Lara Structure Plan. Retail Development Issues

Transcription

1 Lara Structure Plan Retail Development Issues For The City of Greater Geelong March 2009 Economic Analysis + Strategy

2 Report Data Version Date Approved By Sent to Draft Final 11 March March 2009 TN TN Jani Chalmers and Tim Hellsten, City of Greater Geelong Jani Chalmers and Tim Hellsten, City of Greater Geelong Prepared by: Economic Analysis + Strategy ABN: Scotia Street West Preston Victoria 3072 Australia Tel: tim@timnott.com.au Web:

3 Table of Contents 1 Introduction Retailing in Lara Activity Centres in Lara Activity Floorspace Retail Sales The Existing Retail Situation The Activity Centre Network in the Region Defining the Retail Trade Area Trade Area Population Forecast Population Trade Area Characteristics Retail Spending Current Balance of Retail Supply and Demand Prospects for Retail Development Existing Retail Shortfall Growth in Retail Spending Retail Floorspace Potential Non-Retail Floorspace Land Required for Activity Centre Functions Options to Accommodate Commercial Land Requirement The Lara Town Centre Urban Design Framework Expanding the Existing Supermarket Development of a New Neighbourhood Activity Centre Recommendations on Further Retail Development Conclusions References Please Note The findings of this report have relied on professional judgement as well as on primary and secondary data sources. Whilst the author believes any assumptions contained in the report are reasonable, the reader should bear in mind that there is no certainty in prediction.

4 1 1 Introduction The township of Lara in the City of Greater Geelong has experienced rapid population growth over recent decades, and this growth is forecast to continue for some years to come. Council officers prepared a structure plan which was adopted in Parts of this plan are currently being reviewed. An Urban Design Framework (UDF) was also prepared for the Lara town centre by David Lock Associates (2006). This plan includes the expansion of the existing centre into Austin Park which is owned by the Commonwealth and over which Native Title still applies in part. Council is working to resolve the issues in relation to purchasing the land from the Commonwealth and negotiating an Indigenous Land Use Agreement with the traditional owners. The land purchase issues are complex and their resolution may take some time. In the meantime, the local community continues to suffer from a lack of retail and other services in its town centre. Council and community are now investigating options for provision of these services including expanding the town centre as proposed in the UDF, expanding the current supermarket, or looking at an out of town centre site (neighbourhood centre or similar) within the town boundary. The current UDF identifies the following key points in relation to retail activity in Lara: The current town centre is constrained and expansion opportunities are limited with the only real option being Austin Park. There has been and will continue to be strong population growth. Escape expenditure is high and residents need to travel outside the town for basic retail needs. There is a need for a full line supermarket and potentially a second supermarket. The Centreway (town centre) should remain the primary focus of retail activity in the township. Council requires advice on the retail development issues in the town in order to guide preparation of a revised structure plan and to provide direction for the town centre development. In particular, the Council is keen to understand the likely demand for growth of the existing Lara town centre; and the potential for, and effect of, the development of a new activity centre to serve the Lara community. The report has been prepared by development economist. The document reports on the following: The current retail activity in Lara and the function of its town centre The trade area of the Lara town centre and the retail spending patterns of its residents The retail floorspace and sales in the trade area and the current balance of supply and demand in the sector, including the extent of escape spending from the area Forecasts of future population growth and retail spending and the consequent growth in supportable retail floorspace in Lara Recommendations on appropriate locations for additional retail floorspace and the structure of the activity centres serving the town A summary of findings is provided at the end of the document.

5 2 2 Retailing in Lara 2.1 Activity Centres in Lara The retail offering in Lara is provided in three separate activity centres: The Lara town centre, around Centreway, Station Lake Road and Waverley Road is the largest retail precinct in the township, providing a small Safeway supermarket and a range of specialty shops and other services. This centre is the subject of the Urban Design Framework which envisages expansion of the centre onto adjacent parkland. The station precinct is an area of land zoned B4 between Hicks Street and Clover Street close to the railway station on the eastern side of the railway line. This area accommodates a small range of shops and offices, a large hotel and several light industrial premises. The precinct still contains some vacant land. Patullos Road, to the west of the town centre, is a local activity centre providing a general store, take-away food and several health-related enterprises. The location of these centres is shown in the figure below. Figure 1: Activity centres in Lara Patullos Road Lara town centre Station precinct Source: base map from Google Earth

