Jones Lang Lasalle Report Style Guide
Central CoburgRetail and Commercial Analysisxx December 2008Department of Planning and Community DevelopmentClients Address
|Central Coburg Activity Centre |
|Retail and Commercial Analysis |
|19th March 2009 |
|Department of Planning and Community Development |
|GPO Box 2392 |
|Melbourne VIC 3001 |
DISCLAIMER
This report is confidential to the party to whom it is addressed for the specific purpose to which it refers. No responsibility is accepted to any third party and neither the whole of the report nor any part or reference thereto may be published in any document, statement or circular or in any communication with third parties without our prior written approval of the form and context in which it will appear.
We stress that the estimation of future demand, business trends, property prices, rentals and projected take up rates is a problematical exercise which at best should be regarded as an indicative assessment of possibilities rather than absolute certainties. The process of making forward projections of such key elements involves assumptions respecting a considerable number of variables which are acutely sensitive to changing conditions, variations in any one of which may significantly affect the outcome and we draw your attention to this factor.
You should be aware that the financial analysis and conclusions contained within this report do not purport to represent a valuation in the conventional sense. It is an exercise involving only a relatively few variables, such as zoning information and a general knowledge of background market conditions, whereas, a valuation involves a detailed investigation of the property including, where appropriate, the nature of the locality, surrounding properties, full inspection, site peculiarities, the nature, quality and condition of improvements, comparable sales, market trends, yields, competition, design and layout and so on. The market value could be greatly affected by such factors, and by encumbrances, restrictions, or other impediments on Title which have not been considered in this report.
Accordingly, we regard the financial analysis contained herein as indicative only and not authoritative, merely a precursor to a formal valuation, not as a substitute for it. No responsibility is accepted either to the recipient or to any third party for any loss or damage which may result from the financial analyses use including, without limitation, loss or damage arising from any financing, purchasing or leasing transaction.
TABLE OF CONTENTS
1. EXECUTIVE SUMMARY i
2. INTRODUCTION 1
3. Policy Context 2
3.1 Melbourne 2030 2
3.2 Central Coburg 2020 Structure Plan 3
4. Literature and Data Review 4
5. Economic, Social and Infrastructure Context 6
5.1 Local Demographics 6
5.2 Local Economy (LGA) 7
5.2.1 The Role of Central Coburg 7
5.2.2 Industry profile 7
5.2.3 Location and Transport Initiatives 7
6. The Local and Regional Property Market 9
6.1 Commercial Office market characteristics 9
6.1.1 Commercial Office Market 9
6.1.2 Competing Supply 9
6.1.3 Principal Activity Centres – Office Characteristics 15
6.1.4 Commercial SWOT Analysis 15
6.1.5 Commercial Floorspace 16
6.1.6 Market Indicators 16
6.1.7 Characteristics of the Melbourne suburban Office market 18
6.2 Retail Market Characteristics 21
6.2.1 Competing Markets – Northern Metropolitan Area 21
6.2.2 Central Coburg – Retail Overview 26
6.2.3 Retail Mix 29
6.2.4 Retail Vacancy and Performance 30
6.2.5 Retail Rents 31
6.2.6 Retail SWOT Analysis 32
6.2.7 Trade Area Analysis 33
7. Supportable Floorspace 41
7.1 Commercial 41
7.1.1 Low Case 41
7.1.2 High Case 41
7.2 Retail 44
8. Spatial Analysis 47
8.1 Option 1 – ‘Structure Plan’ Option 48
8.2 Option 2 – ‘Consolidated Development’ Option 49
8.3 Option 3 - 'Low Scale/Fragmented Development' Option 52
9. Retail Use Matrix 54
9.1 Principles / Objectives 59
10. Recommendations and Facilitation Strategy 60
LIST OF TABLES
Table 6.1.1: Competing supply: Competitive Advantages and Disadvantages 11
Table 6.1.2 Commercial SWOT Analysis 15
Table 6.1.3 Primary Office Stock in Central Coburg 16
Table 6.1.4. Coburg Commercial Rental Rates 17
Table 6.1.5 In-centre vs Out-of-Centre Suburban Office Development 18
Table 6.1.6 Historical Take up by Sector (sq.m), 2004 – 2008 19
Table 6.2.1: Central Coburg Competing Retail Centres and Precincts 25
Table 6.2.2: Melbourne 2030: Principal Activity Centres & Central Activities Districts - Comparison 28
Table 6.2.3: Central Coburg Specialty Retail Composition –v- Regional Centres 29
Table 6.2.4 Retail SWOT Analysis 32
Table 6.2.5: Demographic Profile- Selected Medians: Moreland and Central Coburg MTA, 2006 34
Table 6.2.6: Demographic Profile- Age and Sex: Moreland and Central Coburg MTA, 2006 35
Table 6.2.7: Demographic Profile- Birthplace: Moreland and Central Coburg MTA, 2006 36
Table 6.2.8: Demographic Profile - Income: Moreland and Central Coburg MTA, 2006 36
Table 6.2.9: Demographic Profile- Housing: Moreland and Central Coburg MTA, 2006 37
Table 6.2.10: Demographic Profile- Occupation: Moreland and Central Coburg MTA, 2006 38
Table 6.2.11: Demographic Profile- Method of Travel to Work: Moreland and Central Coburg MTA, 2006 38
Table 6.2.12: Demographic Trends: Moreland LGA, 1996 - 2006 39
Table 7.1.1. Moreland FIPB employment vs qualification 42
Table 7.1.2. Low and High Case Office demand projections – Coburg 43
Table 7.2.1 Trade Area Population Growth 44
Table 7.2.2 Trade Area Spending Growth 44
Table 7.2.3 Total Retail Market Share 45
Table 7.2.4 Retail Floor Area by Category 46
Table 8.1.1 Option 1: Structure Plan Option 48
Table 8.1.2 Option 2: Consolidate Development Option 51
Table 8.1.3 Option 2: ‘Low Scale/Fragmented Development’ Option 53
Table 9.1.1 Land Use Matrix 54
LIST OF FIGURES AND CHARTS
Figure 2.1.1 The Study Area 1
Figure 5.1.1. City of Moreland – Forecast Rate of Population Increase (year to June 2008-2021) 6
Figure 6.2.1: Central Coburg – Location and Competing Activity Centres 24
Figure 6.2.2: Coburg Principal Activity Centre - Precincts 26
Figure 6.2.3: Retail Catchment and Competitive Centres: Coburg PAC 34
Figure 6.2.4: Distribution of High Income Households, City of Moreland 2006 40
Figure 8.1.1 Option 1: Structure Plan Option 48
Figure 8.1.2 Option 2: Consolidated Development Option 50
Figure 8.1.3 Option 3: ‘Low Scale/Fragmented Development’ Option 52
EXECUTIVE SUMMARY
Competing Markets
Central Coburg currently competes with both Major and Principal Activity Centres primarily within a 5km radius of the centre. With both Central Coburg and Preston designated as Principal Activity Centres but not currently providing the range of commercial and retail services sought of PACs, strong competition could emerge between these two centres.
There is relatively weak commercial office competition in the immediate vicinity, with developers and occupiers reluctant to invest in traditional main street style precincts. Coburg has advantages over some competing markets, with large sites available in the core as well as on the periphery, in particular within the Pentridge precinct.
Revised Baseline Data
Our modelling suggests that up to 15,920m2 of additional commercial floorspace is supportable for the Coburg PAC to 2021. This is based on a high case scenario and is subject to a number of assumptions occurring, including major tenant pre-commitment to development. It is also our recommendation that much of the current commercial floorspace is redundant and will need upgrading to cater for corporate office occupiers, which will increase the requirement to up to 30,000m2 of new office space by 2021.
The analysis of the potential retail trade area suggests that total supportable floor area will increase by 17,500m2 to 2021. Similar to the current commercial floorspace, much of the existing retail floorspace is secondary and does not achieve economic turnover levels. Therefore, it is anticipated that new retail development will exceed total supportable floor area, with development replacing secondary floor area over time.
Redefining the Commercial and Retail Core
We consider that the retail core should be limited to Precincts 2 and 3 as identified in the Structure Plan. Precinct 6 (Sydney Road/ Bell Street commercial) fronts Bell Street and Sydney Road to the north and is somewhat on the periphery of the rest of the core retail precinct. It has limited opportunities for major retailing due to the relatively narrow depth of blocks fronting the main streets. Precinct 9 covers the Pentridge redevelopment, and will provide a mixed-use development function.
Spatial Analysis
While all three spatial land use options have positive elements for the development of the Coburg Activity Centre, the Consolidated Option ie Option 2 is likely to deliver the greatest benefits for the Centre in terms of creating a critical mass of retail and commercial development in the key blocks between the Rail Station and Sydney Road, south of Bell Street.
The at grade parking area near the oval provides for a range of future commercial opportunities, while providing valuable car parking for existing businesses and in relation with the use of the oval.
Concentrating major new development behind Sydney Road retains the fine grain of Coburg’s main street while an expanded retail offer should act as a catalyst for upgrading Sydney Road frontages.
Our strategies and future work required to activate the Coburg PAC and improve its performance to its optimal potential are given below;
Retail Development
Attracting a non-food anchor tenant is considered critical to changing Central Coburg from a lower order convenience based shopping precinct to a higher order destination centre, offering both convenience and comparison shopping opportunities. Initiate discussions with the major discount department store operators to discuss the Central Coburg opportunity as well as their requirements to potentially anchor future development (in terms of footprint, location etc.) Big W, for example, is not well represented in the inner northern metropolitan area.
Concentrate the first stage of the revitalisation process on the western side of Sydney Road. We consider it is preferable to build on the relatively solid base of convenience shopping located between Sydney Road and the railway line.
Improve east-west links between majors and Sydney Road. Key sites in this regard include the Victoria Mall, The Markets building and existing Coles on Sydney Road. New major development should look at opportunities to link through to Sydney Road.
Balancing modern retail development with traditional high street development. While there has been a strong push in retail development towards “new urbanism” principles, focussing activity on the main street rather than in malls behind the main street, such principles need to be balanced with commercial realities. The existing ownership structure provides significant opportunities for major retail development behind Sydney Road, anchored by key supermarket, discount department store or mini-major tenants. This development should improve the overall commercial viability of the retail precinct, increasing foot traffic and potential rents along Sydney Road, which in turn will promote upgrades to properties fronting Sydney Road. Don’t lose sight of the fact that modern retail development can and should act as a catalyst for upgrading the “main street”.
Promote clustering of complementary retailers by facilitating tenant relocations. This would likely require a degree of council/government funding to assist with the relocations, but in the long run will provide better economies of scale for these occupiers, and assist in attracting stronger performing retailers.
Redevelopment of Library: This site occupies a strategic site on Victoria Mall but does not provide an activated frontage to this key public area. There is an opportunity for the frontage to be redeveloped for retail uses, the library to open up to the plaza as a community centre or possibly the library to be relocated as part of a future retail development, with this site developed for retail uses.
Activating Sydney Road: Streetscape improvements and building upgrades to provide higher quality tenancies are critical to encouraging a vibrant, active retail environment along Sydney Road. We consider this should and most likely will occur organically, with the attraction of a high profile non-food anchor tenant and supporting new retailers being a key driver. Improved east west links will be critical to ensure Sydney Road benefits from new investment. The tram line itself provides a form of activation. While many of the every day, national chain retailers may be drawn to a modern retail development set behind Sydney Road, we consider that a more unique and eclectic group of specialty retailers, cafes and restaurants will be drawn to the main street, that builds on the existing Coburg character. Council can help facilitate this by careful consideration to the linkages between Precinct 2 and Sydney Rd (as mentioned above), preferably via interesting laneway style access, as well as Victoria Mall.
Commercial Development
We consider that significant commercial development will only occur once retailers appropriate for servicing a corporate tenant are in place (eg good cafe/restaurants, high quality service retail) and relative streetscaping is undertaken. Therefore, commercial development of the precinct should be staged at the later end of the revitalisation. That said, certain precincts, including Precinct 9, are development ready for some of the smaller, local occupiers, and development here could be occur in the earlier stages of the revitalisation process.
Target Tenants - tenants that typically don’t need to be located in the inner city, and can benefit from close proximity to export markets (the airport, Hume Freeway) as well as manufacturing/supplier base. Good examples include fashion/apparel type tenants, creative firms/advertising agencies, IT firms who have a largely back office function and won’t pay CBD rents, Call Centre operations with limited face to face contact with customers, as well as the local business services sector who are looking for a professional base to access their surrounding market.
Government Occupiers – position Central Coburg as ‘development ready’ in order to attract government tenants that are looking for a northern suburban ‘home’.
Development Make-up – while remaining flexible with regards to the available development sites (and therefore ultimately developing according to demand), we suggest that the tenant mix should be targeted towards the following;
• Large (2,000m2 +) tenants to be located on the larger development parcels in Precinct 3. Developments of this size will require pre-commitment, and will have a greater need to be co-located with public transport. We envisage this to be a medium to longer term strategy, as a significant level of retail and streetscape improvement will need to occur before Precinct 3 is realistically ready for Commercial activation.
• Small to medium strata titled space could be developed in the early stages in Precinct 9 (Pentridge). It is noted that a small strata development (approx 750m2) is already completed. These firms will be attracted to the service retail to be provided at Pentridge, and a location on the periphery of the core can be attractive to those firms who have a car parking and car access requirement (Bell St), while still being relatively close to trams and rail.
Pro-active search for major commercial tenant. We recommend putting together a professional prospectus (in conjunction with the major development partners), available on The Coburg Initiative website, detailing the available development parcels and the estimated NLA available for development at each. Separate documents should be generated for the smaller, local business services sector (up to 2,000m2) to the larger occupiers who will be looking at larger development footprints. Distribute prospectus to the major Tenant Representative firms, as well as local real estate agents.
Other
Site Impediments – There are a few sites that are strategically located in the western core and adjacent to the major council-owned development parcels that have the potential to present impediments to development. These sites are currently occupied by Dimmeys and Bargain Homewares and Gifts, and present significantly run-down facades. Relocation of these occupiers should be considered, to allow for regeneration of the occupied land.
Car Parking – Much of the proposed retail, commercial (and possibly residential) will be built on current car parking allotments. While wanting to encourage increased use of public transport in the longer term, parking will still be an important requirement for a customer base that is accustomed to plentiful parking, as well as the commercial occupiers (who will usually require a car park ratio of 3-4:100m2). We therefore recommend that adequate parking is a key consideration in all new retail/commercial development.
