New Era for Invercargill - Scott O'Donnell 18 June 2018 REIMAGINED. REDEVELOPED. REVITALISED - Invercargill City Council
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New Era for
Invercargill
Scott O’Donnell
18 June 2018
REIMAGINED. REDEVELOPED. REVITALISED.
our city for tomorrow
Historic precinct continues
Don Street: $15m
north to Farmers
New ILT Hotel: $40m+
Watcher Place Art Area:
circa $15m
HWCP DEVELOPMENT
Kmart: $25m+
Historic Areas
Overview • Who will speak today • Communication plans moving forward • Why is this development important? • At Risk Earthquake Buildings • Heritage retention and creating demand for other heritage buildings
Format of S peakers • Overview – S cott O’Donnell, HWCP Chair • Des ign Update – J ames Burges s , Buchan Group (S cott & Boyd) • R etail Trends – Evan Harris , Colliers
Land updates s ince March 18
37 Esk Street – Turkish Kebabs
Kelvin Hotel
Reading Cinemas
Not owned by HWCP
Troopers ICC Owned
Memorial
16-18 Tay Street – “Hannahs” 36 Tay Street – Just Incredible
Communication plans • HWCP .nz (one s ource of the truth) • Opening of drop in centre on Es k S t (Later this week) • Community focus ed competition to create CBD name/brand • Market S outh will co-ordinate
Why is this Development Important • CBD is failing (commercially and structurally) • Invercargill has no centre • Look what the Stadium did for Dunedin ? • What will bring our own kids home ? • What if we don’t do something ? • Cultural trigger for Food, Entertainment, Art • Key SoRDS Project
Map of block NB S ratings
Economic Effects • Demand for Labour • Demand for Housing – rental and ownership • Effect on ICC rates • SoRDS: 10,000 people
Demand for Labour
• Estimate that 40% of construction cost is labour ($80m)
• This will range from 300-500 jobs pa to build CBD (3-5 years)
• Tiwai announced 100 new roles with 4th potline, Also ILT Hotel
Project Labour input p.a (No.) Labour input ($) Family multiplier
CBD 400 $80m 1600
ILT hotel 80 $16m 320
Tiwai 4th potline 100 $12m 400
TOTAL 580 $108m 2320 Demand for Hous ing
• Southland is at close to full employment as a community can expect
(under 4%)
• These new workers need to come from outside the local area
• 600 extra dwellings required to house those families, and or
Single person/ couples Workers accommodation ?? CB D Development affect on ICC rates
• Additional rates payable by this development $583k pa
• After normal uniforms charges from above, $442k from above can offset
rate increases to other rate payers
• This represents a possible saving of $19 per ratepayer pa
(Source ICC Finance Dept) P roject Timeframes
• Consent application to ICC by 30 July 2018
• QS and Business case by 30 Sept, then funding arrangements will
follow
• Demo to start early 2019
• Build time 3-5 years B uild Cos ts (bes t es timate before proper QS )
Cost to Build $200m ( bes t es timate to date, incl. land)
Les s HWR tower -$15m (will fund own project)
Les s Civic tower -$15m (will fund own project)
Les s Health Hub -$10m (can be on s old once completed, if required)
$160m P os s ible Funding Options • Assume 50/ 50 debt equity • Pick a figure of $150m (might need up to $170m pre on sale) • Therefore $75m of equity (5 shares @ $15m ea) • Early discussions with Community Trust, Ngai Tahu Property, ICC, HWR, Geoff Thomson, NZ Super, “Shane Jones Fund” • Possible syndication of a share ($15m with various owners) • Awaiting ASB direction following briefing
RETAIL TRENDS Evan Harris
RETAIL SALES Overall retail sales up 3.4% per annum Southland sales up 4.3% per annum March 2018 total core retail sales $17.74 billion Food and beverage (excluding supermarkets and fresh food) $2.874 billion or 16.2% Supermarket sales $5.068 billion or 28.6% Clothing $0.854 billion representing 4.8%
INTERNET SALES
Total online sales in New Zealand $4.2
billion or 7.6% of total retail sales
Excluding food and beverage the
percentage rises to 10.9%
Of all online sales offshore sites represent
32% (and rising at 12% per annum)
What will the effect of international GST
have ?THE INTERNET EFFECT
Category specific – what’s happened to music stores
The return of book stores
The discounting of cosmetics
F & B – Uber meals ?
“Artificial intelligence will
have its breakthrough
moment. More and more
retailers will start using it
to power various parts of
the retail and e-
commence experience”?????
Shopping centres used to devote 5%
Fine Dining
$$$$$$$$ of space to F & B
Full Dining
$$$$$$$
Currently this now stands at 15% and
Deluxe Café
$$$$$$
likely to go to 25%
Smart Casual
$$$$$ The rise of QSR
Cafés
$$$$
Food differentiation and the creation of
Fast Casual
$$$
an experience
QSR / Grab & Go
$$
Impulse / Kiosks
$THE FULLY INTEGRATED STRATEGY
Amazon and others now opening bricks and mortar stores
The integration of the various strategies. Farmers and Kmart have recently launched online
sites
The decline of catalogues
The search for online deals and information
Major Australian survey said 60% of Australians are considering or planning online shopping
sales
86% listed price is the most important factor followed by conveniencing
41% were using online sites purely for pricing not purchasing
This gives good retailers the opportunity to provide a strong online presence with information
and to convert browsers into customers at their bricks and mortar
Case study health post online then B&M 2014 – 75% growth from B&MTHE EXPERIENCE
Stores must create emotion – an experience – an event
They must create a reason to go there
“Customer
experience will
Social interaction
overtake price and
product as the key
Critical mass
brand differentiator
by the year 2020”
Branding
They must want to come here
The integrated strategy with online sites, websites, Facebook, Instagram
create a reason to go to “the experience”
Socialising – people are gregarious. The desire to be fond of others companyTOP TIPS
Chore shopping will become easier online, but the demand for “cherish” retail
will get stronger
Personalisation and customisation of products will prosper. Not just a name but
an example is Dresden Eyewear. Providing the world with unique and stylish
eyewear made to suit
Retailers who step up their social media strategies will survive. Modernise.
Don’t simply post some photos or updates, but use the networks and tell
stories and engage with the customer. Example Birchbox – uses Facebook
Live to share content and engage with fans
Data will drive retail decisions. Not just the big boys. Smaller players can
leverage data and gain insights using sophisticated retail reportingTOP TIPS
Healthy and environmentally friendly
lifestyles will be the focus for many
consumers
Retail store formats will become much
more diverse with the everything fits one
traditional format to decline
Focus on what makes you different – the
difference is being different. Don’t try and
imitate Amazon. Provide exceptional
personalised customer experience and
service
Provide an indispensable human
experienceSUMMARY
The rise of the conscious consumer will continue
The provision of the experience will ensure bricks and
mortar retail will continue to flourish
It’s all about how well you adapt
Use your online to create a desire for a B&M experience Des ign
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