6 3 2.2 Activity Floorspace The following table shows the types of activity present in each centre. Table 1: Premises and floorspace in Lara s activity centres Total Lara activity Type Lara Town Centre Lara station precinct Patullos Road centres Premises Floorspace Premises Floorspace Premises Floorspace Premises Floorspace no. sq m no. sq m no. sq m no. sq m Supermarkets and grocery stores 2 1, ,850 Specialty food Total food and groceries 8 2, ,563 Clothing Homewares Recreational goods Other retail goods Food service Retail services Total retail goods and services 27 3, ,114 Health services Community services Entertainment and recreation Repairs, manufacturing and storage 6 1, ,900 Other commercial services ,831 All activities 44 6, , , ,110 Source: consultant surveys undertaken January 2009 The activity survey shows: Lara town centre is the largest activity centre and provides most of the shops and 77% of the retail floorspace in the township. The station precinct is principally a light industrial location, with some entertainment and other services. It provides 8% of the retail space in Lara. Patullos Road provides a small convenience grocery function and take-away food service. It provides 15% of the retail space in Lara. Overall, Lara has 5,100 sq m of retail floorspace. The key features of the retail offering are: A relatively small supermarket of 1,450 sq m (and the small size of the supermarket is likely to lead to many local residents to travel outside the township to centres that have larger supermarkets with a broader range of goods). The township has a range of retail goods and services that offer convenient dayto-day shopping. However, several types of shops are missing from the local offering shoe-shops, hardware stores, furniture and white goods stores, plant nurseries, restaurants, and so on.

7 4 2.3 Retail Sales The following table provides an estimate of retail sales in the trade area. The sales per sq m have been estimated from a variety of statistical and industry sources. Table 2: Retail sales in the Lara trade area, 2008 Retail type Source: consultant estimates Retail floorspace Sales per sq m Retail sales sq m $/sq m $m Food and groceries 2,560 $8,500 $21.8 Household goods 200 $5,500 $1.1 Other retail goods 1,090 $5,000 $5.5 Food service 710 $4,500 $3.2 Retail services 560 $2,500 $1.4 Total retail 5,120 $6,400 $32.9 Total retail sales in the Lara trade area are estimated at $33 million in Of these sales: 66% were sales of food and groceries 81% of trade area sales were made in the Lara town centre The following sections of the report examine the retail spending of trade area residents and the balance between spending and sales.

8 5 3 The Existing Retail Situation This section provides a snapshot of the retail demand and supply situation in Lara and surrounds. It places the Lara Town Centre in its regional context and identifies a trade area for the centre. The population and retail spending of this trade area are estimated from secondary sources. The spending of residents is compared to the estimated sales in local shops to understand the current balance between retail supply and demand and the level of spending which flows to shops outside the trade area. 3.1 The Activity Centre Network in the Region Most communities in Victoria are served by a network of activity centres, with each centre performing a different role and providing a different, albeit overlapping, set of goods and services. This network is usually described as a hierarchy; larger, fewer centres deliver regional level services and offer a more complete range of retail goods; smaller, more numerous centres offer localised services and a smaller range of retail goods usually providing day-to-day groceries and convenience items. The following table sets out the activity centre hierarchy used in this report. It broadly corresponds to that developed for Council in the latest retail strategy (Essential Economics, 2006), although the designation of town centre has been removed as it overlapped extensively with other levels in the hierarchy. Table 3: Broad hierarchy of activity centres Level in the hierarchy Retail role Relevant example Typical catchment population Indicative retail floorspace Capital City Central Activities District Extensive comparison goods and services; culture, entertainment; dining Includes department stores and many specialty stores Melbourne CAD 1 million plus More than 300,000 sq m Regional centre Extensive comparison goods and entertainment Includes department store, supermarkets and many specialty stores Also applies to some large specialty centres that cater to an extensive catchment Geelong CAD Werribee Plaza 100,000 plus More than 70,000 sq m Sub-regional centre Routine comparison goods as well as food and groceries Waurn Ponds 50,000 plus 15,000 to 40,000 sq m Includes discount department store, supermarkets and specialty stores Also applies to some specialty centres that cater to a significant catchment Belmont Corio Community centre Food and some comparison goods Includes supermarkets and specialty stores Pakington Street 20,000 plus 10,000 to 25,000 sq m Neighbourhood centre Mainly food and groceries and other convenience goods and services Lara town centre 5,000 to 15,000 2,500 to 12,000 sq m Includes supermarket(s) and specialty stores

9 6 Local centre Convenience goods Usually comprises a corner grocery store and may include take-away food and local services Patullos Road, Lara Up to 2,000 Up to 1,000 sq m In this hierarchy, the Lara town centre is a Neighbourhood Activity Centre. The role of this type of centre is to provide for the convenience needs of its catchment as well as some minor comparison shopping. It is important to note that every area is different and not all are served by each of the levels in this hierarchy. Lara, for example, has only one local centre. In this case, the retail spending that would otherwise go to local centres flows to the Lara town centre or regional and sub-regional centres outside the town. 3.2 Defining the Retail Trade Area The trade area of an activity centre is, broadly, the geographic area from which it gets most of its sales. The definition of a trade area is an important step in calculating current and potential future demand for commercial activity. The retail and other commercial activities in the Lara town centre serve an area larger than the township. The extent of the trade area is influenced mainly by the function of the centre in the regional hierarchy of centres, the location of competing centres, and the travel patterns of residents. 1 The following figure shows the nearest activity centres to Lara and the location of these competing facilities is used to estimate the trade area for the Lara town centre. For the purposes of this report, the area within the red line is the main trade area for the Lara town centre; for people living within this area, Lara is the closest neighbourhood centre from which they can access convenience goods. The precise boundaries of the retail trade area have been set to coincide with convenient statistical areas for which data is available. In this case, the trade area for Lara is based on Census Collector Districts defined by the ABS. In general, Lara town centre serves the township and the rural areas in the City of Greater Geelong between the Geelong-Bacchus Marsh Road and Corio Bay. 1 This assessment concentrates on the retail industry as the defining function of activity centres; however, it is certainly the case that most centres also have a wide range of important community, cultural, entertainment and other commercial service functions.