INTRODUCTION
Jones Lang LaSalle were commissioned by the Department of Planning and Community Development (DPCD) to produce a report analysing the current and future retail and commercial markets in the Coburg Principal Activity Centre (PAC). These markets will be analysed in both a current context and a future context, with specific consideration given to Coburg’s role as a PAC under the Melbourne 2030 planning strategy.
In looking at a future context, this report will provide advice as to the suggested retail and commercial core and the role of periphery precincts, as well as updated data as to the supportable retail and commercial floorspace to 2021. The type and mix of potential retail and commercial operators will be addressed, as well as a suggested spatial positioning of this floorspace. Finally the report will recommend strategies to position Coburg as a viable and successful PAC by 2020, and to achieve the aims of The Coburg Initiative.
The Study Area
The area covered by this study incorporates ten precincts that constitute the Coburg PAC.
Figure 2.1.1 The Study Area
source: DPCD, MCC
Policy Context
Coburg has been identified as one of Melbourne’s Principal Activity Centres under the Victorian State Government’s Melbourne 2030. This classification means Coburg has an important role to play in the Activity Centre hierarchy as a focus for community activity, services and investment and, as such, Melbourne 2030 identifies Coburg as a location for government investment and support.
Moreland City Council has prepared the Central Coburg 2020 Structure Plan, an extension on the Central Coburg 2020 background report and vision initiated in 2000, to guide the future development of the Coburg Principal Activity Centre.
The Coburg Initiative is an implementation project through which the objectives of Central Coburg 2020 will be realised.
The policy context of Melbourne 2030 and Central Coburg 2020 is provided below.
1 Melbourne 2030
The Victorian State Government has developed Melbourne 2030 as a planning guide to direct the development of metropolitan Melbourne over the next 30 years. This vision focuses (amongst other elements) on growth and urban renewal at key activity centres where public transport, infrastructure, business and community services already exist.
Along with the provisions of Melbourne 2030, the State Government announced the Expert Assistance Program, which provides funding to source specialist expert advice to finalise and implement structure plans for ‘development ready’ activity centres, of which Coburg is one of the beneficiaries. This has been a major catalyst in the development of the Central Coburg 2020 Structure Plan and Strategy.
Recently, Melbourne 2030 has undergone further refinement, described in the Melbourne @ 5 million planning update. Six former Principal Activity Centres have now been identified as Central Activities Districts (CADs). Investments in CADs will build on the Transit Cities Program, which served as the initial demonstration program for Transit Oriented Development. The six identified CADs are Box Hill, Broadmeadows, Dandenong, Footscray, Frankston and Ringwood. Employment Corridors that link activity centres, universities, research and technology precincts, medical precincts and areas with high employment have also been identified. Three employment corridors will be given priority attention by the government, including the corridor linking Monash University/Chadstone to Box Hill, Austin Hospital and Bell Street through to Preston and Coburg.
Following on from Melbourne 2030, the Victorian Government has released the Retail Policy Review: Discussion Paper, October 2008, which specifically looks at issues affecting the development and provision of retail uses. This review has come about as a result of range of issues that affect the retailing sector and how we will shop in the future. These include issues such as competition, climate change, petrol prices and development control. These issues, together with the strong population growth that Melbourne and Victoria are experiencing will place pressure on the sector to meet future demand.
The key principles guiding the review call for planning policy that is consistent, supports activity centre policy, promotes healthy competition and innovation, allows for growth and change, and supports the development of multi-use activity centres that promote “community” and a “sense of place”.
The key issues identified are a reflection of concerns raised in recent years; for example, the location of bulky goods retailing and the design of shopping centres and their contribution to the public realm.
2 Central Coburg 2020 Structure Plan
The Central Coburg Structure Plan 2020, together with the Coburg Initiative, provides a blueprint for its transformation over the next 12 years, to ensure consistent consideration for major changes to land use, built form and public spaces.
The report is intended to guide the growth and development of Central Coburg into a prime shopping, living, employment and activity precinct; improving streetscape, character, quality of life and environment, encouraging economic expansion and improving transport infrastructure.
The key structure plan objectives are:
Retail
▪ Increase floor space by approximately 25,000m2 and improve quality of existing supply
▪ Expand range and variety of retail opportunities available without losing the authentic character of Coburg or dispersing provision of core retail from main retail precinct
▪ Prevent poor utilisation of space by encouraging big-box retail and showrooms away from core
Entertainment
▪ Provide restaurant and other entertainment facilities to promote liveability and support evening activities
Commercial
▪ Encourage Government tenants to act as a catalyst to improve quality of office space, essential to encouraging the business service sector
▪ An additional 10,000m2 to 25,000m2, based on forecasts of employment growth, will be required by 2021. A projection of 40,000m2 has been accommodated within the Structure Plan.
The focus of development will be at the activity centre core, north of Harding Street and south of Bell Street, with key objectives as follows:
▪ Consider commercial development adjacent to station
▪ Look at redevelopment of supermarket district to improve utility and attractiveness of space
▪ Improve mix of main retail section along Sydney Road
▪ Balance the retail draw by attracting a supermarket to the east side of Sydney Road
Literature and Data Review
We have utilised numerous existing reports and studies undertaken by various consultants and supplied to us by Moreland City Council. Jones Lang LaSalle has sought to verify this information where appropriate and where time has permitted.
The primary sources of external information that we have relied upon, and their key relevant points, include the following:
The Coburg Initiative, .au, 2007
This Council program is a strategic partnership with Equiset Grollo to develop and co-ordinate delivery of the Central Coburg 2020 Structure Plan. Moreland City Council seeks to “create an environmentally sustainable and liveable city, where people can shop, work and socialise locally”.
SGS Economics and Planning, Central Coburg Economic Analysis Discussion Paper, Provided by Moreland City Council, 2001
▪ Coburg is a net employer, and manufacturing as an employer is declining in Coburg
▪ Low levels of educational attainment is potentially a constraint, though this is improving
▪ Traditional Industrial is an inappropriate future use for Central Coburg
▪ The study area has 42,205m2 of shop-front retail space, and trades strongly as a local centre, and has a high proportion of car trips
▪ Central Coburg could host an increasing number of smaller offices, but it was considered unlikely to become a centre for larger office developments in the near future
▪ There is potential future demand for additional retail floorspace, largely as a result of the Pentridge development. There is also stiff competition from other centres in attracting a Discount Department Store (DDS), and its not apparent what benefit this would bring to the community.
This report was commissioned in 2001, and as such much of the data and analysis is out of date. We also consider that their outlook for Central Coburg was not based on its uplift potential as a Principal Activity Centre (PAC).
SGS Economics and Planning, Central Coburg Development Options Appraisal, Provided by Moreland City Council, 2005
▪ ‘Vision 2020’ is the preferred redevelopment option
▪ A maximum of 9,500m2 of additional retail space is required. This is based on the findings of the SGS report conducted in 2001
▪ In forecasting office space, SGS use three different methods, that yield quite different results. The range of these forecasts is between 10,083m2 to 22,467m2.
The report again uses outdated data and methodology with which to base robust retail forecasts on. We also consider that the office floor space ratio (FSR) used (floorspace required per employee) is very high by current FSR standards, and that this overestimates the level of office space that is supportable (based on these models).
Maunsell/Aecom, Moreland Retail and Commercial Land Use Study, Provided by Moreland City Council 2006
▪ Constraints in investment in commercial and retail space are historical in nature
▪ Significant leakage (in all Moreland) to competing retail centres
▪ Moreland not likely to become a home for large corporate enterprises
▪ A loss of local retail capacity has meant the loss of retail capacity in general as large shopping centres and big box retailers have not established a significant presence in the city.
▪ Overall retail sales in Moreland equal only 71% of the total household retail spending. Specialised food retailing is the most successful retail sector (after footwear), with a sales to spend ratio of 83%. Clothing has a sales to spend ratio of 50%.
▪ Moreland – Coburg has a shortfall of 43.9% of business services
▪ Moreland’s office market is constrained by a lack of physical stock offered as firms require floorspace to be in place before they consider relocation.
▪ In Moreland, the built form retail available has stayed mostly consistent over the past 20 years.
▪ General research suggests that demand for office space in suburban markets will increase over time, however, demand alone is not enough to drive development. A broader strategy of creating better places and higher grade activity centres should form the beginnings of transformation in the medium term.
We note that this report was not finalised by Moreland City Council, and as such the findings are not considered as appropriate background findings. Rather, this report has been used as a guide to the current retail and commercial makeup, and to what level of retail leakage is occurring.
SGS Economics and Planning, Northern exposure – Drivers of Office Development in Melbourne, 2007
▪ Analyses trends in office demand in Melbourne’s North
▪ Three broad factors that are reshaping the potential for office development in the North; customer value and the ‘new economy’, changing work patterns and government policy and public investment.
▪ Northern Region can support 560,000m2 of additional floorspace to 2021.
This report provides some useful strategies for promoting office development in the Northern Melbourne region.
Village Well, Sydney Road Coburg Business/Marketing Plan, September 2005.
▪ A consultative approach amongst key stakeholders to strategically re-position Coburg Shopping Centre.
▪ The recommended future vision is ‘Coburg is the vibrant heart of Moreland. It offers something for everyone, with an authentic multicultural character’.
Economic, Social and Infrastructure Context
1 Local Demographics
For the purposes of this study, Jones Lang LaSalle has analysed socio-demographic trends for both the City of Moreland local government area and the defined catchment area of Central Coburg in its function as a Principal Activity Centre and compared these profiles against metropolitan Melbourne. This analysis is in Section 6.2.7 Trade Area Analysis.
Moreland LGA comprises a total land area of approximately 51 square kilometres with an estimated resident population of around 144,018 people in 2007[1]. It is made up of 12 suburbs including Brunswick, Brunswick East, Brunswick West, Coburg, Coburg North, Fawkner, Glenroy, Gowanbrae, Hadfield, Oak Park, Pascoe Vale and Pascoe Vale South.
Between 1991 and 2001, the population of Moreland decreased from 138,489 people to 136,381 people in 2001; an average annual decrease of 0.15 per cent[2]. At the same time, Melbourne Statistical Division’s (MSD) population increased at an average annual rate of 0.96 per cent. Since 2001, Moreland’s population has shown modest growth.
Looking ahead, the population of Moreland is anticipated to rise by approximately 16,500 between 2007 and 2021, or an average of approximately 0.8% per annum. About 9,700 new households are expected to be added to accommodate for this increase.
Figure 5.1.1. City of Moreland – Forecast Rate of Population Increase (year to June 2008-2021)
Source: Jones Lang LaSalle Strategic Consulting, DPCD Victoria in Future 2008
[pic]
2 Local Economy (LGA)
1 The Role of Central Coburg
Historically, Central Coburg has been seen as an entry point for low-cost business start-ups, including recent migrants that have located in the Coburg region. As such, Central Coburg is culturally diverse with a variety of food offerings, fresh produce retailing and other specialty retailing that reflects its cultural diversity.
2 Industry profile
In the wider Coburg area, the dominant industries of employment are manufacturing, retail trade, health and community services and education. Traditional manufacturing remains a significant employment base north of the activity core, particularly off Gaffney Street in Coburg North/Pascoe Vale. The recent development of bulky goods in the area (Lincoln Mills) has broadened the employment base of the area.
The largest concentration of employment is located in the core precinct of Central Coburg. Over 250 retail shop-fronts offer the majority of employment with significant concentrations in food, groceries and discount clothes and variety retail. A large number of these businesses are held under small holdings, and many run on low rent and low turnover. Anchoring these specialty stores and contributing to the retail employment are a number of big box retail premises on the West side of Sydney Road, including three major supermarkets, Dan Murphys and discount retailer, Dimmeys.
Health and community services employment is scattered in suites amongst the retail within the arcades and on the fringe of the central activity core. Education employment is important, with two Kangan Batman TAFEs located along Sydney Road (one north of Moreland Road, and the other north of Gaffney Street), supplying vocational education services for the health, community, automative and business services industries.
What is lacking is a strong financial and business services sector. Commercial employment is limited to small shop-top offices and business and personal services operations, including tax consultants, independent financiers, real estate agents and bank branches.
There are some modern commercial offerings and opportunities south of Munro Street, such as 321 Sydney Road redevelopment proposal and the recent development of 240 Sydney Road. However, demand for this space has been thin with few professional services businesses operating in the area.
3 Location and Transport Initiatives
Roads
Central Coburg has a highly connective arterial road network, with accessibility to central Melbourne via Sydney Road, eastern suburbs (via Bell Street and M3 - Eastern Freeway), and the airport and major interstate and intrastate routes (via the M2 – CityLink, Tullamarine).
At the local level, Central Coburg exhibits a traditional grid pattern and road network, with the core retail and commercial precinct adjacent to the intersection of Bell Street and Sydney Road.
High traffic volumes along Sydney Road and Bell Street provide significant exposure for businesses but reduces amenity for both shoppers and employees. One way and left in/left out streets within Central Coburg have impacted on traffic circulation and restrict access to parking within the core.
Previous studies undertaken for VicRoads indicate that a significant proportion of truck movements occur on the major arterial roads in and around Coburg – such as Bell Street and Gaffney Street.
Rail, tram and buses
Coburg Station is on the Upfield railway line and is located near the western boundary of the activity centre. Trams also run along Sydney Road, providing commuting services to Flinders/Elizabeth Streets in the Melbourne CBD.
Current transport provisions are summarised below:
▪ Upfield railway line
▪ No. 19 tram to Flinders St, via Royal Parade, Sydney Rd
▪ On-road bike lanes and Upfield Bike Path and Merri Creek Trail.
▪ Various bus lines connecting Coburg to various northern suburbs, including Reservoir, Preston, Campbellfield, Fawkner, Glenroy and Brunswick.
New Transport Initiatives
The Central Coburg 2020 Structure Plan – Integrated Transport Strategy and the Central Coburg Transport Interchange Feasibility Study, makes recommendations on various transport initiatives, including;
• The introduction of a new bus interchange on Victoria St, along the main east-west pedestrian axis
• The widening of Bell St requiring an amendment to the Public Acquisition Overlay (PAO). The C82 Planning Scheme amendment is currently awaiting ministerial approval
• The proposed change of Urquhart Street and Elm Grove to local area access only
• A new north-south street proposed east of Russell Street
The Local and Regional Property Market
1 Commercial Office market characteristics
1 Commercial Office Market
As an inner northern suburb close to the Melbourne CBD, Coburg has not evolved as a significant office market in a regional context. Its fragmented land ownership patterns and limited demand sources have precluded any large scale commercial development. As a relatively localised market, primarily serving the needs of the resident population, there is no data available on the take up of space in the area. A recent survey completed by the DPCD on economic uses of land in the Central Coburg PAC has identified 16,734m2 of space occupied and used for office related purposes. We also estimate there is approximately 10,000m2 of government-related office space (eg. council chambers), based on JTW data.
