The Attraction of Perth and Peel Centres for Global Firms and Local Commuters. Kirsten Martinus, Thomas Sigler, Matthew Tonts and Sharyn Hickey

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1 The Attraction of Perth and Peel Centres for Global Firms and Local Commuters Kirsten Martinus, Thomas Sigler, Matthew Tonts and Sharyn Hickey Introduction Since the 1970s, successive strategic planning strategies have sought to decentralise economic activity and employment in the Perth metropolitan region. This was in part to mitigate commuting issues such as the daytime emptying of outer sub-regions and the unidirectional overcapacity use of freeways and the public transport system. Sub-regional activity centres were planned to create more decentralised land use patterns offering a range of retail, commercial and possibly advanced or specialised services attracting major employment opportunities in industries of specialisation. This unpacks the industry and employment attractiveness of these centres by examining the geographical distribution of economic activities at the Statistical Area Level 2 (SA2) spatial scale. This is shown in Figure 1. It compares two data sets. First, the headquarters and branch office locations of some of Australia s largest and most globally-oriented firms those listed on the Australian Securities Exchange (ASX). While it is recognised that this does not capture all firms, specifically nonlisted businesses, it nevertheless offers valuable insights into decision-making outcomes of Australia s largest enterprises. Second, commuter destinations are disaggregated by industry of employment from the Australian Bureau of Statistics (ABS) 2011 Census of Population and Housing. This provides insight into the strategic attraction of centres to a globally-oriented set of firms alongside local commuter patterns, highlighting their capacity to attract employment and industry opportunities away from Perth city s core. 1

2 Figure 1 Perth and Peel Activity Centres against SA2 boundaries 2

3 Strategic location of listed companies This section highlights the geographies of ASX listed firms that are both headquartered in Perth, as well as those that have major branch offices in the metropolitan region. In January 2014, 39 per cent of the firms listed on the ASX were headquartered in Perth and Peel, Sydney had 27 per cent, Melbourne 16 per cent and Brisbane 8 per cent. The relatively large proportion of firms listed in Perth is linked primarily to the energy and materials sector, which accounts for 30.5 per cent of all firms listed on the ASX. While Perth and Peel account for a large proportion of all listed firms, most are relatively small, falling in the small-cap to mid-cap corporate size range (Martinus and Sigler, 2016). Table 1 gives the largest 30 by market capitalisation, headquartered in Perth and Peel. While the composition of this list will vary regularly as a result of demergers, takeovers and new listings, it nevertheless provides a sense of the types of ASX firms that are headquartered in the Perth and Peel region. Figure 2a shows the spatial distribution and industry type of all listed firms headquartered in the Perth and Peel regions at the SA2 level. remains the dominant location for listed and headquartered companies in Western Australia, accounting for 411 or 58.1 per cent of 707 firms. These firms are concentrated mainly in three sectors: materials accounting for 66.5 per cent of its ASX offices, energy 18.5 per cent, and finance 4.1 per cent. Outside of, the Subiaco-Shenton Table 1 Top 30 ASX Perth headquartered companies, 2014 Company Industry Sector Company Industry Sector 1 Wesfarmers Food & Staples Retailing 16 Sundance Resources Materials 2 Woodside Petroleum Energy 17 Automotive Holdings Retailing Group 3 Fortescue Metals Group Materials 18 Paladin Energy Energy 4 Iluka Resources Materials 19 Silver Lake Resources Materials 5 Regis Resources Materials 20 CGA Mining* Materials 6 Monadelphous Group Capital Goods 21 Mount Gibson Iron Materials 7 Seven West Media Media 22 Medusa Mining Materials 8 Mineral Resources Commercial & Professional Services 23 Ausdrill Capital Goods 9 Navitas Consumer Services 24 Perseus Mining Materials 10 Aurora Oil & Gas 1 * Energy 25 Mermaid Marine Australia Transportation 11 Atlas Iron Materials 26 Western Areas Materials 12 BWP Trust Real Estate 27 Clough* Capital Goods 13 Sandfire Resources Materials 28 Resolute Mining Materials 14 Aquila Resources* Energy 29 iinet Telecommunication Services 15 Independence Group Materials 30 Beadell Resources Materials Source: Martinus and Sigler (2016) * Denotes de-listed after