10 7 Figure 2: Lara Trade Area and Surrounding Centres Key Regional activity centre Sub-Regional activity centre Bulky goods precinct Neighbourhood or other supermarket-based centre Source: Base map from Google Maps

11 8 3.3 Trade Area Population The population of the Lara trade area in 2008 is estimated for this report to be 13,860. Between 2001 and 2008, the trade area population is estimated to have grown at 2.0% per year. Comparison populations are provided in the table below. Table 4: Estimated resident population in Lara and its trade area, 2001 to Rate of Growth 2001 to 2008 no. no. no. % per year Lara township 9,770 10,970 11, % Lara trade area 12,100 13,590 13, % Greater Geelong 194, , , % Victoria 4,804,730 5,128,310 5,262, % Source: ABS, 2008; ABS, 2007; and consultant estimates Note: Figures for 2008 have been projected using the growth rate from 2006 to Forecast Population The following population forecast for the Lara trade area has been based on growth rates for Lara prepared by id consulting for Council. Figure 3: Forecast population growth in the Lara Trade Area, 2008 to ,000 20,000 18,000 Estimate 16,000 Forecast 14,000 Forecast assuming unconstrained land supply 12,000 10,000 Source: id consulting, 2008; consultant estimates

12 9 The population of the trade area is forecast to grow by 3,690 over the period from 2008 to 2021 to a total of 17,550 at an average rate of 1.8% per year. However, the growth rate forecast for Lara by id consulting leads to no growth in population (and even a slight decline) between 2021 and This forecast is strongly influenced by the availability of residential land, which is assumed to become severely constrained after Should this situation change, with the release of more land than expected, the population of Lara may continue to grow at relatively high rates and at least at the rate forecast for Geelong as a whole. In this situation, the trade area population could be approximately 18,000 in 2021 and 21,000 by For the purposes of this report, the lower population forecast is used to calculate retail demand. However, the reader should bear in mind the potential for higher rates of population growth. 3.5 Trade Area Characteristics Selected characteristics of the people of the Lara trade area are shown in the table below. Table 5: Selected characteristics of the Lara trade area, 2006 Population Median age Born in Australia Managers and professionals Median individual income Census count years % % in labourforce $/week Lara township 10, % 25% $492 Lara trade area 13, % 26% $485 Greater Geelong 197, % 29% $407 Victoria 4,932, % 34% $456 Source: ABS, 2007 Lara is largely a commuter settlement in which a high proportion of working families are buying their home. Local workers are employed in the manufacturing, transport and service sectors of Geelong and western and central Melbourne as well as in the Marngoneet and Barwon prisons which are in the trade area. Local workers are skilled but with a relatively low proportion of managers and professionals. Median incomes are relatively high as a result of a higher than average proportion of people who are working (and a lower proportion of pensioners and retirees). Many people have settled in Lara because of proximity to work in a small town or semi-rural environment and relatively low house prices. 3.6 Retail Spending An estimate of current retail spending per person in the Lara trade area is provided in the table below. The estimate is based on the Market Info micro-simulation model which uses the ABS household Expenditure Survey, Census of Population and Housing and other data sources to provide estimates of small area spending patterns.

13 10 Table 6: Annual retail spending per person, Lara trade area and Victoria, 2008 Retail type Lara trade area Victoria $ $ Food and groceries $5,000 $5,200 Household goods $2,000 $2,000 Other goods $2,500 $2,700 Food service $1,400 $1,500 Retail services $300 $300 Total retail spending $11,200 $11,700 Source: MDS Market Data Systems, 2002; ABS, 2008; consultant estimates Annual retail spending per person is slightly lower in the Lara trade area than in Victoria as a whole, despite the higher than average incomes in Lara. This reflects the slightly higher household size and the larger number of households paying mortgages than average. (The prison population 570 people at the last Census is not counted in these figures and has no influence on the average income of the area.) Using the population estimated in the previous section, the following table provides an estimate of total retail spending by the trade area population. Table 7: Retail spending by the population of the Lara trade area, 2008 Retail type Average spending per person $/year Retail spending $m/year Food and groceries $5,000 $66.4 Household goods $2,000 $26.6 Other goods $2,500 $33.2 Food service $1,400 $18.6 Retail services $300 $4.0 Total retail spending $11,200 $148.8 Source: MDS Market Data Systems, 2002; ABS, 2008; consultant estimates Note: allowance has been made for the prison population in these spending figures In 2008, the total retail spending by the people living in the Lara trade area was approximately $155 million. This expenditure was made in shops throughout the region and beyond. The following section examines how much of this spending was made in Lara. 3.7 Current Balance of Retail Supply and Demand The following table provides an estimate of the current balance between the supply and demand for retailing in the Lara trade area.