Most of Central Coburg’s commercial premises are found along the Sydney Road core and south, with smaller pockets on Harding and Waterfield Streets. Recent commercial office development proposals include 240 Sydney Road and a redevelopment of 321 Sydney Road, south of Munro Street. While outside of the core Sydney Road area, QM Commercial on Pentridge Boulevard will provide seven high quality small strata office suites.
Current office stock in Coburg is ageing, and the vast majority of buildings would be considered under the Property Council of Australia’s (PCA) office grading system as C-Grade or below. The basic requirements of each grade are:
• Premium-Grade – A landmark office building located in a major CBD office market. Includes expansive views/outlook, ample natural lighting, prestige lobby and lift finishes, prestige quality access from an attractive street setting, high quality lift ride, premium presentation and maintenance. Minimum 1,200m2 floorplates (Sydney/Melbourne) and ABGR and Green Star rated.
• A-Grade – High quality office space including good views, outlook and natural light, good quality lobby and lift finishes, good access from an attractive street setting, good quality lift ride, high quality presentation and maintenance. Minimum 900m2 floorplates (Sydney/Melbourne) and ABGR and Green Star rated.
• B-Grade – Quality space with a good standard of finish and maintenance. ABGR accredited rating.
• C-Grade – Average quality space
• D-Grade – Poor quality space
Most new stock coming onto the market in the CBD, Docklands and major suburban markets is A-Grade, as this is the minimum standard that corporate tenants will require to pre-commit to a building. As such, Coburg’s office market in its present state will be unable to attract any significant corporate office tenants.
2 Competing Supply
In order for Central Coburg to initiate concentrated commercial development, it needs to be ignited and recognised as an urban commercial hub. This means drawing large commercial tenants to the area by making it the most attractive option, in terms of location, price, quality and access to amenity, staff and transportation. An investigation of the likely competing supply is necessary to identify the alternatives a tenant may consider and the foreseeable benefits of relocating at other sites. In assessing competing supply, consideration needs to be given not only to geographically competing locations (eg. Moonee Ponds), but areas that could conceivably cater to the same tenants/occupiers, within a reasonably comparable location (eg. University Hill).
Table 6.1.1: Competing supply: Competitive Advantages and Disadvantages
source: Jones Lang LaSalle Strategic Consulting, Brunswick MAC Economic Analysis and Issues Paper, May 2007 (Tim Nott), Glenroy MAC Economic Analysis, 2008 (Tim Nott)
|Location |NLA (m2) |Advantages |Disadvantages |Future Supply |
| |
|Central Activities Districts |
|Footscray |41,345m2 |Recognised in the recent Melbourne 2030 update as a Central |The suburbs overall poor reputation amongst commercial operators |No major new development |
| | |Activities District (CAD), and as such will receive significant |will need to be overcome | |
| | |financial assistance from the State Government to promote |High retail vacancy and limited diversity in retail offering | |
| | |residential, commercial and infrastructure development in the area.| | |
| | |Close proximity to Melbourne CBD with access via train, tram and | | |
| | |car | | |
| | |New cross-city tunnel (Footscray to Caulfield) will increase | | |
| | |assessibility to the area, and encourage speculative development | | |
| | |Gentrification is creating further opportunities for firms to tap | | |
| | |into the local workforce | | |
|Broadmeadows |- |Promoted as a Central Activities District (CAD) under the recent |Overall poor reputation as a suburb |Gateway Corporate Park – 1,964m2 |
| | |Melbourne 2030 update |Low socio-economic area with limited access to appropriate |approx. Due 2009 |
| | |Will receive significant State Government funding and support to |workforce |61 Riggall St – previously Ericsson |
| | |achieve the objectives of Melbourne 2030 |Distance to other commercial centres – likely only to serve |Headquarters. Building to be fully |
| | |Serviced by major train station, and good retail amenity |government and limited population-based office usage. |refurbished. Approx 4,500m2 of office, |
| | |Strategic sites available within the Town Centre | |930m2 floorplates. |
| | | | |DImboola Rd and Pearcedale Parade – CGA|
| | | | |Bryson building. Two new buildings, |
| | | | |1200m2 and 330m2. Child care centre and|
| | | | |retail on ground floor. Due May 2009. |
| | | | |6,000m2 council chambers currently |
| | | | |under construction |
|Box Hill |132,050m2 |A developed critical mass of office space |Lack of development sites available |various strata developments totaling |
| | |Hospital and TAFE act as ‘anchor’ office tenants, and attract |TAFE premises can encroach on available office space / dissuade |approximately 5,000m2 |
| | |associated commercial |some tenants due to the high student population | |
| | |Located in a medium-high socio-economic area – plentiful | | |
| | |surrounding workforce | | |
| | |Major train station provides ease of access | | |
| | |Central to the Monash Uni to Bell St employment corridor | | |
| |
|Principal Activity Centres |
|Moonee Ponds |40,276m2 |Large anchor tenants ATO and Foxtel – critical mass of office space|Downside, few available sites for development |Mirvac retail/commercial development |
| | | |Higher consideration for rent. |(3,184m2 of office) – due for |
| | |New supply with Mirvac currently constructing a investment grade | |completion early 2009 |
| | |mixed use development just off Puckle Street. | |4,800m2 of ex-Foxtel call centre space |
| | |Inviting streetscape and has undergone significant gentrification | |still available |
| | |Minimal traffic congestion through Puckle Street, with high | | |
| | |exposure to public transport with train and tram and bus access on | | |
| | |either side of the core activity centre. Importantly, bus access | | |
| | |provides for non-radial transportation movements through other | | |
| | |northern suburban areas. | | |
| | |Greater diversity of retail | | |
| |
|Major Activity Centres |
|Carlton |58,888m2 |Sought after area with extremely good retail and cafe/restaurant |Parking is an issue for occupiers and their clients, as is quite | |
| | |amenity |heavy traffic congestion in peak hour times along Victoria Pde and| |
| | |Range of size/quality options for tenants |Alexandra Ave. | |
| | |Good tram access |Some stock is old/inappropriate for major corporates i.e. terrace | |
| | | |conversions | |
| | | |Encroachment by Melbourne University | |
| | | |Large student population deters some tenants | |
| | | |Lack of and competition for appropriate development sites | |
|Glenroy |10,000m2 |Access to public transport via Train Station |Poor perception as an office precinct |Glenroy Business Centre (995m2) |
| | |Glenroy is a strong net exporter of office worker |Competitive pressures from nearby centres | |
| | |Good road access (Pascoe Vale Road, Bell St, City Link, Western |Industrial presence in the MAC | |
| | |Ring Road) | | |
|Brunswick |2,465m2 |Excellent local retail/cafe amenity |Large industrial presence | |
| | |Good public transport access (trains and trams) |Competitive pressures | |
| | |Proximity to the CBD |Developer preference for residential | |
| | |Access to workforce | | |
| |
|Specialised Activity Centres |
|Melbourne Airport | |Good access to Melbourne Airport and Melbourne CBD via Tullamarine |Isolated location from main northern residential suburbs | |
| | |Freeway |Limited retail offering | |
| | |Ability to have large storage warehouses and showrooms adjacent to |Stigma associated with being adjacent to industrial precincts | |
| | |office space |Distance from Melbourne CBD | |
| | |Ideal for logistics operators |Facing competition from Essendon Airport | |
| | | |Poor performance of office developments thus far | |
|University Hill, |9,000 – 10,000m2 |Commercial success in attracting large purpose built occupiers (eg.|Limited public transport amenity |2 further buildings to be released |
|Bundoora | |VicRoads) and professional service firms to quality strata space |Isolated development relying on containment of retail and other |consisting of 4,100m2 and 3,300m2 |
| | |Available land to develop purpose built offices |services | |
| | |Good road accessibility via Metropolitan Ring Road and Plenty Road | | |
| | |Proximity to two large education facilities in RMIT and LaTrobe | | |
| | |Bundoora campuses | | |
| | |New amenities and build | | |
| | |Adjacent to a major new residential development, hotel and | | |
| | |conference hall | | |
| | |Single ownership/developer structure allows for greater control | | |
| | |over the development patterns, and a more wholesale approach to the| | |
| | |development. | | |
| |
|No Activity Centre Status |
|Essendon Fields |Approx 15,000m2 |Ideal for logistics and aerospace companies with ideal proximity to|Limited public transport |Developer anticipates building 5,000m2 |
| | |Melbourne Airport, the ports and Melbourne CBD via |Inability to own premises because on Crown land |of office space per annum, though this |
| | |CityLink/Tullamarine Freeway. |Isolated and poor retail offering, requiring workers to travel to |will be based on demand, on which there|
| | |Anchored by Linfox |Airport West for complete offering of retail |will be significant pressures in the |
| | |Ability to purpose build office, but also provides smaller office |Had trouble leasing suites to professional service firms, with |current economic climate. |
| | |suites for start-up professionals |main draw card being access to airport |Refurbishment of approx 4,300m2 |
| | |Has some professional service firms present | |building to be completed mid 2009. IMA |
| | |Single developer, wholesale approach to development | |pre-commited |
3 Principal Activity Centres – Office Characteristics
Coburg currently lacks the quantum or quality of space that would typically define a Principal Activity Centre (PAC). As a comparable northern-suburban PAC, Moonee Ponds provides over 4 times the amount of commercial space than Coburg, however, over half this space is occupied by the one tenant (the ATO). In order for Coburg to achieve the aims of Melbourne 2030, council and other stakeholders must plan appropriately for office usages, and diversify the economic offering of Central Coburg, which is currently focused almost entirely on retail, supplemented by small community based uses (eg. library).
While private developers will likely develop and build any new commercial space, council has a key role to play in the creation of a competitive commercial offer. The most important of these is ensuring that appropriate land is set aside for commercial development, unencumbered by retail or other uses. Another role of council is to lobby major office space users who can traditionally kick-start of commercial revival in a centre. A good example of this is the ATO and Foxtel moves to Moonee Ponds, which have ignited the Puckle Street area with office workers, and also created an alternative retail catchment for the surrounding cafes/supermarkets etc.
4 Commercial SWOT Analysis
While the current commercial offer is lacking, Coburg has a number of factors working in its favour.
Table 6.1.2 Commercial SWOT Analysis
source: Jones Lang LaSalle Strategic Consulting
|.Strengths |White collar workers increasing in number |
| |A high proportion of 25 – 34 yr olds (18.7%). Up and coming professionals |
| |Excellent train, tram and bus access |
| |Well located – only 8km from CBD |
| |Ease of access to CBD |
| |Close to Melbourne Airport |
| |Reputable and experienced developer on board (Equiset) |
| |Competitive rentals |
|Weaknesses |Very limited critical mass |
| |Poor reputation as an office market |
| |Vehicular access is difficult in some areas |
| |Retail offer is poor and not catered towards a corporate workforce |
| |Public realm is ageing |
|Opportunities |Available sites for development, which are well located next to the train station and retail offer |
| |Government support via Melbourne 2030 and Melbourne @ 5 million |
| |Included in the Monash Uni to Bell St employment corridor, one of 3 employment corridors to receive |
| |priority government attention |
| |Trend for corporate tenants to locate close to their workforce / seek alternatives to the CBD |
| |Can capture occupiers looking for purpose built space / a blank canvass |
|Threats |Nearby competing Activity Centres will be fierce competition for tenant requirements |
| |Retail offering is not enhanced apprpriately |
| |Too little land set aside for commercial office |
5 Commercial Floorspace
The quality of the office stock in Coburg is generally low, with only 2 modern buildings, and 2 to be developed, as noted in the table below.
Table 6.1.3 Primary Office Stock in Central Coburg
source: Jones Lang LaSalle Strategic Consulting
|Address |Approximate Area (m2) |Occupants/Details |
|Activity Centre Core | | |
|120 Bell Street |1,500m2 |Glencairn Consulting Suites |
|223 Sydney Road |1,000m2 |Financial Services Firm, Security Firm |
|240 Sydney Road |1,500m2 |Asking rental ($330/m2) seems very high |
|311 - 321 Sydney Road* |8,512m2 |Plans Approved, site for sale |
|Activity Centre Periphery | | |
|QM Commercial* |450 sq.m |(Plans Approved) |
* to be developed
6 Market Indicators
Rental levels in Central Coburg reflect the nature of the office space and size of tenancy, ranging from $100/m2 for older style shop-top office space to $310/m2 for new A-Grade space such as at QM Pentridge. Typical rents for the various styles of office space are listed below and are either expressed as a gross rent (g), which includes outgoings, or a net rent (n), which excludes outgoings. Most offices include car parking allocation as well.
As a comparison, shop-top offices in Moonee Ponds can be let for between $200 - $250/m2 through to $180 - $240/m2 for larger call centre style space.
Table 6.1.4. Coburg Commercial Rental Rates
source: .au, PIMs, Jones Lang LaSalle Strategic Consulting
|Type of development |Typical Size (m2) |Lower range ($/m2) |Upper range ($/m2) |Sales – Lower range |Sales – Upper range ($/m2)|
| | | | |($/m2) | |
|Shop-top |30 – 200 |$100 (n) |$215 |- |- |
|Stand alone |150 - 350 |$150 (n) |$220 (n) |$1,500 |$3,500 |
|Commercial suite |30 - 150 |$260 (n) |$310 (n) |$3,500 |$4,200 |
Much of the office space in Central Coburg is owned by a mix of owner occupiers and local investors with little institutional ownership apart from the supermarket premises. Yields are typically 7% - 9%, reflecting the secondary nature of the stock and the lease covenants.
According to local agents, there are few modern strata suites with professional services companies preferring to purchase small individual office buildings that command prices ranging between $1,500 and $3,500/m2 for a 150m2 renovated office terrace. Of the buildings owned by institutional investors, yields are in the order of 8.5% to 9% reflecting values of $2,000 to $2,500/m2.
New Supply
There does not appear to be a movement in trend of supply of new office space in Coburg with new developments occurring sporadically. There are currently no office developments under construction in the main activity core, however, there are offices being marketed in Pentridge Piazza (QM Commercial) and 321 Sydney Road has development plans approved for an 8,512m2 office building awaiting investor interest.
Demand
As Coburg is an immature office market, limited data has been collected in the way of historical take up levels of office space. However, the occupier profile suggests that demand in the Central Coburg area is principally derived from local businesses serving the needs of the surrounding residents and from government agencies, medical practitioners and Council divisions delivering services to the resident population.