4 Park had the most headquarters with 116, 16.4 per cent of all headquartered firms. Of these, 80 were in the materials sector (69 per cent) and 24 in energy (20.7 per cent). Outside of Perth City and Subiaco-Shenton Park, the number of headquarters was typically low. Indeed, the next highest locations were Nedlands-Dalkeith with 27 headquarters, South Perth- Kensington with 20 and Osborne Park with 16. What is evident is that the overall picture is one of a highly concentrated group of corporate headquarters. In many respects, this is not dissimilar to other major Australian cities, where the central business district remains the preferred locational option for most listed headquarters. While the distribution of headquarters provides one set of insights, the major branch offices of listed firms that are located in Perth and Peel also present a telling geography (see Figure 2b). These are firms that are headquartered elsewhere, but with major offices located in the Perth and Peel regions. Of the 180 major branch offices included in this study, 84 (46.7 per cent) were located in, followed again by Subiaco-Shenton Park with 17 (9.4 per cent). Overall however, branch offices tend to be more dispersed, with small concentrations evident in Malaga, Nedlands-Dalkeith, Welshpool and the Bibra Industrial area. When headquarters and branch offices are taken together, the inner metropolitan corridor between Fremantle, Perth Capital City to Perth Airport contains the majority of all ASX offices, at around 87 per cent. Most of these are in the materials sector (59 per cent) with some SA2s also specialising in sectors such as energy, around 17 per cent in SA2s with particular concentration in Fremantle, Como, South Perth or industrials, around 9 per cent in SA2s particularly in Belmont-Ascot- Redcliffe, Victoria Park-Lathlain- Burswood, Welshpool, Subiaco- Shenton Park. These SA2s form a central corridor of advanced services, industrial and logistics linking air and sea ports, as well as the rail terminus in Kewdale. The number of ASX headquarters and branch offices diminishes with increasing distance from. Nonetheless, their presence indicates emerging industries of competitive advantage for adjacent activity centres in attracting firms away from the core. The middle ring of SA2s around the metropolitan core is also home to a large number of industrials. For example, Canning Vale Commercial and Bibra Lake to the south are part of the industrials/energy corridor stretching to Henderson, Kwinana and Parmelia-Orelia. This area is characterised by major public and private infrastructure investments in heavy industry, including military operations and refineries like Alcoa and BP. Deep water port and ship building facilities denote a particular specialisation for Kwinana, based on the strategic advantage of its port and major industrial infrastructure like BHP Billiton and Alcoa. Industrials are strong in the activity centres in the north such as Balcatta- Hamersley and Osborne Park Industrial. This most likely reflects the strong construction industry which has grown out of the major growth and development of Northwest and Northeast sub regions. The continued concentration of ASX listed firms in Perth reflects a longstanding tendency for large firms to co-locate. There are a number of reasons for this (see Tonts and Taylor, 2010), including the concentration of strategic sources of information, the presence of self-reinforcing informal and formal knowledge networks, the presence of skilled and professional labour markets and transport systems that radiate from central business districts and reinforce centralisation. While decentralised activity centres provide lower cost land and in some cases better infrastructure, these seem to be outweighed by the ongoing advantages of doing business in the core. Perhaps equally important though is the degree to which historic concentrations of corporate activity tend to be selfreinforcing and characterised by inertia when it comes to location. 4

5 Figure 2a Total headquarter office locations of ASX-listings at January 2014, activity centres are noted, size of circles relates to relative number of ASX offices Nedlands-DalkiethCrawley Subiaco-Shenton Park Source: Adapted from ASX (2014) 5

6 Figure 2b Total branch office locations of ASX-listings at January 2014, activity centres are noted, size of circles relates to relative number of ASX offices Subiaco-Shenton Park Source: Adapted from ASX (2014) 6