14 11 The estimate of sales to visitors is based on experience of activity centres elsewhere and is relatively low because relatively few people travel through Lara and the township has few retail facilities that would attract people from beyond the trade area. Table 8: Retail sales, resident spending and escape spending, Lara trade area, 2008 Retail type Current sales Sales to visitors Sales to residents Total resident spending Escape spending $m % $m $m $m $m % Food and groceries $21.8 5% $1.1 $20.7 $66.4 $ % Household goods $1.1 10% $0.1 $1.0 $26.6 $ % Other goods $5.5 10% $0.5 $4.9 $33.2 $ % Food service $3.2 5% $0.2 $3.0 $18.6 $ % Retail services $1.4 5% $0.1 $1.3 $4.0 $2.7 67% Total retail spending $32.9 6% $2.0 $30.9 $148.8 $ % Source: consultant estimates Currently, then, approximately 79% of the spending of trade area residents is made outside the trade area. This spending flows mainly to the larger supermarkets and comparison goods shops in Geelong, particularly the sub-regional centre of Corio Village, the bulky goods precincts on the Princes Highway and the Geelong CBD. Whilst neighbourhood centres such as the Lara town centre do not generally compete strongly in household goods and other goods, they do often manage to capture 15%-30% of resident spending in these areas, compared with only 10% in Lara. Of most concern, the shops in Lara only supply 31% of the value of food and groceries to local people. Typically, neighbourhood centres are established to cater to the convenience retail needs of residents, especially their needs for food and groceries. These centres usually supply over 50% of the food and grocery needs of their trade area residents. Currently, the Lara activity centres, principally the Lara town centre, are not performing a strong service for local residents. In estimating the potential to expand the retail offering in Lara, this factor must be taken into account.

15 12 4 Prospects for Retail Development The retail growth prospects in Lara rely on: investment that may occur to make up for existing shortfalls in provision investment that may need to occur to satisfy the retail needs of a growing local population competition from other locations Any further retail investments in Lara also rely on appropriate space being available in the town. [Retail growth prospects also rely to some extent on the economic cycle. It appears that an economic slowdown is currently in progress, with the possibility of a period of economic decline. However, judging by the history of the last 150 years or so, this will rebound to a period of renewed growth (hopefully in a more sustainable form than previously). In understanding demand for land-use over several decades, it is usual to ignore the short term fluctuations of the economic cycle.] 4.1 Existing Retail Shortfall The previous section has identified a relatively high escape spending from the Lara trade area, indicating that local shops are not providing a sufficient service to the trade area residents. Neighbourhood shopping centres such as Lara town centre typically provide 30% to 40% of resident spending. In particular, the provision of food and groceries typically accounts for at least 50% of resident spending. If the shops in Lara, principally the town centre, were able to capture a share of resident spending that was more typical for a neighbourhood centre (say, around 35% of available resident spending), the local retail sector could take an additional $20 million per year currently. Capturing this additional spending would rely on the development of more shops. In particular, a larger supermarket would be warranted. If Lara were to be able to capture 50% of current resident spending on food and groceries, a further 1,200 sq m of supermarket space would be required. 4.2 Growth in Retail Spending Retail spending in the trade area is likely to grow as a result of growth in the population and growth in real spending per person. Real growth in retail spending per person has averaged around 1% per year over the period since This long term rate of growth, over several economic cycles is used here. The following table provides an estimate of how spending on various retail categories will change over the period to 2031.