Coburg has thus far not attracted any major office occupier to the area. One of the larger office occupiers, Glencairn Consulting at 130 Bell St, is a medical provider. While there will be a number of causes as to the small-size occupier profile, a lack of major developments will preclude any major occupiers being able to consider Coburg as a location option.
Conversations with local agents have indicated that demand for ground floor office space is still relatively strong, but that agents struggle to meet this demand with the current stock available to them. The demand for ground floor space indicates that these are the sorts of tenants who require good market visibility. A new corporate building with appropriate signage options would help to meet this demand.
Occupier Profile
The occupiers of office space in Central Coburg are generally small, local businesses serving the needs of the resident population, including financial advisors, solicitors, accountants and medical services providers. Other uses include banks and financial services, real estate agencies, community and welfare services, and language and coaching colleges. There does not appear to be any businesses serving a wider market.
7 Characteristics of the Melbourne suburban Office market
Suburban office space in Melbourne is typically developed as one of either two distinctive types, in-centre or out-of-centre development. In centre development is typically located in and around Activity Centres in the inner Melbourne Fringe, such as South Yarra, Richmond and is often smaller, more ‘boutique’ office space, often strata titled. Out-of-centre development is usually in the format of Business Park style development, where larger floorplates can be developed. In Melbourne, many Business Parks are located in the South East, especially the Monash precinct.
Table 6.1.5 describes some of the key locations, attributes, advantages and disadvantages of both in-centre and out-of-centre office developments.
Table 6.1.5 In-centre vs Out-of-Centre Suburban Office Development
source: Jones Lang LaSalle Strategic Consulting
| |In-Centre |Out-of-Centre |
|Locations |Richmond, South Yarra, Hawthorn, Box Hill, |Monash (Clayton, Mulgrave, Glen Waverley, Notting|
| |Dandenong, Collingwood |Hill), Port Melbourne, Burwood |
|Typical Building Type |Small to medium sized buildings (2,000m2 – |Large Business Parks. Multiple buildings. |
| |10,000m2). | |
|Transport Options |Tram and Train network access, limited parking |Abundant car parking, usually adjacent to a |
| | |freeway and with very limited public transport |
| | |access |
|Advantages |Access to well-educated workforce, public |Large floorplates can accommodate campus style |
| |transport, local amenity, CBD-based clients |development for large to very large corporate |
| |Accommodating for small to medium sized |occupiers |
| |businesses. |Lower economic rents (cheaper land) |
| | |Can accommodate ample car parking for |
| | |staff/clients/visitors |
|Disadvantages |Higher economic rents (value of land) |Poor public transport access, reliance on cars |
| |Limited opportunities for large to very large |Distance to major CBD market |
| |corporate occupancy requirements |Lack of amenity for staff |
| |Encroachment by competing uses (eg residential)| |
Demand by Sector
In determining demand by industry sector, take up has been utilised, rather than net absorption. This has been done because of inconsistencies between net absorption calculated by region compared to by sector. Net absorption is determined on a building by building basis however take up by sector can only be determined using tenant moves. Jones Lang LaSalle tracks all tenant moves over 1,000 sq.m.
Over the past 5 years, take up in the Finance and Insurance and Government sectors (both State and Federal) has dominated the CBD. Property and Business Services, as well as Communications services (including IT) and Retail Trade firms dominate take up in the Fringe.
Demand in the South-East differs in that Construction and Manufacturing demand dominates. This occurs for various reasons including the need to locate close to their operations, the need for significant amounts of carparking and to be close to the majority of their employees. Communications firms, many in the form of Call Centres, also take up a significant amount of space in the South East.
Table 6.1.6 Historical Take up by Sector (sq.m), 2004 – 2008
Source: Jones Lang LaSalle Strategic Consulting
|Industry |CBD |Fringe |South East Suburbs |Total |
|Accommodation, Cafes and Restaurants |0.1% |0.6% |0.0% |0.2% |
|Communication Services |8.3% |17.6% |13.2% |10.3% |
|Construction |0.8% |1.3% |9.1% |1.8% |
|Cultural and Recreational Services |0.4% |0.6% |0.8% |0.5% |
|Education |2.2% |2.1% |3.5% |2.3% |
|Electricity, Gas and Water Supply |3.3% |3.9% |5.2% |3.6% |
|Finance and Insurance |34.4% |9.8% |8.9% |27.7% |
|Government Administration and Defence |25.1% |7.7% |6.5% |20.4% |
|Health and Community Services |0.2% |4.2% |2.9% |1.2% |
|Manufacturing |0.8% |12.2% |16.2% |4.3% |
|Mining |1.0% |1.2% |0.0% |0.9% |
|Personal and Other Services |0.4% |0.6% |8.3% |1.3% |
|Property and Business Services |13.4% |18.0% |8.9% |13.6% |
|Retail Trade |0.5% |8.5% |7.5% |2.5% |
|Transport and Storage |5.0% |3.6% |2.9% |4.6% |
|Undisclosed |2.4% |2.2% |2.0% |2.3% |
|wholesale trade |1.6% |6.1% |4.1% |2.6% |
|Total |100.0% |100.0% |100.0% |100.0% |
Future Trends in Suburban Development
Of the total future office supply in Melbourne, approximately 46% is occurring in suburban centres. Of the suburban development, approximately 53% is being built in-centre.The major locations of this in-centre developments are South Yarra, Richmond, Cremorne, Abbotsford, Hawthorn, Hawthorn East, Kew, Preston and Moonee Ponds. The major suburban Business Park style locations are all of Monash (Notting Hill, Mulgrave, Glen Waverley, Clayton), Richmond/Burnley (Botannica), Essendon Airport and Bundoora.
Based on current trends in suburban office development, Jones Lang LaSalle have identified a number of factors that will influence where/how suburban office is developed;
• Land supply – no development can occur without appropriate supply of land, preferably in the form of greenfield or brownfield
• Availability of appropriate workforce – as workers are less inclined to travel long distances to access a suburban office, it is imperative that a development has good access to local workforce. In the case of office development, a high level of tertiary educated residents is preferable. This trend is evident in popular suburban areas such as Yarra, Boroondara and Monash. This issue is a key issue for outer suburban development, when the workforce tends to be more blue collar.
• Activity Centre Hierarchy – one of the fundamental kick starters of an office development/precinct is a major pre-commitment. In the case of outer suburban areas, this pre-commitment is generally sought from major government occupiers. Melbourne 2030 policy states the CADs sit at the top of the Activity Centre hierarchy, and are therefore more likely to attract this government pre-commitment. This will be attractive to potential developers, though has to be balanced with overall demand in the area.
• Land composition – one of the current disincentives of building in-centre office development is the prohibitive cost of developing in built up areas as opposed to clear, large land plots. This is true for all styles of development, including residential. The popularity of business park developments in Monash is testament to this, as well as the ever increasing outer suburban house/land developments on the residential side.
Larger sites also allow for economies of scale in terms of cost (keeping economic rents lower), can accommodate a large pre-commitment that can in some instances ‘bankroll’ the remainder of the development, and allow for greater control of the overall site by the developer. There are numerous examples of the major commercial developers favouring this style of development, including MAB at University Hill, Linfox/Becton at Essendon Fields, Lend Lease at Victoria Harbour, R Corp at Botannica and CGA Bryson at Unipark in Mulgrave.
• Access – never to be underestimated is good access to an office development site. All major office developments will have excellent access to a major freeway/road and/or public transport. In most instances, road access is deemed more advantageous, especially in outer suburban areas that are traditionally poorly serviced by public transport.
• Green Star and ABGR Rating – major corporate occupiers as well as all Government occupiers require a high Green Star and AGBR rating for any new leases signed, usually 4.5 Green Star and above. New office developments can provide the market with these highly rated buildings. Public transport access will also be of increasing importance, as credits can be gained to go towards Green Star ratings for accessibility to public transport.
Implications for Central Coburg
Central Coburg is in a unique position in that is a relatively ‘inner’ suburban market that has characteristics of out-of-centre office markets i.e. large development footprints and lower cost land than major in-centre office markets. Most Activity Centres have a land availability, as well as price, issue, which inhibits development of commercial office space, as well as medium density residential developments.
Coburg also has excellent public transport access via a train and tram line, and the importance of this will increase with the growing demand for high green-star and ABGR rated buildings.
Occupiers that could be attracted to Coburg include traditional fringe occupiers like IT firms, Advertising and Communications agencies and Retail and Wholesale Trade firms (Fashion/apparel/food and beverage).
2 Retail Market Characteristics
1 Competing Markets – Northern Metropolitan Area
The northern metropolitan Melbourne market is characterised by a mix of traditional main streets, which are a defining feature of Melbourne’s retail market, and large enclosed shopping centres. We have concentrated on the major retail centres within 7.5km of Central Coburg as well as smaller retail precincts within the more immediate catchment of Central Coburg that may compete directly. These are listed in Table 6.2.1.
Retail centres can be defined in a number of ways. When considering the retail function, it is customary to define the retail centres in terms of regional centres, sub-regional centres and neighbourhood centres. These are defined by Jones Lang LaSalle as follows:
• Regional Centres: Major centres that are department store based (Myer, David Jones). These centres often contain more than 200 specialty shops and several other major tenants.
• Sub-regional Centres: Centres that are discount department store based (eg K Mart, Target, Big W).
• Neighbourhood Centres: Enclosed centres containing a supermarket and specialties.
• Prime Strip Centres: Traditionally strong shopping strips which may extend for more than a kilometre.
From a planning policy perspective, it is customary to define centres as “Activity Centres” recognising the mix of activities that should locate in such centres rather than concentrating on just retail uses. Melbourne 2030, and the updated Melbourne @ 5 million policy, has identified 7 Central Activities Districts (CADS), 20 Principal Activity Centres (PAC) and 94 Major Activity Centres (MAC).
According to the Melbourne 2030 documentation, Principal Activity Centres have, or should have, the following characteristics:
• a mix of activities that generate high numbers of trips, including business, retail, services and entertainment;
• being generally well served by multiple public transport routes (many being on the rail network), and on the Principal Public Transport Network or capable of being linked to that network;
• a very large catchment covering several suburbs, and attracting activities that meet metropolitan needs; and
• the potential to grow and support intensive housing developments without conflicting with surrounding land uses.
MACs have similar characteristics but serve smaller catchments.
Within the wider catchment of Central Coburg, we have identified one CAD, five PACs, four MACs and four other centres that compete to varying degrees with Central Coburg. We have not included smaller local centres or more specialised centres (Lygon Street for example) in this analysis.
Principal Activity Centres
Northland Shopping Centre is 6km east of Central Coburg and provides high order regional shopping facilities in an enclosed centre. Its catchment is extensive and encompasses the majority of Central Coburg’s catchment. The centre is anchored by a Myer department store, the closest such department store to Central Coburg, as well as two full line supermarkets and a Kmart. Northland is a solid performing centre with annual turnover in excess of $400 million.
Highpoint Shopping Centre is the only regional centre in the western suburbs and contains more than 100,000sqm of retail floorspace including Myer, Target, Big W and Safeway as well a Hoyts Cinemas. It is one of Australia’s largest centres and has annual turnover in excess of $700million. It is 7.5km south west of Coburg and is considered to be more difficult to access than Northland for residents within the Coburg catchment. We consider that Northland is likely to attract more customers from the Coburg catchment for comparison and higher order shopping, despite the very strong retail mix at Highpoint.
Of the other PACs near Coburg, High Street Preston is closest, being 3.5km to the east. Preston is anchored by the Preston Market, the largest market in Melbourne outside of Queen Victoria Markets, as well as Safeway and Aldi supermarkets. The retail offer is not as comprehensive as Coburg and is dominated by food catering, services and convenience retailing. As with Coburg, the multi-cultural offering of the retail is apparent. The market site is owned by Salta Properties and has previously been the subject of a major redevelopment proposal, including both retail and residential development. Currently, the market is quite run down. Should it be redeveloped, Preston will pose much stronger competition to Coburg than it currently does. The City of Darebin has also developed the Preston Civic Precinct Masterplan 2006, which will complement development at Preston Markets redevelopment, provide commercial office and residential opportunities and consolidate community facilities around the Civic precinct.
Moonee Ponds is only 4.5km south west of Central Coburg but caters to a very different catchment demographic to Coburg. It has a much stronger fashion offering and has developed somewhat of a “café culture” serving the growing affluence within the inner north western market. Moonee Ponds Central is undergoing a major redevelopment, which will add a Kmart store to the retail mix, the first discount department store in Moonee Ponds. Moonee Ponds has successfully married traditional main street retailing (along Puckle Street) with modern large format and enclosed centre retailing (Safeway, Coles).
Westfield Airport West and Broadmeadows Town Centre (CAD) are both large sub-regional centres, bordering on regional status but without a full-line department store (Airport West has a Discount Department Store (DDS) in K-Mart). They are a considerable distance from Central Coburg, although both provide strong competition for residents in the north-western part of the Coburg catchment. These centres effectively limit the existing and future reach of Central Coburg.
Major Activity Centres
Brunswick is considered the major direct competition to Central Coburg, with its retail core being 3.5km from Coburg’s retail core. Both precincts are centred along Sydney Road, which carries considerable traffic and is characterised by older retail stock with relatively fragmented ownership and small lot sizes. The Brunswick precinct is anchored by Barkly Square, a sub-regional shopping centre comprising Kmart, Coles, Safeway and over 40 specialty stores with annual turnover of over $100million.
Northcote Plaza provides a similar retail offer to Barkly Square although it is not supported by an extensive main street offer.
Plenty Road Reservoir is located approximately 6km from Central Coburg and provides modern convenience shopping facilities anchored by two supermarkets and a DDS. Its offer is quite different to the offer at Coburg, however its ease of access is likely to be a drawcard for residents in the north eastern sector of the Coburg catchment.
Glenroy provides a main street retail offer anchored by a Coles supermarket. It is less extensive than Coburg and more compact. Glenroy, which is 6km from Coburg, is not considered to be as much of a competitive threat to Coburg as nearby Brunswick. The trade area of Glenroy overlaps mainly with the north-west portion of Coburg’s secondary trade area.
Other Centres
Of the other retail precincts within close proximity to Coburg, Campbellfield Plaza is the greatest direct competitor, being a solid performing sub-regional level centre with a large Kmart, Coles, Officeworks and over 20 specialty stores. The centre has annual turnover in excess of $85 million per annum and would attract customers from the northern portions of Coburg’s primary and secondary trade areas. Officeworks provides a point of difference for Campbellfield Plaza and attracts customers from a relatively wide catchment. Its strengths are its location, convenience and ease of access, being on the corner of Hume Highway and Mahoneys Road.
