelaide as a shopping and leisure destination which will not compete directly with other existing centres, but rather will draw business from a very broad region, and will promote increased visitation to northern Adelaide.  The development will be an attraction for all residents and visitors to Adelaide, but will be particularly attractive for families, with its range of recreation and outlet shopping alternatives, as well as a supermarket, all conveniently agglomerated on the one high profile and easily accessible site, situated between two major highways – Main North Road and Port Wakefield Road/Princes Highway – and located in close proximity to the intersection of Grand Junction Road.

The leisure and recreation component of the development will not offer retail competition to other shopping centres, but rather will be a differentiating factor, which will help to create a strong regional destination at the site. The unique combination of elements which a leisure and recreation precinct would provide will attract not only residents of northern Adelaide (or the trade area as defined in this report) but also residents from the balance of Adelaide, from other parts of South Australia, and visitors to Adelaide.

Section 7: Response to feedback on draft EIA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 60 iii.

Estimated trade area population levels The population levels for each trade area sector as set out in the draft EIA are detailed in Table 4.1 at page 22. Population estimates are shown for each trade area sector for 2006, 2011, 2015, 2018, 2021 and 2026. Both the 2006 and 2011 figures are obtained directly from the Census of Population and Housing conducted by the Australian Bureau of Statistics (ABS) in each of those two years, i.e. those are factual figures.

In addition to conducting 5-yearly Censuses, the ABS also provides intercensal estimates of resident population annually. At the time that the draft EIA was prepared, the most up-to- date such estimates published by the ABS related to 2014. The 2015 figures which are shown in Table 4.1 of the draft EIA reflect all information available at the time that the EIA was prepared, including the 2014 Estimated Resident Population (ERP) figures for each trade area sector as published by the ABS. Therefore, those estimates are very accurate.

Since the date of preparation of the draft EIA, the ABS has released 2015 estimates of resident population for each trade area sector.

That information is available, in ABS Catalogue No. 3101.0. A comparison of the 2015 estimates adopted as shown in Table 4.1 of the draft EIA with the subsequent 2015 ERP figures released by the ABS, is shown below: EIA (2015) ABS (2015) Primary 251,170 251,807 Secondary - Secondary north 221,640 218,750 - Secondary east 129,180 129,469 - Secondary west 56,620 56,787 Total secondary 407,440 405,006 Main trade area 658,610 656,813 Tertiary 74,430 74,239 Total trade area 733,040 731,052 The 2015 estimates adopted in the draft EIA were therefore almost identical to the subsequent 2015 figures released by the ABS.

Section 7: Response to feedback on draft EIA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 61 iv. Estimated market penetration rate Table 7.2 below shows the estimated market shares of available retail expenditure, from each trade area sector, for the proposed Gepps Cross Discount Outlet Centre, which underpin the analysis set out in the draft EIA. Across the defined main trade area, the Gepps Cross Discount Outlet Centre is projected to achieve a market share of just 1.2% of total available retail expenditure, although its market share of available apparel expenditure is estimated at 10.0%.

Across all other retail categories (i.e. food, convenience, homewares, leisure retail, etc) the market share of available main trade area expenditure estimated to be achieved by the proposed outlet centre is only 0.3%.

Trade area Apparel Non-apparel Total Apparel Non-apparel Total Apparel Non-apparel Total Primary 303 2,901 3,204 15.0% 0.4% 1.8% 45.3 11.1 56.3 Secondary sectors • North 229 2,418 2,647 7.0% 0.2% 0.7% 15.9 3.7 19.6 • East 164 1,539 1,703 8.0% 0.2% 1.0% 13.1 3.7 16.8 • West 67 660 727 3.0% 0.1% 0.4% 2.0 0.7 2.7 Total secondary 461 4,617 5,077 6.7% 0.2% 0.8% 31.0 8.0 39.1 Main trade area 763 7,518 8,282 10.0% 0.3% 1.2% 76.3 19.1 95.4 Sales from beyond MTA 31.8 Total centre sales 127.2 *Constant 2014/15 dollars & including GST Source: MarketInfo; MacroPlan Dimasi Table 7.2 Gepps Cross DOC main trade area - estimated market shares, 2017/18* Retail spend ($M) Market share (%) Centre sales ($M)

Section 7: Response to feedback on draft EIA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 62 v. Confirmation as to whether or not the employment effects anticipated might be potentially optimistic The MacroPlan draft EIA indicated estimated additional employment to be created by the proposed development of some 1,464 jobs, both directly and indirectly. Approximately one- quarter of those jobs would be created as a result of the construction of the project, with the balance to result from employment created directly on site by the proposed retail facilities, and off-site as a result of supplier induced multiplier effects.

Multiplier jobs reflect the multiplier effects of the proposed development, and thus there is no indication in the draft EIA, or expectation, that all of those jobs will be generated solely within the boundary of Port Adelaide Enfield. The process for estimation of new job creation is not foolproof, however, the process adopted in the draft EIA is in line with the best methodology available to prepare such estimates. Regardless of whether or not the number of jobs eventually created will be precisely the same as the estimates shown in the draft EIA, clearly it is uncontestable that the proposed development will create a very large number of jobs, both during and as a result of construction, and over the longer term as a result of the operation of the additional retail facilities that would be provided on site.

