retail sustainability assessment

Retail Sustainability Assessment Whitfords Activity Centre

October 2014

Prepared for: Scentre Group

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TABLE OF CONTENTS

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014

Executive Summary ..................................................................................................................................... i

Introduction .................................................................................................................................................. 1

1 Centre Description .......................................................................................................................... 3

1.1 Regional Context ...............................................................................................................................3

1.2 Local Context .....................................................................................................................................3

1.3 Whitfords Composition and Layout....................................................................................................3

1.4 Current Development Application ......................................................................................................4

2 Market Analysis ............................................................................................................................... 7

2.1 Trade Area Definition .........................................................................................................................7

2.2 Population Trends........................................................................................................................... 10 2.2.1 North-West Sub-Region and Joondalup Municipality ..................................................................... 10 2.2.2 Main Trade Area ............................................................................................................................. 12 2.2.3 Socio-Economic Characteristics ..................................................................................................... 13

2.3 Retail Spending .............................................................................................................................. 18 2.3.1 Methodology and Definitions .......................................................................................................... 18 2.3.2 Retail Spending Per Capita Rates .................................................................................................. 18 2.3.3 Retail Spending Volume ................................................................................................................. 19

3 Retail Supply .................................................................................................................................. 21

3.1 Centres Policy ................................................................................................................................. 21 3.1.1 Joondalup Local Commercial Strategy ........................................................................................... 21

3.2 Centres Hierarchy ........................................................................................................................... 22

3.3 Strategic Metropolitan Centres ....................................................................................................... 26

3.4 Secondary Centres ......................................................................................................................... 26

3.5 District Centres ............................................................................................................................... 27

3.6 Local Centres .................................................................................................................................. 27

3.7 Proposed Developments ................................................................................................................ 28

4 Existing Centre Performance ....................................................................................................... 30

4.1 Turnover Performance .................................................................................................................... 30

4.2 Market Share Performance ............................................................................................................ 30

5 Market Demand and Turnover Potential ..................................................................................... 32

5.1 Future Retail Development ............................................................................................................. 32

5.2 Assumptions ................................................................................................................................... 32

5.3 Market Demand Assessment ......................................................................................................... 33

5.4 Turnover Potential Assessment ...................................................................................................... 34 5.4.1 Whitfords with Current DA (54,420 sq.m) ....................................................................................... 34 5.4.2 Whitfords With an Additional 20,580 sq.m (75,000 sq.m) .............................................................. 34 5.4.3 Whitfords With an Additional 2,500 sq.m (77,500 sq.m) ................................................................ 36

6 Impact Assessment ....................................................................................................................... 37

6.1 Centre Specific Impacts .................................................................................................................. 37

6.2 Expansion by 20,580 sq.m to 75,000 sq.m .................................................................................... 38

6.3 Expansion by 2,500 sq.m (to 77,500 sq.m) .................................................................................... 40

6.4 Sensitivity Testing ........................................................................................................................... 40

7 Community Benefits ...................................................................................................................... 41

URBIS

WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014

8 Conclusions .................................................................................................................................. 42

Disclaimer .................................................................................................................................................. 43

Appendix A PLUC 5 Categories

APPENDIX B Sensitivity Analysis

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 EXECUTIVE SUMMARY i

Executive Summary The main findings and conclusions in relation to the Retail Sustainability Assessment outlined in this report are as follows:

The Whitfords Activity Centre, by way of the Westfield Whitford City shopping centre, has been performing an important shopping function for residents of the middle and outer northern coastal suburbs of Perth since it opened in 1978. Whitfords Activity Centre serves as a key destination for both convenience and discretionary shopping needs.

Whitfords Activity Centre is strategically located at the intersection of two main arterial roads, namely Marmion Avenue and Whitfords Avenue. This high profile location enables the centre to be easily accessible from the existing and developing northern coastal suburbs of Perth. The centre is well served by the suburban bus network, with several routes linking with the Whitfords railway station.

The retail facilities within the Whitfords Activity Centre draw trade from throughout the North West Sub-Region of Perth and beyond this area, notably the immediate suburbs to the south. Based on exit survey information and key trade area definition parameters, the main trade area served by the Whitfords Activity Centre extends between 5 and 7 km from the centre. Reflecting the centre’s usage by consumers and the typical dispersed nature of shopping patterns, some 25% of retail turnover at Whitfords Activity Centre is sourced from markets outside the main trade area. This is and will continue to be an important market in support of retail facilities at the Whitfords Activity Centre.

As of June 2013, the main trade area of the Whitfords Activity Centre contained approximately 151,280 people. Over the period to 2031, the main trade area population is forecast to increase to 174,700 people. In the North West Sub-Region of Perth, resident population is forecast to increase by approximately 158,020 between 2013 and 2031, to 504,120 by 2031.

Ongoing population growth and real growth in retail spending per capita will increase the size of the retail market available to Whitfords Activity Centre and other centres throughout the region. Within the main trade area, the retail spending market is forecast to increase by $152 million between 2014 and 2017 and $716 million between 2014 and 2031 (or $51 million per annum). Retail spending by residents in the study area (main trade area and balance of the North West Sub-Region) is forecast to increase by about $3.4 billion (or $197 million per annum) to 2031 (all expressed in constant $2014 excluding GST). This growth in retail spending will increase demand and market capacity for more retail floorspace at Whitfords and other centres in the region.