7 Commuting by industry of employment This section unpacks worker destination by major industry of employment sectors across all Perth and Peel SA2s. Figure 3 graphically illustrates the numbers of workers commuting to each SA2 by industry of employment, such that larger circles indicate more jobs. The top 60 SA2s by total workers in dominant SA industry of employment are listed in Table 2, identifying the industry sector which attracts the largest number of workers. The most striking feature is, firstly, the primacy of for commuters, particularly in the industries of professional, scientific and technical services (PSTS) and mining. There are also a significant number of workers in PSTS in the adjacent SA2 of Subiaco-Shenton Park. Secondly, there is an imbalance in employment distribution with larger industry clusters and job opportunities south of the Swan River compared to the north and east. This is likely to reflect the longer-term investment in manufacturing which is most highly concentrated in the SA2s making up the corridor between the sea and air ports, Henderson, Kwinana Industrial, Bibra Industrial, Canning Vale Commercial and Welshpool, with Madeley-Darch-Landsdale and Malaga being significant centres to the north. Health care and social assistance workers are employed mainly in the urban core SA2s of Fremantle, Nedlands-Dalkeith- Crawley, Subiaco-Shenton Park and Wembley-West-Leederville- Glendalough; and Joondalup in the north. This is most likely the result of the close proximity of hospitals and other specialist health and community services, as well as education, and research and development facilities like UWA-QEII and ECU. The strategic activity centres of Joondalup, Midland-Guildford, Mandurah, Cannington and Morley, along with the outer metropolitan light industrial area of Madeley-Darch-Landsdale are all high retail employment areas. Public administration and safety is clustered in Rockingham and South Perth- Kensington; transport, postal and warehousing at the Perth Airport and Forrestfield-Wattle Grove (rail terminus); education and training at Bentley-Wilson- St James (Curtin University); arts and recreation services at Victoria-Lathlain-Burswood (Crown Perth). Table 3 identifies the top 60 SA2s by total number of workers disaggregated by industry of employment. This provides an understanding of the evenness of the distribution of workers by industry of employment across Perth and Peel, as well as where the majority of workers by industry sector are found. Not surprisingly, is well-represented along with other SA2s in the inner metropolitan area. Retail trade is strong in many of the middle to outer metropolitan strategic activity centres, such as Rockingham, Joondalup and Midland-Guildford, with some demonstrating specialisation in other industries. Health care and social assistance, and education and training in Joondalup; and public administration and safety in Midland-Guildford. 7

8 Figure 3 SA2 commuting by industry of employment on LGA map, 2011 (size of circles denotes number of jobs) Source: Adapted from ABS (2011) 8

9 Table 2 Number of workers in each SA2 dominant industry of employment, top 60 SA2s, 2011 SA2 Industry of Employment Total workers in industry Nedlands-Dalkeith- Crawley Subiaco-Shenton Park Source: Adapted from ABS (2011) Professional, Scientific and Technical Services SA2 Industry of Employment Total workers in industry 29,110 Belmont-Ascot- Redcliffe 7,619 Forrestfield- Wattle Grove Wholesale Trade 1,533 Transport, Postal and 1,510 6,183 Melville Retail Trade 1,502 Malaga Manufacturing 4,924 Hillarys Retail Trade 1,477 Welshpool Manufacturing 4,868 Mount Lawley- 1,472 Inglewood Perth Airport Transport, Postal and 4,616 Pinjarra Manufacturing 1,444 Bentley-Wilson-St James Education and Training 4,263 O Connor Manufacturing 1,439 Fremantle 4,152 Claremont Retail Trade 1,357 Wembley- West Leederville- Glendalough Canning Vale Commercial Madeley-Darch- Landsdale 3,953 South Perth- Kensington Manufacturing 3,764 Mount Hawthorn- Leederville Public Administration and Safety Electricity, Gas, Water and Waste Services 1,344 1,267 Manufacturing 3,670 Innaloo-Doubleview Retail Trade 1,198 Kwinana Industrial Manufacturing 3,525 Mount Nasura-Mount Richon-Bedfordale Osborne Park Industrial Construction 3,261 Armadale-Wungong- Brookdale Joondalup-Edgewater Rockingham Public Administration and Safety Midland-Guildford Retail Trade 2,658 Rivervale-Kewdale- Cloverdale Victoria Park-Lathlain- Burswood Cannington- Queens Park Arts and Recreation Services 1,197 Retail Trade ,146 Cooloongup 1,084 2,886 Dianella Retail Trade 1,035 2,543 Hazelmere- South Guildford Retail Trade 1,006 Transport, Postal and Retail Trade 2,348 Greenfields Bibra Industrial Manufacturing 2,326 Stirling-Osborne Park 960 Henderson Manufacturing 2,188 Wembley Downs- Education and Training 935 Churchlands- Woodlands Morley Retail Trade 2,187 Mosman Park- Peppermint Grove Education and Training 888 Kewdale Commercial Manufacturing 2,031 Yokine-Coolbinia- Menora Mandurah Retail Trade 2,008 Middle Swan-Herne Hill 881 Murdoch-Kardinya 1,994 Balga-Mirrabooka Education and Training 864 Booragoon Retail Trade 1,953 Willetton Retail Trade 843 Bassendean-Eden Hill- Manufacturing 1,808 Thornlie Education and Training 822 Ashfield Balcatta-Hamersley Manufacturing 1,686 Swanbourne- Education and Training 799 Mount Claremont Bayswater-Embleton- Bedford Manufacturing 1,685 Clarkson Retail Trade 792 Maddington-Orange Grove-Martin Karrinyup-Gwelup- Carine Manufacturing 1588 Duncraig 769 Retail Trade 1,565 Fremantle-South Education and Training