16 13 Table 9: Forecast of retail spending by residents of the Lara trade area, 2008 to 2031 ($2008) Trade area population 13,290 13,990 16,980 16,920 $m $m $m $m Food and groceries $66.4 $75.5 $96.8 $106.6 Household goods $26.6 $29.4 $39.1 $42.3 Other goods $33.2 $39.2 $47.5 $52.5 Food service $18.6 $21.0 $27.2 $30.5 Retail services $4.0 $4.2 $5.1 $6.8 Total retail spending $148.8 $169.3 $215.6 $238.6 Source: Consultant estimates Note: population figures have been adjusted to take account of prison population Retail spending by the trade area residents is forecast to grow from $149 million in 2008 to $216 million in 2021, a growth of $67 million. 4.3 Retail Floorspace Potential The following table provides an estimate developed for this report of the potential growth in retail floorspace in the Lara trade area over the period to The assumptions behind this estimate of floorspace potential include: Retailers become continuously more efficient and retail sales per sq m rise by 0.5% per yea New retail space is attractive enough to reduce escape spending by trade area residents to 65% of their overall retail spending (from 79% currently). Spending by visitors continues to form the same proportion of overall sales as currently Retail competition from centres outside the trade area remains steady Table 10: Forecast growth in retail floorspace potential for the Lara trade area, 2008 to 2031 Retail type 2008 to to to to 2031 sq m sq m sq m sq m Food and groceries 2,100 1,200 3, Household goods , Other goods Food service , Retail services Total retail spending 4,400 2,400 6,800 1,300 Source: consultant estimates

17 14 This forecast suggests that by 2021, the Lara trade area could support a further 6,800 sq m of retail floorspace, including 3,300 sq m of food and grocery space. Floorspace potential continues to grow after 2021 because the spending per capita increases even though the population is forecast to decline slightly. This forecast allows for the provision of a new full-line supermarket in the trade area over the next 13 years. If the existing supermarket were to expand, there is adequate demand to support its growth to a full-line supermarket immediately.

18 15 5 Non-Retail Floorspace In addition to the retail space, Lara s activity centres host a variety of non-retail functions. These include: Health and community facilities Banks, real estate agents and travel agents Professional services (accountants etc) Pubs and clubs Recreational facilities Storage Light industrial activities such as auto repairs, engineering etc These functions add to the multi-functional nature of the centres and to the local employment offering. The mix of functions in activity centres enable consumers to make multi-purpose trips that reduce travel, create infrastructure savings and improves urban sustainability. The demand for these services does not depend predominantly on the size of the local population, as with retailing, but on a variety of factors including local skill and occupational levels, the business mix in the wider area, proximity to clients, transport access, availability of space, and the ability of local property developers. No analysis of the wide variety of demand factors is made here. However, in order to provide a useful guide for the structure planning process, this report makes a forecast based on the share of total floor-space taken up by non-retail activities in Lara and elsewhere. Currently, around 35% of the floorspace in the Lara town centre accommodates nonretail activities. The following chart compares the proportion of non-retail space in Lara and a selection of other broadly comparable country towns in Victoria. Figure 4: Proportion of non-retail space in selected activities centres Lara Bacchus Marsh Bannockburn Drysdale Gisborne Korumburra Romsey 0% 10% 20% 30% 40% 50% 60% 70% Source: consultant surveys and estimates

19 16 The chart shows that there is no strong pattern of non-retail provision but that, in general, the provision is somewhere between 30% and 60% of all activity space. For the purposes of this report, the future demand for non-retail space is estimated to be 35% of all activity space required for the town centre (excluding industrial activity and major wholesale activity). This continues the existing balance between retail and non-retail space in the town centre. Over the period to 2021, then, the activity centres in Lara will need to accommodate a further 3,700 sq m of non-retail floorspace (that is, 35% of the total expected growth in floorspace). The following section looks at the demand for land to accommodate the growth in both retail and non-retail space over the coming period.

20 17 6 Land Required for Activity Centre Functions The table below provides an estimate of land area required for activity centre functions in Lara over the period to The calculations assume: Lara will be required to accommodate 6,800 sq m of additional retail space and 3,700 sq m of non-retail commercial space over the period to 2021 all development is single storey car-parking provision is 4.6 spaces per 100 sq m of retail space and 3.6 spaces per 100 sq m of other space broadly as detailed in the Lara town centre UDF Table 11: Notional demand for additional land providing activity centre functions in Lara, 2008 to 2021 Retail Total 2008 to 2021 activity Other activity activity Total demand (sq m) 6,800 3,700 10,500 Car-parking requirement (spaces per 100 sq m) Number of parking spaces required Land required for car-parking (@30sq m per space) 9,400 4,000 13,400 Land required for landscaping and circulation (10% of total) 1, ,700 Total demand for land (sq m) 18,000 8,600 26,600 Source: consultant estimates; figures rounded This calculation provides an estimate that 2.7 ha of land will be required for activity centre functions in Lara over the period to This forecast may be lower if some development can be double storey and/or if the car-parking requirement is reduced.