Essendon Airport is also an emerging competitive retail centre, being home to both a large DFO outlet centre (at the south eastern end of the airport on Bulla Road) and a Coles supermarket in the central western end of the airport (English Street). The DFO Centre is the only one of its kind in the north western suburbs of Melbourne, and as such is a ‘destination’ shopping centre.
Figure 6.2.1: Central Coburg – Location and Competing Activity Centres
Source: Melbourne 2030, Jones Lang LaSalle, MapInfo
[pic]
Table 6.2.1: Central Coburg Competing Retail Centres and Precincts
Source: Jones Lang LaSalle Strategic Consulting
|Centre Type (2030) |Format |Retail GLA (sqm.) |Distance From Coburg |Selected major retailers / streets |
| | | |(km) | |
|Principal Activity Centres | | | | |
|Northland S.C. |Regional |69,985 |6.0km E |Myer, Coles, Safeway, Kmart, Toys R Us |
|Highpoint |Regional |104,136 |7.5km SW |Myer, Target, Big W, Safeway, Toys R Us, |
| | | | |Harris Scarfe |
|Westfield Airport West |Sub-regional |49,733 |7.5km NW |Target, Kmart, Coles, Safeway, Bi-Lo, Aldi, |
| | | | |Harris Scarfe |
|Broadmeadows T.C. |Sub-regional |48,929 |8.5km NW |Target, Big W, Safeway, Coles |
|High Street, Preston |Main Street |n.a. |3.5km E |High St, Murray Rd (Safeway) |
| - Preston Market |Market |6,476 | |Preston Markets (Aldi), |
|Moonee Ponds |Main Street |n.a. |4.5km SW |Puckle Street, Safeway |
| - Moonee Ponds Central |Neighbourhood |6,260 | |Coles |
|- Extension (U.C.) |Sub-regional |12,934 | |Kmart, First Choice |
|Major Activity Centres | | | | |
|Brunswick |Main Street |n.a. |3.5km S |Sydney Road - Aldi, Mediterranean Supermarket|
| - Barkly Square |Sub-regional |16,977 | |Kmart, Coles, Safeway |
|Northcote | |23,781 |4.0km SE | |
| - Northcote Plaza |Sub-regional |19,067 | |Kmart, Coles |
| - Northcote Central | |4,714 | |The Warehouse |
|Plenty Road, Reservoir |MAC |16,000 |6.0km NE | |
| - Summerhill Village |Neighbourhood |5,000 | |Safeway |
| - Target/Coles | |10,800 | |Target, Coles |
|Glenroy |MAC |28,087 |6.0km NW |Coles |
|Other | | | | |
|Preston South S.C. |Neighbourhood |4,691 |3.5km E |Safeway |
|Union Sq., Brunswick West |Neighbourhood |n.a. |3.5km S |Coles |
|Campbellfield Plaza |Sub-regional |18,116 |6.0km N |Kmart, Coles |
|West Street, Hadfield |Main Street |n.a. |4.0km N |Safeway |
|DFO, Essendon Airport (Strathmore) |Outlet Centre |25,000 |6.0km W |Over 100 brands |
2 Central Coburg – Retail Overview
The Coburg Principal Activity Centre is defined as per Figure 6.2.2. The Centre comprises 10 precincts, three of which are classified as the core retail area (P2, P3 and P6). Precincts 2 (supermarkets/car park) and Precinct 3 (Sydney Road retail) are located south of Bell Street and between the railway line and Russell Street, including that portion of Sydney Road between Munro Street and Bell Street.
Figure 6.2.2: Coburg Principal Activity Centre - Precincts
Source: Central Coburg 2020 Structure Plan
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Precinct 6 (Sydney Road/ Bell Street commercial) fronts Bell Street and Sydney Road to the north and is somewhat on the periphery of the rest of the core retail precinct. It has limited opportunities for major retailing due to the relatively narrow depth of blocks fronting the main streets. Precinct 9 covers the Pentridge redevelopment, and will provide a mixed-use development function.
We consider that the existing Precincts 2 and 3 should be the retail core.
Coburg is one of 26 designated Principal Activity Centres (PACs) and Central Activities Districts (CADs) in Metropolitan Melbourne. Compared to the majority of other PACs, it has a relatively poor retail mix, providing primarily convenience shopping needs rather than a broad range of comparison shopping options that would be expected of a PAC. It is noted that PACs are not overly specific in terms of the level of retail development that is expected however it is reasonable to assume that they should support the highest concentration of retail activity (as well as other land uses) outside of the Central Activities District (CAD).
The key characteristics of a PAC are as follows (Source: Melbourne 2030):
• A mix of activities that generate high numbers of trips, including business, retail, services and entertainment
• Being generally well served by multiple public transport routes (some being on the rail network), and on the PPTN or capable of being linked to that network
• A large catchment covering several suburbs, and attracting activities that meet metropolitan needs
• Having potential to grow and support intensive housing developments without conflicting with surrounding land uses
Analysis of the 26 PAC/CADs reveals the following.
• Many of the PAC/CADs in Melbourne have in excess of 100,000sqm of retail floor area.
• 11 of the 26 PAC/CADs are anchored by either a Myer or David Jones department store.
• All but three are anchored by a major discount department store (either Target, Big W or Kmart). The three that aren’t are Coburg, Preston (High Street) and Prahran/South Yarra.
• 19 of the 26 PAC/CADs include multi screen cinema complexes. Coburg does not include cinemas.
• 20 of the 26 PAC/CADs are anchored by a large enclosed shopping centre of at least 20,000sqm gross lettable retail area.
• Most PAC/CADs combine both a large enclosed centre as well as traditional main street retailing
The PAC/CADs are identified in Table 6.2.2.
With less than an estimated 50,000sqm of retail floor space, Coburg is one of the smallest Principal Activity Centres in Melbourne. Furthermore, much of the existing floor area is considered secondary in nature with few national brands represented. It is one of the few centres that isn’t supported by a significant modern enclosed centre and has few significant major tenants beyond supermarkets.
Interestingly, Preston, High Street is probably the weakest existing PAC in metropolitan Melbourne and is the PAC that is closest to Coburg, which is also considered one of the weaker PACs in metropolitan Melbourne.
Table 6.2.2: Melbourne 2030: Principal Activity Centres & Central Activities Districts - Comparison
Source: Jones Lang LaSalle Strategic Consulting, Melbourne 2030, SCCA Shopping Centre Directory
|Principal Activity Centres / Central |Retail GLA (Major |DJ |Myer |BW |
|Activities Districts |Centre) | | | |
|Food Specialties | | | | |
|Fresh Food |37 |15.2% |12.8 |6.2% |
|Food Catering |50 |20.5% |35.7 |17.2% |
|Total Food Specialties |87 |35.7% |48.5 |23.4% |
|Non-Food Specialties | | | | |
|Apparel |48 |19.7% |69.9 |33.7% |
|Jewellery |8 |3.3% |11.7 |5.6% |
|Leisure |11 |4.5% |12.3 |5.9% |
|General Retail |23 |9.4% |19.2 |9.2% |
|Homewares |20 |8.2% |10.8 |5.2% |
|Mobile Phones |2 |0.8% |10.5 |5.1% |
|Total Non Food Specialties |112 |45.9% |134.4 |64.7% |
|Retail Services |45 |18.4% |24.8 |11.9% |
|Other Retail (nec) |16 |n.a. |n.a. | |
|Total Specialties - Retail |260 | |207.7 | |
Note: Other retail has been excluded from percentage calculations. It includes uses that comprise a mix of retail and non retail functions
Key characteristics of Coburg’s retail mix are highlighted below:
• In terms of sheer number of stores, food specialties are well represented, which is quite common of main street environments that attract a relatively high proportion of cafes, restaurants and take-away food outlets. The multi-cultural catchment is also catered for with specialty food outlets catering for various cultures. The quality of cafes and restaurants, however, is considered quite poor, with many of the premises appearing rundown and likely to be marginal businesses.
• With the exception of homewares and general retail (eg. Pharmacies, discount variety), the range of non-food specialties is poor.
• While there were 48 apparel stores counted, there were few well known brands.
• Mobile phone outlets were also under-represented.
• Homewares retailing is relatively strong, with Sydney Road attracting showrooms selling a variety of household goods. This market sector has tended to relocate out of large activity centres towards specialist homemaker precincts. The Coburg catchment is served by the nearby Lincoln Mills Homemaker Centre as well as Northlands Homemaker Centre, Preston.
Overall, Coburg serves predominantly a convenience shopping function despite its relatively high number of retail outlets. Its strong associations with the Turkish and Islamic communities also have attracted a number of retailers that cater to this market. Many of the existing retail outlets are of poor quality with turnover likely to be well below benchmark levels, particularly when compared to leading regional and sub-regional centres.
3 Retail Vacancy and Performance
Based on field work undertaken in November 2008 of “shop front” land uses in the Coburg PAC, there is currently an estimated vacancy rate of 10.3%. This is a relatively high percentage of vacancies, however the majority of vacant space is outside the core precinct fronting Sydney Road. We consider this reflects both the poor quality of existing retail stock and lack of depth in anchor tenants located within the retail precinct rather than an over-supply of retail space. There is certainly an over-supply of what we would consider to be secondary retail space but an under-supply of prime quality retail space.
The performance of retailers at Central Coburg is likely to be well below what is typically achieved in enclosed regional and sub-regional centres, however the main Sydney Road frontage between Bell Street and Munro Street/Harding Street appears reasonably strong.
Local real estate agents report solid interest from retailers for locations within this core precinct, predominantly from independent retailers. However, the lack of major national retailers expressing interest in Coburg is an indication that it is not currently on the radar for these retailers’ expansion plans, due to perceived under-performance of the precinct and more suitable locations elsewhere in Northern Melbourne.
4 Retail Rents
Rent levels reflect the lower turnover achieved by the majority of retailers in Coburg compared to prime Melbourne retail strips, sub-regional and regional centres. Good tenancies in the core precinct with Sydney Road frontage have recently achieved rents in the vicinity of $420-$450 per sqm net.
Rent levels quickly decline for areas outside the core precinct and without the benefit of a Sydney Road frontage. For example, a property fronting Bell Street is currently being marketed for $260 per sqm per annum.
By way of comparison, Jones Lang LaSalle monitors regional centre and sub-regional centre rents in the Melbourne metropolitan market. Average net rents for these markets vary considerably, but as at September 2008, the following net rents were reported:
Regional Centres: $1,368 per sqm net (estimated range $900 - $2,200)
Sub-regional Centres: $745 per sqm net (estimated range $600 – $1,200)
While businesses are finding the current market conditions challenging, rentals are holding firm, however limited growth in rents has been achieved over the past two to three years.
The lower rental structure encourages “start-up” businesses, which provide opportunities for new, innovative retailers to establish. Such businesses are important in creating a point of difference in a retail market. What is missing, however, is quality specialty retail space, with strong nearby anchors to encourage well known specialty retailers to Coburg, thereby increasing overall appeal and pedestrian traffic.
5 Retail SWOT Analysis
Coburg presents a range of opportunities to capitalize on, given its status as a PAC and location at the juncture of two major roads. However, there are a number of potential threats that need to be addressed in order for Coburg to fullfil its potential.
Table 6.2.4 Retail SWOT Analysis
source: Jones Lang LaSalle Strategic Consulting
|.Strengths |Emerging affluence of the catchment |
| |Solid population growth, particularly in Pentridge precincts |
| |Excellent train, tram and bus access |
| |Central, strategic location at junction of Bell Street and Sydney Road |
| |Relatively strong food retail offer, anchored by Coles and Safeway |
| |Mix of community and civic facilities complementing retail offer |
| |Plentiful parking |
|Weaknesses |Non-food offer and lack of strong performing non-food anchor |
| |Vehicular access is difficult in some areas |
| |Overall retail offer is poor |
| |Public realm is ageing |
|Opportunities |Capitalise on the growing affluence |
| |Available sites for major development, particularly on western side of Sydney Road |
| |Government support via Melbourne 2030 & The Coburg Initiative |
| |Identification as a Principal Activity Centre – provides a platform on which to build |
| |True multi-use centre – civic, community, leisure, educational uses |
| |Capitalise on commuters using tram, bus and rail services (the time poor customer) |
| |Pentridge – spin off from affluent residents within the catchment |
|Threats |Preston (designated PAC) may provide direct competition |
| |Future development of Broadmeadows as CAD |
| |Passive owners with limited interest in adding value to their assets – particularly Sydney Road frontages |
| |Strong competition from nearby centres anchored by DDS and supermarkets |
| |Nationally recognised retailers may be attracted to competing centres |
| |Pentridge – Possible threat if developments do not embrace being part of the Coburg PAC and complement the|
| |retail core. |
| |Raising customer expectations but failing to deliver |
6 Trade Area Analysis
For the purpose of analysing the customers to Central Coburg, notional primary and secondary trade areas for Coburg have been identified having regard to the following:
• Coburg’s designation as one of 20 Principal Activity Centres in Metropolitan Melbourne
• Geographical barriers such as major freeways, rivers etc.
• Competitive centres, their size, retail offer etc.
• Existing retail offer at Coburg
• Likely future retail offer, based on its status as a Principal Activity Centre.
It is noted that defining a trade area in not an exact science. Trade areas invariably overlap and do not account for all the trade undertaken within a centre. There will always be trade that comes from beyond the defined trade area – often around 15% of total trade. The primary trade area will typically account for at least 50% of the total trade while the secondary trade area, which is often more extensive, will achieve 25-40% of total trade, with 10-15% of trade from beyond the identified catchment.
The primary and secondary trade areas are depicted on Figure 6.2.3, together with the main competitive centres. The trade areas cover parts of the local government areas of Moreland and Darebin, with the vast majority of the trade area falling within the City of Moreland. They tend to extend further in a northerly direction, with trade to the east constrained by Northland S.C. and to the west by Highpoint S.C. and Citylink. To the south, Brunswick is a strong competitor for convenience shopping.
The trade areas identified reflects the catchment that Coburg should at the very least aspire to exert an influence over. Our field work, observations and assessment of previous research suggests a relatively weak market share is currently being captured and the current catchment area for Central Coburg is probably even more constrained.
Over time, we consider Coburg has the potential to improve turnover levels by a combination of the following:
• Increasing its catchment area
• Increasing market shares in both the Primary and Secondary Trade Areas
• Increasing expenditure from beyond the catchment due to the destinational appeal of aspects of the centre.