10 Table 3 Top 60 SA2s by total number of workers by industry of employment, 2011 SA2 Industry of Employment Total workers in industry Professional, Scientific and Technical Services Public Administration and Safety SA2 Industry of Employment Total workers in industry 29,110 Other Services 2,765 19,188 Midland-Guildford Retail Trade 2,658 Mining 14,063 Osborne Park Industrial Retail Trade 2,652 Financial and Insurance 12,736 Madeley-Darch- Construction 2,632 Services Landsdale 10,518 Welshpool Wholesale Trade 2,601 Nedlands-Dalkeith- Crawley Subiaco-Shenton Park Accommodation and Food Services Administrative and Support Services 7,619 Victoria Park-Lathlain- Burswood Arts and Recreation Services 2,543 7,082 Rental, Hiring and Real 2,493 Estate Services 6,183 Joondalup-Edgewater Education and Training 2,469 5,870 Midland-Guildford Public Administration and Safety Retail Trade 5,389 Cannington- Retail Trade 2,348 Queens Park Construction 5,270 Manufacturing 2,346 Malaga Manufacturing 4,924 Bibra Industrial Manufacturing 2,326 2,411 Welshpool Manufacturing 4,868 Transport, Postal and 2,308 Perth Airport Transport, Postal and 4,616 Malaga Construction 2,266 Bentley-Wilson-St James Education and Training 4,263 Osborne Park Industrial Manufacturing 2,191 Subiaco-Shenton Park Professional, Scientific 4,206 Henderson Manufacturing 2,188 and Technical Services Fremantle 4,152 Morley Retail Trade 2,187 Nedlands-Dalkeith- Crawley Education and Training 4,118 Rockingham Retail Trade 2,077 Wembley-West Leederville- Glendalough Canning Vale Commercial Madeley-Darch- Landsdale 3,953 Kewdale Commercial Manufacturing 2,031 Manufacturing 3,764 Electricity, Gas, Water 2,021 and Waste Services Manufacturing 3,670 Mandurah Retail Trade 2,008 Kwinana Industrial Manufacturing 3,525 Murdoch-Kardinya 1,994 Canning Vale Wholesale Trade 3,419 Murdoch-Kardinya Education and Training 1,983 Commercial Osborne Park Industrial Construction 3,261 Booragoon Retail Trade 1,953 Education and Training 3,216 Malaga Wholesale Trade 1,953 Joondalup-Edgewater 3,146 Osborne Park Industrial Wholesale Trade 1,953 Rockingham Welshpool Information Media and Telecommunications Public Administration and Safety Transport, Postal and 3,097 Bentley-Wilson-St James 1,933 2,886 Wholesale Trade 1,870 2,839 Fremantle Transport, Postal and Joondalup-Edgewater Retail Trade 2,765 Fremantle Accommodation and Food Services 1,850 1,834 Source: Adapted from ABS (2011) 10