21 18 7 Options to Accommodate Commercial Land Requirement 7.1 The Lara Town Centre Urban Design Framework The clear policy preference of Council is to accommodate new commercial activity (retail and non-retail) in the Lara town centre. The intent of the Lara Town Centre Urban Design Framework (UDF) is to make room for new commercial space so that the centre can effectively serve the local population. The following figures show the desired transformation of the town centre as it extends into the adjacent Austin Park. Figure 5: Existing town centre Source: Google Earth Proposed extension to the town centre into Austin Park Figure 6: Masterplan for new Lara town centre Source: David Lock Associates, 2006

22 19 The present UDF provides for a total of 8,200 sq m of additional activity space, most of which is planned for development on part of the site now occupied by Austin Park. This additional space expected by the UDF is detailed below: Table 12: Additional activity space catered for in the UDF Source: David Lock Associates, 2006 It is not clear exactly how much of the additional space is to be retailing (since the showroom space could be retail, wholesale or some other type of activity), but it would be at least 4,900 sq m and up to 7,400 sq m. The key additional stores are a new full line supermarket of at least 3,500 sq m; and a mini-major such as a small discount department store (Country Target or similar), which could locate in the building vacated by the existing supermarket. The proposed provision of additional space in the UDF broadly accords with the retail demand forecast developed for this report (6,800 sq m). The provision of non-retail space in the town centre in the UDF appears to be a little lower than the forecast in this report. However, the UDF also allows for the development of non-retail space in the wider town centre precinct such as the emergency services hub on Mill Road. In general, the town centre expansion proposed in the UDF can accommodate most of the forecast for additional land requirements developed for this report, particularly if some of the non-retail space can be provided above new or existing shops. Some activities such as wholesaling or large format sales could be readily accommodated in the Station precinct, between Clover Street and Hicks Street, where there is some vacant or under-utilised land. Other large format commercial or community uses could be accommodated in other locations on the fringe of the town centre, including McLelland Avenue and Mill Road and potentially in the railway reserve. The Patullos Road local activity centre may have some room for minor additions but is generally fully developed. In addition, there may be potential to develop a further local activity centre to service the needs of residents who live some distance from the existing centres. This could be in the western sector of the township which is nominated in the structure plan as a growth area. The following table provides a notional allocation of the demand for space between various activity centres in Lara between 2008 and 2021.

23 20 Table 13: Notional allocation of floorspace to activity precincts in Lara, 2008 to 2021 Activity precinct Floorspace sq m % of total Lara town centre - Austin Park 8,200 78% Other town centre precinct 500 5% Station precinct 1,000 10% Patullos Road 200 2% New local activity centre 600 6% Total 10, % Source: consultant estimates The forecast demand for space in Lara could be accommodated within the existing centres and in a small local centre. The preferred policy position of Council, as expressed through the 2007 Structure Plan and the Urban Design Framework, is therefore feasible in market demand terms. However, there may be a delay in realising the expansion of the town centre onto Austin Park because of land acquisition issues (as detailed in the Introduction to this report). This factor has led to the consideration of some other options for expansion of the centre and these are explored here. 7.2 Expanding the Existing Supermarket The key improvement that needs to be made to the town centre for the benefit of local residents is the provision of a more comprehensive food and grocery offering. The owners of the land occupied by the existing Safeway supermarket have expressed an interest in expanding the supermarket to 3,500 sq m. However, their site is not quite large enough to accommodate the building and associated carparking. The owners have developed a plan that requires the acquisition of a portion of the roadway used for Waverley Road. The proponents suggest that the reserve for Waverley Road is relatively wide and that the road does not take up all the available land. Nevertheless, the road would need to be realigned within the reserve to allow the development. If this were technically feasible within the existing property boundaries, it could provide a solution to the need for an improved food and grocery offering. It is possible that this solution would take less time than the expansion of the town centre as envisaged in the UDF, although the proposal would require a range of approvals. This solution would not hinder the extension of the town centre into Austin Park in a technical sense (although some redesign of roadways and buildings would be required). However, the development as envisaged in the UDF has a large supermarket as a key anchor. This proposed anchor tenant will be a strong attraction for any commercial developer of the Austin Park site, particularly as the developer may also be called on to provide community facilities as well as infrastructure. The retail demand picture shows that two full-line supermarkets are unlikely to be viable in Lara over the period to The estimate of retail potential developed for this report suggests that the food and grocery demand will require a total of