For the purposes of analysis, we have compared the Primary Trade Area (PTA) and Secondary Trade Area (STA) to metropolitan Melbourne, utilising data from the 2006 ABS Census of Population and Housing – Usual Residents Profiles. It should be noted that this tends to under count the resident population. The analysis is based on a population of 52,275 people in the PTA and 92,190 people in the STA (Main Trade Area 144,465 usual residents). The Estimated Resident Population is 150,568 residents (some 4% higher).
Figure 6.2.3: Retail Catchment and Competitive Centres: Coburg PAC
Source: Jones Lang LaSalle Strategic Consulting, MapInfo
[pic]
Table 6.2.5: Demographic Profile- Selected Medians: Moreland and Central Coburg MTA, 2006
Source: ABS Census 2006, Jones Lang LaSalle
[pic]
Age and Sex
• Both Moreland and the MTA are well represented in the 25 to 34 age group but poorly represented in the 5-19 age groups. Over time the proportion of children is likely to rise, given the large number of residents in the family formation age bracket.
• Moreland and the MTA also have a high representation of older residents aged 65 and over. Lower representation in the 45-64 age groups may see this age group reduce in relation to metropolitan Melbourne over the next 10-15 years.
Table 6.2.6: Demographic Profile- Age and Sex: Moreland and Central Coburg MTA, 2006
Source: ABS Census 2006, Jones Lang LaSalle
[pic]
Birthplace
• Moreland and the MTA have an above average proportion of overseas born residents, with particularly strong Greek and Italian communities. The Lebanese and Turkish communities are also very strong. This mix of cultures is evident in the retail facilities and services provided in Central Coburg.
• Conversely, a relatively small proportion of the population was born in the UK.
Table 6.2.7: Demographic Profile- Birthplace: Moreland and Central Coburg MTA, 2006
Source: ABS Census 2006, Jones Lang LaSalle
[pic]
Income
• Both individual and household incomes are below the metropolitan average.
• Individuals earning $1,000 or more make up only 17.5% of Moreland’s labour force compared to 18.1% for the MTA and 20.7% for metropolitan Melbourne.
• Median Household Incomes are 12% below that of metropolitan Melbourne.
The distribution of high income households across the Moreland LGA is illustrated in Figure 5.3.4.
Table 6.2.8: Demographic Profile - Income: Moreland and Central Coburg MTA, 2006
Source: ABS Census 2006, Jones Lang LaSalle
[pic]
Housing
• Slightly higher than average medium density housing forms are present in both Moreland and the MTA.
• Single person households are more highly represented, as are two person households.
• The prevalence of smaller households results in a slightly lower average household size of 2.4 persons per dwelling compared to the metropolitan average of 2.6 persons per dwelling.
• The MTA has both a higher proportion of fully owned housing stock as well as rental accommodation. This is a sign of a relatively large proportion of long term residents who have managed to pay off their mortgage.
• Interestingly, the average mortgage repayment is higher than the average for metropolitan Melbourne, despite lower incomes suggesting less capacity to pay. This may reflect both the large proportion of couples with no children and the beginnings of a gentrification process with younger, more affluent residents moving into the catchment.
Table 6.2.9: Demographic Profile- Housing: Moreland and Central Coburg MTA, 2006
Source: ABS Census 2006, Jones Lang LaSalle
[pic]
Occupation
• Moreland and MTA have a relatively high proportion of professionals, which is usually associated with above average income levels. This, however, is not the case.
• “Blue collar” occupations are less well represented than the metropolitan Melbourne average.
• This points to a changing demographic, with young professionals moving into the trade area in the early stages of their career. It therefore points to growing affluence over time
Table 6.2.10: Demographic Profile- Occupation: Moreland and Central Coburg MTA, 2006
Source: ABS Census 2006, Jones Lang LaSalle
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Method of Travel to Work
• Moreland and MTA have a slightly higher proportion of the population using public transport for the journey to work. However, it is still relatively low.
• A very high proportion of the population use bicycles in the journey to work (3.7% in Moreland and 4.2% in the MTA).
Table 6.2.11: Demographic Profile- Method of Travel to Work: Moreland and Central Coburg MTA, 2006
Source: ABS Census 2006, Jones Lang LaSalle
[pic]
Changing Demographics over Time
Table 6.2.12 provides insight into the changing demographic that is occurring in the City of Moreland in a relatively short period of time. Between 1996 and 2006, the proportion of professionals in the City has grown substantially from being below the metropolitan average to considerably above the metropolitan average.
Furthermore, the gap in income levels is reducing, pointing to an increasingly more affluent demographic.
The City is also becoming more expensive in terms of median rent levels as well as housing loan repayments.
Table 6.2.12: Demographic Trends: Moreland LGA, 1996 - 2006
Source: ABS Census 2006, Jones Lang LaSalle
[pic]
Summary
The above analysis highlights that Central Coburg is changing and should these trends continue, the residents within the catchment are likely to demand a very different retail offer in 20 years time than both what Coburg currently offers and what the existing residents currently want.
This presents challenges for Coburg. With areas undergoing such change there is likely to be considerable differences between the wants and needs of long-term residents within the catchment and more recent residents, who are more likely to reflect the emerging affluence that is apparent.
The emerging wealth across the City of Moreland is illustrated in Figure 6.2.4, which shows not only greater wealth in those areas closest to the Melbourne CBD but high income areas in recent subdivisions such as Pentridge Piazza and Pentridge Village. These areas are in very close proximity to the core retail area of Central Coburg. However, it is unlikely that Central Coburg currently meets the needs of such residents.
Figure 6.2.4: Distribution of High Income Households, City of Moreland 2006
Source: Australian Bureau of Statistics
Supportable Floorspace
1 Commercial
In considering future potential commercial floor space, we have analysed two sets of outcome – a low case scenario based on the status quo (i.e. no investment or directives aimed at improving the commercial office market) and a high case scenario based on a number of initiatives, investments and assumptions. The assumptions will be discussed in detail below and investment and initiatives further in the report as part of the Facilitation Strategy.
Our demand forecast models are based on Journey to Work (JTW), Census 2006, data. Demand has initially been forecast for the Moreland LGA, with 80% of this demand forecast for Coburg. This is based on the current workforce makeup of the three SLAs that make up Moreland LGA. As Coburg is a Principal Activity Centre, we expect these Moreland office workforce proportions to remain relatively stable, in the low case.
Utilising Journey to Work data (Census 2006), it is estimated that there is approximately 17,000m2 of office space in Coburg, as well as approximately 10,000m2 of office space used by the government workforce. This space predominately comprises the Moreland City Council Chambers, located at Bell St, Coburg.
As is discussed in earlier chapters, office space in Coburg predominately comprises shop-top and very low grade office space which is only suitable for the locally based finance and insurance, property and business services sectors (eg. small 1-2 person law firms, local accountants and financial planners etc.).
1 Low Case
A low case scenario assumes office based employment in Central Coburg grows in line with population growth. We also analyse this scenario based on the current Coburg workforce makeup, that is, we assume that the proportions of workers from various LGAs around Melbourne stays consistent.
2 High Case
One of the principal aims of The Coburg Initiative is to create a viable and functioning location for office-based employment. Currently, the quality of current office stock, the lack of available sites for new-build office stock, as well as the lack of appropriate retail facilities for workers, means that it is unlikely that any significant office based occupier will locate in Central Coburg.
Our high case scenario seeks to analyse potential demand, based on the assumptions listed below being achieved. The final section of this report – Facilitation Strategy – will suggest strategies that can be implemented in order to make the high case scenario a reality.
Assumptions
Quantitative
• Increased proportion of Moreland office workforce working locally.
Currently, only 4.38% of Moreland office workers, that is, those employed in the finance, insurance, property or business services (FIPB) sectors, actually work in Moreland. Approximately 8% of the Moreland LGA workforce work in the FIPB sector. And a mere 0.35% of the population of Moreland work in the FIPB sector in Moreland.
It is likely that any future major increase in employment will predominately rely on a local workforce, or those suburbs/areas which can easily access Coburg and are further away from CBD (i.e. Hume). Moreland is also deemed to have much potential to grow their FIPB workforce. Table 7.1.1. below shows FIPB employment vs degree educated residents, using a variety of comparable regions. The data suggests that while Moreland has a relatively well educated workforce, the workforce has a low propensity to work in the white collar FIPB sector. This is an opportunity for Coburg and the wider Moreland region, that we have captured in our high case model.
Table 7.1.1. Moreland FIPB employment vs qualification
Source: ABS, Jones Lang LaSalle Strategic Consulting
| |FIPB employment* |Residents Aged over 15 with a degree or higher |
|Moreland LGA |8.0% |40.7% |
|Inner Melbourne SSD |19.8% |52.9% |
|Boroondara City SSD |26.9% |58.5% |
|Melbourne SD |17.8% |36.2% |
Note: FIPB refers to the Finance, Insurance, Property and Business services industry sectors
* as a percentage of employed persons aged 15 years and over
• Major pre-commitment
A key driver of new office precincts is a substantial pre-commitment by a new tenant. There a number of reasons for this, from the psychological to the financial. On the financial side, very few developers will risk building a new office product on a speculative basis – and very few would receive finance to do such a thing. Psychologically, a pre-commitment and the accompanying PR received, boosts the perception of the area in the eyes of other prospective tenants.
A pre-commitment also gives the developer an opportunity to anchor a larger building with the secured tenant, and adding extra floors/areas for marketing to other potential tenants. In this way, Coburg could secure itself larger, more sophisticated buildings.
Our model assumes a pre-committed building entering the market around 2013, and another in 2018.
• Increase in proportion of office workers from Hume.
Compared to Moreland LGA, Hume LGA has a low proportion of Upper White Collar workers, 20.7% to 37.5%, and a much higher proportion of Lower White Collar workers, 53.2% to 35.3%, although many of these Lower White Collar workers are in the technicians and Trade workers field. We would expect that as some of these lower white collar workers move to more professional fields, that a small proportion of these will be attracted to Coburg, as an ‘inner’ suburb that is relatively easily accessible. While Broadmeadows as a designated CAD will develop its own office-based employment in the medium term, this is expected to be more government oriented and less ‘corporate’ than what Coburg is expected to achieve.
Our model therefore assumes a slight increase in office-based employment from the Hume workforce in the medium term.
• Higher proportion of Moreland workers working in Coburg SLA.
This is currently 80%, but as the office market improves and more appealing jobs are created, we expect this very localised demand from the other SLAs (Brunswick and North), to increase.
Qualitative
• Retail offering has to improve before any consideration will be made by occupiers to locate in Coburg.
• Sites need to be made available for appropriately scaled development. eg. sites around station, Pentridge. This will be refined further in the spatial analysis section.
The high case scenario would mean that by 2026, the Coburg office market would be roughly similar in size to the Moonee Ponds office market, minus the 22,000m2 ATO building (Mooonee Ponds currently has approximately 40,000m2 of office space, of which 22,000m2 comprises the ATO building). We see it as unlikely that Coburg will be able to attract a government building of the scale of the Moonee Ponds ATO building, as the Activity Centre hierarchy indicates that a government building of that size in the north would likely be built in Broadmeadows.
Table 7.1.2. Low and High Case Office demand projections – Coburg
source: Jones Lang LaSalle Strategic Consulting
| |2009 - 2015 |2016 - 2021 |
| |additional |additional space |additional |additional space |
| |workforce | |workforce | |
|Low Case | 100 | 1,501 | 84 | 1,265 |
|High Case | 516 | 7,736 | 546 | 8,184 |
High case projections for office space total 15,920m2 of additional space required to 2021, as compared to a low case scenario of 2,766m2. This is a significant difference in the quantum of office space required, and the difference represents what can be achieved with forward planning of office site locations and, importantly, the attraction of large, pre-committed tenants to the area.
We also note that these projections are for additional office space required. Considering that the current stock of almost 17,000m2 of office space is of a very low grade, we anticipate that much of this stock will need replacing and upgrading with modern office space. Therefore, we recommend that land is set aside for up to 30,000m2 of new office space to 2021.
2 Retail
The Central Coburg Structure Plan 2020 has a key objective to increase the retail floor space by approximately 25,000sqm and improve the quality of existing supply. In considering what floor space is supportable, we have considered the total retail spend within the trade area, required turnover levels to ensure retail space is commercially viable, the mix of retail floor space and target market share of total retail spend, having regard to competition and Central Coburg’s emerging role as a Principal Activity Centre. We have also allowed for growth in affluence and therefore retail spending potential within the trade area over the forecast period.
The estimated resident population of the Main Trade Area (MTA) as at 2006 was 150,568 residents. This is expected to increase by an average of 0.8% per annum between 2006 and 2011 and continue to rise by a similar rate throughout the forecast period. By 2021, the population of the MTA is expected to reach 169,383 people.
Table 7.2.1 Trade Area Population Growth
source: Jones Lang LaSalle Strategic Consulting
|Population |2006 |2011 |2016 |2021 |
|Primary Trade Area |54,484 |56,763 |58,861 |61,423 |
|Secondary Trade Area |96,085 |100,031 |103,665 |107,960 |
|Main Trade Area |150,568 |156,793 |162,526 |169,383 |
|% growth per annum | |2006-2011 |2011-2016 |2016-2021 |
|Primary Trade Area | |0.8% |0.7% |0.9% |
|Secondary Trade Area | |0.8% |0.7% |0.8% |
|Main Trade Area | |0.8% |0.7% |0.8% |
The spending capacity of residents in the trade area as at the 2006 Census was estimated at around 10% below the metropolitan average. However, assuming the recent trend of increased affluence across the trade area continues, this difference should diminish.
A combination of increased affluence within the trade area, increased retail spending per capita generally across Melbourne and increased population should see total retail spending increase by between 2.6% and 3.1% per annum over the forecast period in real terms (after inflation is taken into account).
Table 7.2.2 Trade Area Spending Growth
source: Jones Lang LaSalle Strategic Consulting
| |2006 |2011 |2016 |2021 |
|Total Trade Area Spending ($million) |
|Primary Trade Area |498 |565 |660 |762 |
|Secondary Trade Area |878 |996 |1,163 |1,339 |
|Main Trade Area |1,376 |1,561 |1,823 |2,101 |
|% growth per annum | |2006-2011 |2011-2016 |2016-2021 |
|Primary Trade Area | |2.6% |3.2% |2.9% |
|Secondary Trade Area | |2.5% |3.1% |2.9% |
|Main Trade Area | |2.6% |3.1% |2.9% |
Central Coburg PAC should support approximately $209.4 million as at 2008. This level of spending reflects 12.5% capture of total retail spending across the MTA. As would be expected, the majority of the spending is assumed to come from the PTA. This market share is considered reasonable for an emerging Principal Activity Centre.