11 Conclusion The Perth and Peel region has retained the relatively centralised metropolitan structure of its early economic and planning history. Unlike outer sub-regions, Perth City exhibits high industry and employment concentration, particularly in the services sector. While this has the advantage of simplifying transport linkages and supporting economies of agglomeration, its mass of firms increase at the expense of industry development in outer sub-regions. This may be in part why strategic planning attempts to decentralise economic activity have achieved only modest success. Industry clusters, by local commuting numbers or presence of multinationals, are associated with strategic locations of historic infrastructure investment and/or natural competitive advantage. An advanced services corridor stretching from westward through West Perth, Leederville, and Subiaco is home to many firms, particularly in mining, energy, and financials. The manufacturing corridor stretching from Kwinana to the Perth Airport is tied to logistical infrastructure such as Fremantle Port, the Jandakot Airport and adjacent industrial park, the Kewdale fright terminal, and the Perth Airport. Other activity centres such as Mandurah and Joondalup have well-developed retail and commercial sectors but few jobs in services. Nonetheless, the presence of ASX firms indicates emerging specialisation in industrial and materials respectively. Healthcare is strongly related to the presence of hospitals, specialised services and research and development facilities; while the clustering of construction to the north is most likely a reflection of the sustained growth and development of regions further north like Wanneroo and Swan in the east. This discusses the employment and industry characteristics across Perth and Peel, and how these might relate to its overall complex industrial framework. The high concentration of globally oriented firms within the inner metropolitan area points to the low industry competitiveness or strategic advantage of outer, and to some extent middle, metropolitan activity centres. Despite this, unique employment and industry configurations of activity centres as seen through the commuting patterns and presence of ASX offices reflect particular strategic advantages. It is critical that State and local plans leverage existing industry competitiveness or complementariness for greater future employment opportunities. Indeed, purely focusing on increasing job numbers may further exacerbate disparities in employment opportunities between inner and outer sub-regions. For this end, the application of blanket employment benchmarking measures, such as selfsufficiency, do little to promote nuanced understandings of sub-regional industry competitive advantages. They may instead hinder the development of knowledge-based and skilled employment opportunities in outer sub-regions, as local governments and developers focus on job short-term quantity rather than long-term quality. References Australian Bureau of Statistics (ABS) (2011) Census of Population and Housing. ABS, Canberra, Australia. Martinus, K. and Biermann, S. (2016) Commuting across Perth and Peel: Unpacking patterns Measures and Policy Implications. Bulletin 46, The University of Western Australia and the Committee for Perth, Perth. Martinus, K. and Sigler, T. (2016) Boomtown globalising: Perth as an international connected resource hub. In Biermann, S., Olaru, D. and Tonts, M. (eds.) Planning Boomtown and Beyond, (forthcoming), UWA Publishing, Crawley. Saudagaran, S. (1988) An empirical study of selected factors influencing the decision to list on foreign stock exchanges. Journal of International Business Studies, 19(1), Tonts, M. and Taylor, M. (2010) Corporate location, concentration and performance: large company headquarters in the Australian urban system. Urban Studies, 47(12),

12 About is a collaborative research project between the Committee for Perth and The University of Western Australia to benchmark the liveability of Perth and its global connectedness through an examination of Perth s economic, social, demographic and political character. The team of academics and researchers condense a plethora of existing information and databases on the major themes, map what is happening in Perth in pictures as well as words, and examine how Perth compares with, and connects to, other cities around the world. Copyright This paper is copyright of The University of Western Australia and the Committee for Perth. While we encourage its use, it should be referenced as: Martinus, K, Sigler, T, Tonts, M. and Hickey, S. (2016) The attraction of Perth and Peel centres for global firms and local commuters, Bulletin 47, The University of Western Australia and the Committee for Perth, Perth. About the authors Kirsten Martinus Matthew Tonts Thomas Sigler Sharyn Hickey Kirsten Martinus is an Assistant Professor at The University of Western Australia s School of Earth and Environment. Her research interests lie in urban and economic development, social capital formation, innovation and globalisation studies. The Committee for Perth is a member-funded organisation and we acknowledge Foundation partners: Thomas Sigler is a Lecturer in Human Geography in The University of Queensland s School of Geography, Planning and Environmental Management. His research interests lie at the intersection of urban studies and economic geography, with a strong focus on how globalisation impacts upon contemporary cities. Matthew Tonts is Professor of Geography at The University of Western Australia. His research interests span regional development, economic geography and urban studies. A complete list of current members is available at: Sharyn Hickey is a PhD Candidate at The University of Western Australia. Her research interest is within spatial geography in both coastal and urban settings. UniPrint