The total jobs foreshadowed are not full time equivalents, and nor are they claimed to be, but rather reflect the normal distribution of employment within the relevant industries. In the retail industry in particular, part-time employment is of great importance, as it provides employment opportunities for a number of sectors of the community who might be unable or unwilling to work on a full-time basis, e.g. younger people/students, mothers who might not have access to full-time care for dependent children or who might not wish to work full- time, and older people who also might not want full-time work.

Section 7: Response to feedback on draft EIA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 63 vi. Calculation of impacts The calculation of impacts on existing centres is set out in the EIA at Table 6.3 on page 46. The approach to the estimation of trading impacts on each centre is set out in Section 6.3 of the draft EIA, at pages 43 – 45. The approach is not opaque, but rather sets out clearly the rationale for the estimates adopted. The scale and nature of the proposal, and its expected sales volume, are critical elements. In this regard, it is important to note that the total expected sales volume for the proposal (indicated as $127 million at 2017/18), is allocated across the network of existing centres.

Thus, to the extent that the eventual impact on any one or more centres might prove to be understated, then it means that the impact(s) on other centres will have been overstated.

In this instance, there are clearly evident principles which will determine which existing centres will be impacted and the likely extent of such impact. Those principles are the following:  The fact that the proposal is for a discount outlet centre, and that the great bulk of its sales will therefore be in apparel items (apparel defined as a broad category, comprising clothing, footwear, personal accessories and jewellery).  The fact that at present there is only one discount outlet centre available in Adelaide, and thus that centre is the only destination which metropolitan Adelaide residents can visit to undertake discretionary discount outlet shopping.

 The fact that the various regional centres available throughout Adelaide, in particular those provided throughout the northern suburbs of Adelaide, are the providers of the most extensive ranges of apparel shopping for residents of the defined trade area. These are all important qualitative factors which go to the heart of the assessment of anticipated impacts from the proposal, and which have been taken into account in the EIA.

Section 7: Response to feedback on draft EIA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 64 vii.

Implications of upcoming DPA for Briens Road, Northfield A DPA for a site located on Briens Road in Northfield, at its intersection with Grand Junction Road, seeks approval for the development of a neighbourhood centre of up to 6,000 sq.m of floor area, including a supermarket which is proposed to be in the order of 4,000 sq.m. The Briens Road site in question is also shown on Map 1 previously. MacroPlan Dimasi understands that an Economic Impact Assessment (EIA) has been prepared for the Briens Road proposal, and has concluded that the development can be comfortably accommodated in terms of supportable supermarket floorspace, and will assist in reducing the amount of escape supermarket expenditure from the local area.

The supermarket that is proposed to form part of the Gepps Cross Gateway proposal will be different in scale and nature to the proposed Briens Road facility, and will also play a noticeably different role to the Briens Road supermarket. As already noted at pages 5-9 of this report, the inclusion of a supermarket is common place within Australian factory outlet centres, including at Harbour Town Adelaide. Such supermarket facilities provide a level of convenience and enable shoppers who are already visiting the outlet centre in question to undertake some supermarket shopping, as well as enabling passing traffic to utilise the supermarket.

As also noted at page 6, the pattern of customer attraction for supermarket facilities in outlet centres is quite different to the typical neighbourhood activity centre pattern. The supermarket to be provided as part of the Gepps Cross Gateway proposal would also be considerably smaller, at approximately 3,000 sq.m, than the mooted supermarket for the Briens Road neighbourhood centre. The specific need for a neighbourhood activity centre, to be anchored by a supermarket, at the Briens Road site is quite a different proposal therefore to the proposal to include a smaller supermarket within the Gepps Cross Gateway proposal.

The Briens Road supermarket, when built, will serve a localised catchment, and can be expected to compete most directly with the Woolworths supermarket at Northgate Village as well as the Foodland

Section 7: Response to feedback on draft EIA Gepps Cross Discount Outlet Centre Proposed outlet centre development: Economic Impact Assessment 65 supermarkets at Walkley Heights and Pooraka, and the two Coles supermarkets at Ingle Farm. By contrast, the supermarket to be provided as part of the Gateway proposal will not compete directly with these various facilities. The Gateway proposal supermarket would be particularly convenient for workers in the Gepps Cross locality, including workers at the various retail, wholesale and manufacturing businesses currently accommodated at Gepps Cross, as well as the new workforce to be accommodated within the proposed Gateway outlet centre.

The supermarket would also be effectively utilised by customers of the outlet centre, who, as outlined in the March 2016 EIA for the outlet centre prepared by MacroPlan Dimasi, will be drawn from a very broad trade area, expected to extend from North Adelaide in the south to the Barossa Valley.

Finally, the planned supermarket at the Gepps Cross Outlet Centre will serve an element of passing traffic along Main North Road – something which will not be the case for the proposed Briens Road supermarket, which is to be situated at the intersection of Briens Road and Grand Junction Road. It can be concluded therefore that the two supermarkets will generally serve quite different customer segments and different purposes/roles, and can be expected to have different impacts on the surrounding activity centre networks, and particularly on the surrounding provision of supermarkets.

While there will be some overlap between the trading patterns of the respective supermarkets proposed to be provided at Gepps Cross and Briens Road, given the relatively short distance between the two (approximately 2 km) this analysis shows that the extent of such overlap can reasonably be expected to be minor.

The conclusion which can then therefore be drawn is that the two Economic Impact Assessments can largely be considered independently of each other, although if both supermarkets were to proceed, then one of the consequences of such an outcome would be that each would have some modest impact on the trading potential of the other.

You can also read