The relatively low market share assumed in the STA reflects the strong competition in each direction from Coburg, with centres such as Campbellfield and Broadmeadows to the north, Northland Shopping Centre to the east, Brunswick and the CBD to the south and Highpoint and Moonee Ponds to the west all competing for the retail dollar of residents in the catchment of Central Coburg. Raising this market share should be a priority. To achieve this will require a vastly improved mix of major anchor retailers to create real destination appeal as well as clusters of complementary specialty retailers to attract a wider audience and raise Coburg’s profile.
Table 7.2.3 Total Retail Market Share
source: Jones Lang LaSalle Strategic Consulting
|Total Retail Spending |
| |2008 |2011 |2016 |2021 |
|PTA ($million) | 529.0 | 565.1 | 660.1 | 761.8 |
|STA ($million) | 932.6 | 996.3 | 1,163.7 | 1,343.0 |
|MTA ($million) | 1,461.6 | 1,561.4 | 1,823.9 | 2,104.8 |
|Central Coburg Turnover |
|PTA ($million) | 128.9 | 137.7 | 160.8 | 185.6 |
|STA ($million) | 54.4 | 58.1 | 67.8 | 78.3 |
|Beyond Trade Area | 26.2 | 27.9 | 32.6 | 37.7 |
|Total | 209.4 | 223.7 | 261.3 | 301.6 |
|Market Share | | | | |
|PTA |24.4% |24.4% |24.4% |24.4% |
|STA |5.8% |5.8% |5.8% |5.8% |
|MTA |12.5% |12.5% |12.5% |12.5% |
|Beyond |12.5% |12.5% |12.5% |12.5% |
Our analysis has assumed that some form of department store retailing is attracted to Coburg, most likely a discount department store. Big W, for example is not represented within the catchment. The analysis suggests a DDS of 6,800sqm is supportable now. It is noted that there is no DDS within the PTA and only one DDS within the MTA (Kmart at Barkly Square, Brunswick). Centres further afield currently provide this retail category to catchment residents.
We consider that supermarket retailing will continue to be the major component of the Central Coburg PAC. The equivalent of three supermarkets should be supportable now with total floor area supportable for supermarket and grocery store retailing increasing over time from 8,900sqm to 12,700sqm. This may comprise a mix of full-line supermarkets, smaller grocery stores (such as an Aldi supermarket) and grocery stores catering for the various ethnic groups within the catchment.
We do not consider having two Coles supermarkets at Central Coburg is sustainable in the long term, with one of the supermarkets likely to close.
In terms of total supportable floor area, the analysis suggests this will increase by 17,500sqm by 2021. It is noted, however, that the supportable floor area as at 2008 is approximately in line with the existing amount of retail floor space. This does not suggest that further retail development is not warranted. We consider that much of the existing space is secondary and does not achieve economic turnover levels because it isn’t the type of retail space traders want or isn’t in the right location.
Ideally, the supportable floor space should be located primarily in the core retail precinct between the railway line and Russell Street, north of Munro Street and south of Bell Street.
Table 7.2.4 Retail Floor Area by Category
source: Jones Lang LaSalle Strategic Consulting
|Turnover by Category ($ million) |
| |2008 |2011 |2016 |2021 |
|Supermarket | 79.7 | 85.1 | 99.4 | 114.7 |
|Food Specialties | 33.5 | 35.8 | 41.8 | 48.3 |
|Department Stores | 20.3 | 21.7 | 25.3 | 29.2 |
|Non - Food Specialties | 29.7 | 31.8 | 37.1 | 42.8 |
|Household Goods | 13.8 | 14.8 | 17.3 | 19.9 |
|Cafes, Restaurants, Hotels | 32.4 | 34.6 | 40.4 | 46.6 |
|Total Turnover | 209.4 | 223.7 | 261.3 | 301.6 |
|Floor Area by Category (square metres) |
|Supermarket | 8,900 | 9,500 | 11,000 | 12,700 |
|Food Specialties | 5,600 | 6,000 | 7,000 | 8,000 |
|Department Stores | 6,800 | 7,200 | 8,400 | 9,700 |
|Non - Food Specialties | 5,900 | 6,400 | 7,400 | 8,600 |
|Household Goods | 5,500 | 5,900 | 6,900 | 8,000 |
|Cafes, Restaurants, Hotels | 7,200 | 7,700 | 9,000 | 10,400 |
|Total Floor Area | 39,900 | 42,700 | 49,700 | 57,400 |
Current trading levels are not available for Central Coburg, however we expect that Central Coburg would be achieving considerably less total turnover than is currently supportable, suggesting that the average performance of retailers is below sustainable levels. Current turnover is likely to be in the vicinity of $150 million rather than $209.4 million. On this basis, Central Coburg has the potential to double its annual turnover by 2021 from $150 million to $300 million.
Spatial Analysis
The following three spatial land use options illustrate the spatial distribution of the supportable retail and commercial floor space in Central Coburg. We have focussed on the Core Retail and Commercial precinct, which comprises Precincts 2 and 3.
The three options presented are:
Option 1: Structure Plan Option
Option 2: Consolidated Development
Option 3 Fragment Development
While all three spatial land use options have positive elements for the development of the Coburg Activity Centre, the Consolidated Option ie Option 2 is likely to deliver the greatest benefits for the Centre in terms of creating a critical mass of retail and commercial development in the key blocks between the Rail Station and Sydney Road, south of Bell Street.
From a planning perspective this will optimise the integration of land use and public transport in the Centre and deliver a more vibrant and active town centre that will enhance the existing offer and character of Coburg. The Consolidated Option also allows for greater flexibility to expand the Coburg Centre in areas south of Victoria Street and East of Sydney Road in the future, if and when the market demand grows to require the role and function of the Centre to change over time.
While a major tenant such as a supermarket on the eastern side of Sydney Road may promote some east-west pedestrian movement, we consider that the western side of Sydney Road provides better commercial opportunities to develop a retail precinct with both food and non-food major tenants as well as supporting specialty retail tenancies. The precinct would be well located close to the rail station and would create a critical mass of retailing in one accessible location.
Concentrating major new development behind Sydney Road retains the fine grain of Coburg’s main street while an expanded retail offer should act as a catalyst for upgrading Sydney Road frontages.
It is acknowledged that Pentridge is part of the PAC and while it should not be considered as part of Central Coburg’s retail or commercial core, a convenience based precinct anchored by a mid sized supermarket (of say 2,000-2,500m2) would service its emerging residential population base while small scale office development would provide opportunities for both local companies to locate close to their home. As the retail and commercial core of Central Coburg develops away from a largely convenience based centre to that more in keeping with its PAC status, with a greater range of comparison shopping and office based employment opportunities, such mixed use development at Pentridge focussed on serving local needs will not be expected to have an undue negative impact on business activity in the core of Central Coburg.
1 Option 1 – ‘Structure Plan’ Option
• based upon Central Coburg 2020 Structure Plan & Strategic Framework Plan vision
• gateway to Central Coburg
• landmark buildings
• activated pedestrian spine
• new open space
Figure 8.1.1 Option 1: Structure Plan Option
source: HASSELL
[pic]
Table 8.1.1 Option 1: Structure Plan Option
Source: HASSELL
|RETAIL |Site Area |Storeys |Sqm |% |NLA |Type |
|Site 4 |2,700 |1.5 |4,050 |80 |3,240 |Fresh Food/ Restaurants/ Cafes |
|Site 7 |3,000 |1.5 |4,500 |80 |3,600 |Non Food Speciality / Gym |
|Site 11 |3,000 |1 |3,000 |80 |2,400 |Supermarket/Non Food Speciality / Cafes |
|Site 12 |3,780 |2 |7,560 |80 |6,048 |DDS (over two levels) |
|Balance | | | | |2,212 |Other retail outside of core / beyond core sites listed above |
|TOTAL | | |23,560 |80 |15,288 | |
|COMMERCIAL |Site Area |Storeys |Sqm |% |NLA |Type |
|Site13 |1,400 |6 |8,400 |80 |6,720 | |
|Site14 |2,000 |8 |16,000 |80 |12,800 |larger commercial tenants |
|Balance |80 -200 |1-2 |7,000 |80 |5,600 |small strata offices & non retail shop fronts in Core and/ or (up to |
| | | | | | |4,000m2) in Pentridge Precinct |
|TOTAL | | |31,400 |80 |25,120 | |
Advantages:
• reinforces key Central Coburg 2020 Structure Plan principles
• reinforces rail station block with both retail & office use
• retains exiting character of Coburg (ie 2 storey heritage areas such as Sydney Rd)
• reinforces key pedestrian spine
• locates significant retail uses on east side of Sydney Road
• retains opportunity for future development on remaining car parks
Disadvantages:
• significant areas remain underutilised
• fragmented subdivision plans may delay redevelopment eg site 13
• relatively small development parcels – may not be commercially viable
• new major tenants have limited specialty retailers feeding off them
• Poor interface between nearby residents and multi-storey development on Site 14
Impact of Bell Street Widening:
• Site 13 building envelope can be moved further south to allow for road widening
• Site 14 building envelope can be moved further south to achieve similar commercial floor space
• Commercial floor areas stated are still achievable, subject to above.
2 Option 2 – ‘Consolidated Development’ Option
• landmark commercial buildings
• reinforced core of Coburg Activity Centre around Station
• activates key section of pedestrian spine
• new town square/ open space
Figure 8.1.2 Option 2: Consolidated Development Option
source: HASSELL
[pic]
Table 8.1.2 Option 2: Consolidate Development Option
Source: HASSELL
|RETAIL |Site Area |Storeys |Sqm |% |NLA |Type |
|Site 5 |5,200 |1.5 |7,800 |80 |6,240 |Supermarket/ Fresh Food - with possible Residential above |
|Site 6 |1,900 |1.5 |2,850 |80 |2,280 |Non Food Speciality / Cafes/ Gym |
|Site 7 |2,800 |1.5 |4,200 |80 |3,360 |Non Food Speciality/ DDS/ Cinema/ Restaurants/ Cafes |
|Site 8 |2,000 |1 |2,000 |80 |1,600 |Fresh Food/ Café/ Convenience |
|Net Loss | | | | |-4,000 |From consolidation, redevelopment (eg. Dimmeys) |
|Balance | | | | |8,020 |Other retail outside of core / beyond core sites listed above |
|TOTAL | | |16,850 |80 |17,500 | |
|COMMERCIAL |Site Area |Storeys |Sqm |% |NLA |Type |
|Site 1 |2,500 |6 |15,000 |80 |12,000 |Larger tenant |
|Site13 |1,550 |6 |9,300 |80 |7,440 |Small to medium tenants |
|Balance |80 -200 |1-2 |12,000 |80 |9,600 |Small strata offices/ non retail shop fronts in core and/ or possible |
| | | | | | |commercial uses (up to 4,000m2) in Pentridge precinct |
|TOTAL | | |36.300 |80 |29,040 | |
Advantages:
• provides critical mass to reinforce rail station block
• utilises 'undeveloped' land i.e. existing car parks
• reinforces 'western side' of key pedestrian spine
• retains existing car parking for City Oval and recreation facilities
• retains opportunity for future re development of remaining car parks
• opportunity to amalgamate sites 1,5,6,7,13 and Coles to enable large scale redevelopment
Disadvantages:
• balance of Centre is underutilised
• ignores development opportunities on east side of Sydney Road
• doesn’t reinforce 'Eastern side' of pedestrian spine
• fragmented subdivision plans may delay redevelopment eg site 13
Impact of Bell Street Widening:
• Site 13 building envelope can be moved further south to allow for road widening
• Reduces potential building envelope of Site 1
• Development of Site 1 could be amalgamated with Site 5 to south to achieve similar commercial floor area
• Commercial floor areas stated are still achievable, subject to above.
3 Option 3 - 'Low Scale/Fragmented Development' Option
• retains existing scale and character
• spreads development throughout core
• some reinforcement of pedestrian spine
• new open space
• redevelops 'under utilised' car parks
Figure 8.1.3 Option 3: ‘Low Scale/Fragmented Development’ Option
source: HASSELL
[pic]
Table 8.1.3 Option 2: ‘Low Scale/Fragmented Development’ Option
Source: HASSELL
|RETAIL |Site Area |Storeys |Sqm |% |NLA |Type |
|Site 7 |3,000 |0.5 |1,500 |80 |1,200 |Fresh Food/ Non Food Speciality / Restaurants/ Cafes |
|Site 9 |4,000 |1.5 |6,000 |80 |4,800 |Supermarket/ Gym |
|Site 10 |3,500 |1 |3,500 |80 |2,800 |Non Food Speciality / Cafes |
|Site 11 |3,000 |1 |3,000 |80 |2,400 |Non Food Speciality / Cafes |
|Site 12 |3,780 |2 |7,560 |80 |6,048 |DDS |
|TOTAL | | |27,560 |80 |17,248 | |
|COMMERCIAL |Site Area |Storeys |Sqm |% |NLA |Type |
|Site 1 |2,500 |3 |7,500 |80 |6,000 |small strata offices |
|Site 7 |3,000 |3 |9,000 |80 |7,200 |small strata offices or larger tenant |
|Site 10 |3,500 |2.5 |8,750 |80 |7,000 |suit larger tenant |
|Site 11 |3,000 |2.5 |7,500 |80 |6,000 |suit larger tenant |
|TOTAL | | |32,750 |80 |26,200 | |
Advantages:
• 'business as usual' option
• spreads new development around Coburg Centre
• retains exiting character of Coburg (ie 2 storey heritage areas such as Sydney Rd)
• retains majority of existing surface car parking
• reinforces key pedestrian spine
• retains opportunity for future development on remaining car parks
Disadvantages:
• unlikely to achieve long term vision of critical mass for the Centre
• difficulty in activating all retail frontages (spread out)
• doesn’t optimise public transport use
• will reduce existing car parking facilities for City Oval off Russell Street.
• Relatively small development parcels – difficult to achieve viable development with adequate parking
Impact of Bell Street Widening:
• Reduces potential building envelope of Site 1
• Commercial floor areas stated are still achievable, but would likely require a four storey development
Retail Use Matrix
Table 9.1.1 Land Use Matrix
Source: Jones Lang LaSalle Strategic Consulting, HASSELL
RETAIL USESERVICINGLOCATIONALSYNERGIESIMPACTSFOOTPRINTFRONTAGEDESIGN CHARACTERISTICSSITE UTILISATIONPOSSIBLE SITESDiscount Department Store (DDS)19m heavy rigid and articulated vehicles
high levels of private vehicle useGood exposure to vehicular traffic
Moderate pedestrian traffic
High level of parkingSupermarket
Fashion Retail
Speciality Stores
Non-food Retail Noise / traffic from deliveries (i.e. late night)
Vehicular traffic
Large footprint
Signage 6,000sqmNo frontage to major roads
Not reliant on activated frontages
Minimise frontage, require finer urban grain
Locate loading, plant and site services (and access points) away from public spaces and residential areas.