24 21 approximately 5,900 sq m in the trade area by 2021 (a growth of 3,300 sq m compared with the present situation). This will accommodate one large supermarket (3,000 to 3,500 sq m), one small supermarket (up to 1,800 sq m), a necessary range of specialty food shops (currently 700 sq m) and several general stores in the smaller activity centres (currently 400 sq m). If the large supermarket is developed as an expansion of the existing facility, the new development on Austin Park will be left to accommodate a small supermarket that may not be viable until closer to This is likely to be a less attractive proposition to any commercial developer of Austin Park. This solution is likely to require a redesign of the type of activities proposed by the UDF for the extension of the town centre. It may put back the need to encroach on Austin Park; although the provision of a successful full-line supermarket at Lara may encourage investment by other types of retailers and non-retail operators. If this option is technically feasible in a timeframe that is shorter than the UDF option Council will need to make a choice between short term satisfaction of service needs and the viability of its long term plan for extension of the centre into Austin Park. 7.3 Development of a New Neighbourhood Activity Centre A third option for the satisfaction of local retail needs being canvassed by some stakeholders is the development a new neighbourhood activity centre. This does not yet appear to be a well developed plan, and no firm location has been selected, but the proposal is for a new centre that can quickly accommodate the local requirement for a large supermarket. A new supermarket-based centre would also have a range of specialty shops and, judging by the formats developed elsewhere, would probably have a retail floor area in the range 4,000 to 6,500 sq m. There are several difficulties with this proposal: The length of time required for a rezoning to accommodate a significant activity centre is likely to be a minimum of 18 months and could be as long as 30 months. This could be comparable with the time required for acquisition of Austin Park to accommodate Council s preferred solution. There is no guarantee that a Panel convened to adjudicate the requested rezoning would recommend in its favour. Panel members would need to be convinced that State policies supporting the rational development of activity centres were satisfied and that the likely impact on the existing town centre was acceptable. If approved, a new neighbourhood activity centre with a full-line supermarket would tend to replace the existing town centre over time. Shoppers would be likely to use the new centre in preference to the existing town centre because of the superior food and grocery offering. This factor would induce investment in the new centre and over time, activity would drift from the town centre to the new centre. The existing town centre would decline, with remaining property owners and operators experiencing a loss in revenues and asset values. If restrictions were put in place to protect the existing town centre (such as retail floorspace limits on the new centre), it would be likely that neither centre would achieve its full potential and that the service to local residents would be never be as good as it could be.

25 22 There are good reasons for concentrating activity into a hierarchical network of centres. Such an arrangement: creates more sustainable urban development by enabling multi-purpose trips by consumers and thereby reducing energy use generates more customers for traders by concentrating activities together, encouraging the highest possible level of service consistent with commercial viability enables more efficient delivery of infrastructure provides more security for investors that their assets will retain value over the long term, which, other things being equal, encourages investment The introduction of a new activity centre into a trade area already served by a centre at a similar level in the retail hierarchy will create inefficiencies and confusion amongst consumers and investors. The provision of higher order services would be delayed until it became clear which centre was dominant. This course of action could only be recommended if the existing town centre was clearly in the wrong position or had no prospect of expanding. On the contrary, the town centre remains broadly central to the urban area and, as discussed above, there are several options for its expansion. 7.4 Recommendations on Further Retail Development Market demand in Lara over the period to 2021 is likely to support the provision of a full line supermarket as well as substantial non-food stores, in addition to the existing shops in the area. Further major retail development in Lara should take place at the existing town centre in order to maintain a sustainable urban form, to safeguard existing investments both public and private, and to bring forward the provision of higher order retail functions. This is the intent of the Lara Town Centre Urban Design Framework, which is Council s current policy framework for future development in the area. An improved food and grocery service is currently the most pressing requirement for local residents. Whilst the expansion of the existing supermarket, if technically feasible, may provide a short term solution to this issue, it may make the long-term development of the town centre, as recommended in the UDF, more commercially difficult. This is a tactical development issue for the Council. The proposal for a new supermarket-based activity centre would require a substantial time to progress; it may not be successful in gaining approval; and it would almost certainly cripple the existing town centre and delay the provision of higher order retail activities. For these reasons it would be better to abandon the idea and put more resources into progressing the development envisaged in the UDF. Market demand would be sufficient to support a small local activity centre in addition to the expansion of the town centre proposed in the UDF. This is best located in the growth area on the western fringe of the township to provide a local retail service for residents who will be some distance from the existing activity centres.

26 23 8 Conclusions This analysis of retail and activity centre development in Lara provides the following findings: 1. The Lara town centre serves the Lara township and rural areas to the north and east of the town. The current population of this trade area is approximately 13,900 and has been growing at around 2.0% per year over the period 2001 to The Lara trade area contains around 5,100 sq m of retail floorspace in three activity centres the Lara town centre, a nearby activity precinct around the railway station, and a local centre around the intersection of Patullos Road and Forest Road. The Lara town centre is the largest of these, with around 4,000 sq m of retail floorspace. The town centre is the equivalent of a neighbourhood centre. Its key function is to provide food and groceries and other convenience items to the trade area. To this end, the town centre has a supermarket of 1,450 sq m, which is rather too small to provide a full range of food and groceries. 3. Total retail sales in the trade area were approximately $33 million in 2008, 81% of which were made in the town centre. 4. Resident spending on retail goods and services is estimated at $149 million in Retail escape spending, after accounting for spending by visitors, is estimated at $118 million, or 79% overall. This includes $46 million in food and grocery spending, or 69% of all spending in this category, which is relatively high. A neighbourhood centre would typically capture 30% to 40% of the retail spending of its trade area, including perhaps 50% of its spending on food and groceries. 5. The future retail development potential in Lara depends on population growth and growth in retail spending per person as well as investment to capture the existing shortfall in retail provision. 6. For this report, population is forecast to grow at an average of 1.8% per year over the period to 2021, with growth tailing off thereafter. This forecast is based loosely on the recent forecast by id consulting prepared for Council. By 2021, the population of the trade area is forecast to be 17,500, a growth of 3,600 from Growth in retail spending per person is forecast to be 1% per year, following long term trends. 8. As a result of these factors, the retail spending of trade area residents is forecast to grow by $67 million per year by 2021 compared with If the Lara trade area can capture a more normal 35% share of resident spending, and assuming that the share of sales contributed by visitors remains the same, then Lara could support a further 6,800 sq m of retail floorspace by Of this, 3,300 sq m would be in food and grocery retailing. This would be sufficient to allow development of a full line supermarket in Lara in addition to the existing supermarket. There is market demand for a full-line supermarket by 2011 if the existing supermarket were to expand, rather than construction of a new additional facility. 10. Presently, around 35% of activity floorspace in the Lara town centre is taken by non-retail activities. This is within the normal parameters for similar activity centres elsewhere in Victoria. For the purposes of this report, it is assumed that non-retail activity will continue to take 35% of all floorspace. As a result, the

27 24 growth in non-retail floorspace in Lara s activity centres is forecast to be 3,700 sq m by By 2021, Lara s activity centres are forecast to require an additional 10,500 sq m of commercial floorspace. This level of floorspace gives rise to a land requirement of approximately 2.7 ha to accommodate commercial functions in Lara s activity centres by This forecast broadly accords with the assessment in the Lara Town Centre Urban design Framework (UDF), which provides for an additional 8,200 sq m of space in the town centre proper (in Austin Park) and further activity space in the wider town centre precinct. The following table illustrates how the forecast space identified in this report could be allocated in accordance with the UDF. This allocation allows for the development of a new local activity centre that would be established to service the growing areas to the west of town. Notional allocation of floorspace to activity precincts, Lara, 2008 to 2021 Activity precinct Floorspace sq m % of total Lara town centre - Austin Park 8,200 78% Other town centre precinct 500 5% Station precinct 1,000 10% Patullos Road 200 2% New local activity centre 600 6% Total 10, % 13. The UDF proposes an extension of the Lara town centre onto adjacent parkland (Austin Park) to accommodate a new full-line supermarket and a variety of specialty shops and showrooms. The UDF suggests that the building housing the existing supermarket could be used to accommodate a mini-major or a small discount department store (such as a Country Target). However, the acquisition of Austin Park for commercial development is likely to take some time to organise (several years according to Council), and in the meantime, Lara residents have a less than optimal retail service. 14. The existing supermarket operator in the town centre is keen to expand. The owner of the site has proposed a plan to expand the supermarket to 3,500 sq m, which would provide a full-line service. This plan would require development on the adjacent roadway and realignment of the road in order to provide sufficient space for car-parking. This proposal is supportable by market demand. However, there is no market support for a second full-line supermarket and it would therefore remove a major attraction for any developer to undertake the Austin Park redevelopment proposed by the UDF. This could stymie expansion of the town centre for the long term. 15. A further option put forward by some stakeholders is for the development of a new supermarket-based centre in a different location in Lara. Such a centre could provide full-line supermarket facilities and a range of specialty shops in a neighbourhood activity centre. In market demand terms, such a development would be likely to remove the need for further development in the town centre. Even if this proposal were able to progress through the required planning scheme amendment process rapidly, and even if it were recommended for approval by a Panel, it would still take some years to come to fruition. The results of a new

28 25 neighbourhood centre would be to cripple further development of the town centre and to delay investment in higher order retail facilities beyond the larger supermarket. 16. There are good reasons why further significant retail development should take place at the Lara town centre in preference to any other centre serving the trade area: Reduction in trips for residents and more sustainable development outcomes Improved use of infrastructure and existing assets, both public and private Increased customer traffic at businesses Greater likelihood of investment in higher order retail activities Enhanced confidence that assets will retain their value The existing centre remains central to the township For these reasons the idea of the alternative supermarket-centre should be abandoned and the effort channelled into making the existing town centre work. Whether or not a full-line supermarket should be provided on the site of the existing supermarket or on Austin Park is a tactical development issue for Council.

29 26 References ABS, 2008, Regional Population Growth Australia, Canberra ABS, 2008a, Retail turnover by Industry, Canberra ABS, 2000, Retail Industry Australia, City of Greater Geelong, 2007, Jetty Road Urban Growth Plan, Geelong Department of Planning and Community Development Planning Schemes Online - DSE, 2004, Victoria in Future, Melbourne Essential Economics, 2006, Geelong Retail Strategy, for the City of Greater Geelong id consulting, 2008, forecast id web-based data prepared for the City of Greater Geelong MDS Market Data Systems, 2002, Market Info, Gold Coast