Open out ‘internalised’ malls / public areas80%Coles site west of Sydney RoadCouncil car park off Victoria StreetSupermarket19m heavy rigid and articulated vehicles
high levels of private vehicle use Good Vehicular access
High level of parking
Moderate pedestrian traffic
Fresh Food Retailer
Markets
Convenience Stores
Residential Noise from deliveries/late night
Vehicular traffic
Large footprint
Signage 4,000sqm
1500-2000sqm smaller supermarket 40m visible : Not reliant on direct access from main street.
Behind specialty shops
A legible and articulated entrance at pedestrian level.
Appropriate signage
Fine grain at public domain interface
Good connectivity to other majors (eg. DDS)80%Council car park off Victoria Street
Council car park off Russell Street, east of Sydney RoadFresh Food Retailer15m trucks (?)
moderate levels of private vehicle useRequires moderate exposure to vehicular traffic
Moderate level of parking
Moderate pedestrian traffic
Available to commercial population / public transport advantage
Indoor/outdoor synergy beneficialFull Line Supermarket
Cafes/Restaurants
Markets
Public transport
ResidentialWaste
Deliveries~200-500 sqm
Potentially larger for market style operator15m minIndoor / outdoor transition
High level of movement in/through tenancy
Opportunity for destination / point of difference (i.e. markets) 75%Non Food Specialities
(i.e. pharmacies, newsagents, delis),Small delivery vehicles
Low level of private vehicles useRequires low exposure to vehicular traffic
Moderate level of parking
High pedestrian traffic; close to high resident or commercial population
Available to commercial population / public transport advantageResident / commercial population
Public TransportPossible 24 hour
Signage 150-500sqmHigh visibility
Appropriate signage / lighting
Awnings80%Restaurants and Cafes
Small delivery vehicles
Moderate level of private vehicles useRequires low exposure to traffic
Low level of parking (although Moderate for restaurants)
High pedestrian traffic
Close to resident or commercial population
Indoor/outdoor synergy beneficial
Good amenity
Clustering of cafesFresh food areas
Open space areas
Market areas
Leisure and Entertainment
ResidentialLate night noise re: bars150 – 250sqm for each shop
Food and beverage retail (e.g. Café / Restaurant / Bar space) say approx 80-100sqm
Smaller space for an Internet Café (e.g. 25 sqm) 5m min widthHigh visibility
Critical mass preferred however stand alone destination can work
Indoor/outdoor nexus required
“Eat Street
Awnings 85%Victoria Mall
sites along Pedestrian Spine
Pentridge PrecinctFashion Retail Small delivery vehicles
High level of private vehicles useRequires moderate exposure to traffic
Moderate level of parking
High pedestrian traffic
Close to commercial population / public transport advantageDDS
Non-Retail UsesSignage 150 – 250sqm for each shop6-10metresHigh glazing shop fronts
Critical mass, specialist area
Awnings 75%Sydney Road
Adjacent to DDSCommercial (large footprint)
i.e. office 15m trucks (?)
high levels of private vehicle useProximate public transport
Reasonable exposure to traffic routes
Moderate pedestrian traffic
Above active uses
Commercial core if total sqm permitsRetail town centre / pedestrian core
Commercial shop fronts
Daytime café / restaurants
Little night time activity
ATMs for banks
Non-active frontages (disrupting the flow of active uses?)Large – minimum 20-30m deepLarge.
Can be sleeved
Upstairs but Disability requirements?High visibility
Possible tower element as landmark element
Built to street edge
Active uses on ground floor
Possible through site links close to Station
Basement car parking 80%sites on Bell Street close to Rail Line
Council car park off Victoria St?
Council car park off Russell St , east of Sydney Road
Council car park off Victoria St?
Pentridge Precinct
Non Retail Shopfronts
i.e. Banks, Real Estate agents, Travel Agencies, Post OfficeSmall / medium sized delivery vehicles
Low level of private vehicles useModerate exposure to traffic
Moderate pedestrian traffic
Ground floor preferableOther retail services
Signage
Loading / service areas
ATMs for banks
80 – 200sqm
Banks typically larger6-10metresHigh visibility
Preferably not fronting plazasites on Bell Street close to Rail Line?
Residential (medium density)15m trucks
high levels of private vehicle useAdjacent amenity areas (public space, views, etc)
access to public transport
Reasonable access to traffic routes however protected from amenity impactors
Low-Moderate pedestrian traffic
Above active uses Open space / public domain areas
café / restaurants
convenience shoppingmoderate parking requirement
parking conflicts
Land use conflicts
amenity requirements (noise, safety, etc)
servicing
Large – minimum 20m deepCan be sleeved by other uses or above ground floor.
Require highly visible ‘front door’ High visibility
Tower element
Solar access
Views
Amenity
Security75%Existing Car Parks East of Sydney Rd
Existing Car Parks Near Station
Above Proposed Retail Sites Around Station
Pentridge Precinct
General Shop-top Housing
Principles / Objectives
Street Frontages
Maintain existing pattern of development along key street frontages
Highly trafficked streets, malls and plazas require building footprints with relatively narrow street frontages.
Retail frontages generally in the range of 5m – 8m (NB 6m average).
Retail building depth generally 12m-15m.
Anchor Retail
DDS / or other main anchor retailers should be part of the core area to discourage key major attracting retailers pulling customers away from principal activity area.
Specialty retailers require a range of 60m – 100m.
Larger stores can still be accommodated by opening up behind smaller stores – this is typically preferred to wider frontages as the rate per square metre is very much driven by the width of frontage.
DDS typically developed as part of an integrated retail offering / centre with a higher number of specialty retail tenancies associated with it.
Commercial
Optimal commercial building depth up to 25sqm
Seek commercial core (no residential) if total sqm permits
Strong connector to transport nodes – leverage from connecting to transport
Residential Uses
located and orientated to maximise solar access, open space and other amenity areas, views
General
Café/restaurant areas mindful of sun plane, open space and other amenity areas
Fine grain ‘town centre’ type retail along key pedestrian routes
In terms of economics / success factors for retail precincts:
Anchor tenants
Appropriate Parking / good accessibility
Lifestyle / entertainment options integrated with retail destinations
Public transport accessibility
Quantum of residential uses desirable to be integrated with retail/ commercial uses.
Recommendations and Facilitation Strategy
Our recommendations and key outcomes of the report are given below;
Competing Markets
Central Coburg currently competes with both Major and Principal Activity Centres primarily within a 5km radius of the centre. With both Central Coburg and Preston designated as Principal Activity Centres but not currently providing the range of commercial and retail services sought of PACs, strong competition could emerge between these two centres.
There is relatively weak commercial office competition in the immediate vicinity, with developers and occupiers reluctant to invest in traditional main street style precincts. Coburg has advantages over some competing markets, with large sites available in the core as well as on the periphery, in particular within the Pentridge precinct.
Revised Baseline Data
Our modelling suggests that up to 15,920m2 of additional commercial floorspace is supportable for the Coburg PAC to 2021. This is based on a high case scenario and is subject to a number of assumptions occurring, including major tenant pre-commitment to development. It is also our recommendation that much of the current commercial floorspace is redundant and will need upgrading to cater for corporate office occupiers, which will increase the requirement to up to 30,000m2 of new office space by 2021.
The analysis of the potential retail trade area suggests that total supportable floor area will increase by 17,500m2 to 2021. Similar to the current commercial floorspace, much of the existing retail floorspace is secondary and does not achieve economic turnover levels. Therefore, it is anticipated that new retail development will exceed total supportable floor area, with development replacing secondary floor area over time.
Redefining the Commercial and Retail Core
We consider that the retail core should be limited to Precincts 2 and 3 as identified in the Structure Plan. Precinct 6 (Sydney Road/ Bell Street commercial) fronts Bell Street and Sydney Road to the north and is somewhat on the periphery of the rest of the core retail precinct. It has limited opportunities for major retailing due to the relatively narrow depth of blocks fronting the main streets. Precinct 9 covers the Pentridge redevelopment, and will provide a mixed-use development function.
Spatial Analysis
While all three spatial land use options have positive elements for the development of the Coburg Activity Centre, the Consolidated Option ie Option 2 is likely to deliver the greatest benefits for the Centre in terms of creating a critical mass of retail and commercial development in the key blocks between the Rail Station and Sydney Road, south of Bell Street.
The at grade parking area near the oval provides for a range of future commercial opportunities, while providing valuable car parking for existing businesses and in relation with the use of the oval.
Concentrating major new development behind Sydney Road retains the fine grain of Coburg’s main street while an expanded retail offer should act as a catalyst for upgrading Sydney Road frontages.
Our strategies and future work required to activate the Coburg PAC and improve its performance to its optimal potential are given below;
Retail Development
Attracting a non-food anchor tenant is considered critical to changing Central Coburg from a lower order convenience based shopping precinct to a higher order destination centre, offering both convenience and comparison shopping opportunities. Initiate discussions with the major discount department store operators to discuss the Central Coburg opportunity as well as their requirements to potentially anchor future development (in terms of footprint, location etc.) Big W, for example, is not well represented in the inner northern metropolitan area.
Concentrate the first stage of the revitalisation process on the western side of Sydney Road. We consider it is preferable to build on the relatively solid base of convenience shopping located between Sydney Road and the railway line.
Improve east-west links between majors and Sydney Road. Key sites in this regard include the Victoria Mall, The Markets building and existing Coles on Sydney Road. New major development should look at opportunities to link through to Sydney Road.
Balancing modern retail development with traditional high street development. While there has been a strong push in retail development towards “new urbanism” principles, focussing activity on the main street rather than in malls behind the main street, such principles need to be balanced with commercial realities. The existing ownership structure provides significant opportunities for major retail development behind Sydney Road, anchored by key supermarket, discount department store or mini-major tenants. This development should improve the overall commercial viability of the retail precinct, increasing foot traffic and potential rents along Sydney Road, which in turn will promote upgrades to properties fronting Sydney Road. Don’t lose sight of the fact that modern retail development can and should act as a catalyst for upgrading the “main street”.
Promote clustering of complementary retailers by facilitating tenant relocations. This would likely require a degree of council/government funding to assist with the relocations, but in the long run will provide better economies of scale for these occupiers, and assist in attracting stronger performing retailers.
Redevelopment of Library: This site occupies a strategic site on Victoria Mall but does not provide an activated frontage to this key public area. There is an opportunity for the frontage to be redeveloped for retail uses, the library to open up to the plaza as a community centre or possibly the library to be relocated as part of a future retail development, with this site developed for retail uses.
Activating Sydney Road: Streetscape improvements and building upgrades to provide higher quality tenancies are critical to encouraging a vibrant, active retail environment along Sydney Road. We consider this should and most likely will occur organically, with the attraction of a high profile non-food anchor tenant and supporting new retailers being a key driver. Improved east west links will be critical to ensure Sydney Road benefits from new investment. The tram line itself provides a form of activation. While many of the every day, national chain retailers may be drawn to a modern retail development set behind Sydney Road, we consider that a more unique and eclectic group of specialty retailers, cafes and restaurants will be drawn to the main street, that builds on the existing Coburg character. Council can help facilitate this by careful consideration to the linkages between Precinct 2 and Sydney Rd (as mentioned above), preferably via interesting laneway style access, as well as Victoria Mall.
Commercial Development
We consider that significant commercial development will only occur once retailers appropriate for servicing a corporate tenant are in place (eg good cafe/restaurants, high quality service retail) and relative streetscaping is undertaken. Therefore, commercial development of the precinct should be staged at the later end of the revitalisation. That said, certain precincts, including Precinct 9, are development ready for some of the smaller, local occupiers, and development here could be occur in the earlier stages of the revitalisation process.
Target Tenants - tenants that typically don’t need to be located in the inner city, and can benefit from close proximity to export markets (the airport, Hume Freeway) as well as manufacturing/supplier base. Good examples include fashion/apparel type tenants, creative firms/advertising agencies, IT firms who have a largely back office function and won’t pay CBD rents, Call Centre operations with limited face to face contact with customers, as well as the local business services sector who are looking for a professional base to access their surrounding market.
Government Occupiers – position Central Coburg as ‘development ready’ in order to attract government tenants that are looking for a northern suburban ‘home’.
Development Make-up – while remaining flexible with regards to the available development sites (and therefore ultimately developing according to demand), we suggest that the tenant mix should be targeted towards the following;
Large (2,000m2 +) tenants to be located on the larger development parcels in Precinct 3. Developments of this size will require pre-commitment, and will have a greater need to be co-located with public transport. We envisage this to be a medium to longer term strategy, as a significant level of retail and streetscape improvement will need to occur before Precinct 3 is realistically ready for Commercial activation.
Small to medium strata titled space could be developed in the early stages in Precinct 9 (Pentridge). It is noted that a small strata development (approx 750m2) is already completed. These firms will be attracted to the service retail to be provided at Pentridge, and a location on the periphery of the core can be attractive to those firms who have a car parking and car access requirement (Bell St), while still being relatively close to trams and rail.
Pro-active search for major commercial tenant. We recommend putting together a professional prospectus (in conjunction with the major development partners), available on The Coburg Initiative website, detailing the available development parcels and the estimated NLA available for development at each. Separate documents should be generated for the smaller, local business services sector (up to 2,000m2) to the larger occupiers who will be looking at larger development footprints. Distribute prospectus to the major Tenant Representative firms, as well as local real estate agents.
Other
Site Impediments – There are a few sites that are strategically located in the western core and adjacent to the major council-owned development parcels that have the potential to present impediments to development. These sites are currently occupied by Dimmeys and Bargain Homewares and Gifts, and present significantly run-down facades. Relocation of these occupiers should be considered, to allow for regeneration of the occupied land.
Car Parking – Much of the proposed retail, commercial (and possibly residential) will be built on current car parking allotments. While wanting to encourage increased use of public transport in the longer term, parking will still be an important requirement for a customer base that is accustomed to plentiful parking, as well as the commercial occupiers (who will usually require a car park ratio of 3-4:100m2). We therefore recommend that adequate parking is a key consideration in all new retail/commercial development.
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[1] DPCD, Victoria in Future 2008
[2] DPCD, Victoria in Future 2004
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Jones Lang LaSalle Pty Limited
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