Joondalup serves as the Strategic Metropolitan Centre for the middle to outer northern coastal region of Perth. There is also several Secondary Centres in the general area, including Wanneroo, Clarkson and Warwick. These centres are smaller in scale and do not have as prominent a retail role as the Whitfords centre. Within and on the border of Whitfords’ main trade area there are five District Centres which complement Whitfords as one of the highest order centres in the area. The assessment allows for new retail development at several centres including Joondalup; Clarkson, Madeley and Currambine Central.

Whitfords is a popular centre and trades well with an average retail turnover productivity around 20% higher than comparable centre benchmarks. The centre’s market share however is low at 13.2% of main trade area retail spending. This premium trading performance but low market share indicates there is market capacity for a broader range of retailing at the Whitfords centre.

The market demand in support of the proposed expansion of Whitfords Activity Centre is as follows:

For at least the past 10 years, the growth in market demand has significantly outpaced the increase in supply of PLUC 5 shop floorspace in Whitfords’ main trade area and the wider North-West Sub-Region of Perth. The amount of PLUC 5 shop floorspace provided in these areas does not adequately meet the needs of the market.

The outcome is currently abnormally high levels of turnover productivity at most higher order shopping centres in the region and an undesirable level of expenditure escaping the main trade area and wider North-West Sub-Region. The potential benefits that could be realised through greater levels of retail activity at Whitfords and other activity centres in the region are being lost.

ii EXECUTIVE SUMMARY URBIS


Population growth and in turn PLUC 5 shop floorspace demand growth has increased substantially in recent years in the Whitfords main trade area. The continual regeneration and gentrification of existing households coupled with ongoing population and retail spending growth will drive demand for more floorspace and an improved range and quality of shops, services and built form environments.

The scale and mix of uses proposed for Whitfords Activity Centre is supportable by market demand. The market shares required to support the proposed expansion of PLUC 5 shop floorspace at Whitfords is within benchmarks for a department store anchored centre. Whitfords therefore will capture its fair share of the market for a Secondary Centre while leaving sufficient market demand to support the intended role of the centres in the surrounding hierarchy.

Except for a small format supermarket, the Whitfords expansion is not adding anchors that would be required to support the expansion of lower order neighbourhood and District Centres (e.g. DDSs and supermarkets). The Whitford expansion is adding mostly F&B and discretionary retail uses which are under-provided in the region generally and the main trade area.

There is a need for significant improvements to the Whitfords Activity Centre to bring it in-line with the expectations of consumers today (who are seeking an enhanced experience through an improved retail offer, amenities and environments) and deliver a more vibrant and diverse town centre for the community. Retail expansion is a critical component in delivering the required improvements.

Currently the Whitfords Activity Centre provides 49,847 sq.m of PLUC 5 shop floorspace. Including the current DA, which would add 4,573 sq.m, the Whitfords Activity Centre would have approximately 54,420 sq.m of PLUC 5 shop floorspace by 2015.

The Whitfords Activity Centre Structure Plan contemplates an additional 23,080 sq.m of PLUC 5 shop floorspace which would increase PLUC 5 shop floorspace to 77,500 sq.m. This additional floorspace has a sunset date of 2026 with:

An additional 20,580 sq.m by 2017 as part of a major redevelopment of the Westfield property. PLUC 5 shop floorspace would increase to 75,000 sq.m.

An additional 2,500 sq.m between 2018 and 2020, provided in the Endeavour Road and Banks precincts. PLUC 5 shop floorspace would increase to 77,500 sq.m.

The turnover potential of the additional PLUC 5 shop floorspace is as follows:

An additional 20,580 sq.m in 2017 would have the potential to achieve retail turnover of approximately $120 million. This turnover increase would require capturing a 3.8% market share of Whitfords’ main trade area market. Overall, with 75,000 sq.m, Whtifords’ would have the potential to achieve a retail turnover of $516 million in 2017, representing a 18% market share across the main trade area. Other centres in the region would still have access to 82% of the available main trade area market. The market share captured by Whitfords is within the range of similar types of centres, highlighting a sustainable position for the Whitfords centre and the broader centre hierarchy.

An additional 2,500 sq.m by 2020 would have the potential to achieve a retail turnover of $19 million and capture a 0.7% market share of main trade area retail expenditure. This is a minor additional market share that can be easily supported by market demand.

Detailed impact modelling has been undertaken to determine the potential impact of the proposed expansion of PLUC 5 shop floorspace at Whitfords Activity Centre. Centre specific impacts are assessed using a ‘turnover allocation approach’ which estimates the extent to which turnover at one centre will be diverted to another centre based on the estimated usage of centres.

This modelling indicates that the expansion of PLUC 5 shop floorspace to 77,500 sq.m at Whitfords Activity Centre would not have an adverse impact on any one centre in the region. The impact on any one centre is manageable and the proposed expansion of floorspace at Whitfords would not compromise the role, function and viability of other activity centres.

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 EXECUTIVE SUMMARY iii

Key findings from the impact analysis are as follows:

In terms of expansion to 75,000 sq.m, the one-off impacts on individual centres ranging from -0.3% to -4.2% are well within an acceptable range and substantially less than 10%, which is the notional benchmark for when impacts may be an issue.

The effect of market growth and resulting turnover productivity levels are the most relevant considerations when assessing trading impacts. The resulting trading levels for most centres are expected to remain above industry averages and therefore remain at sustainable levels.

The addition of 2,500 sq.m and expansion to 77,500 sq.m would have negligible impacts on other centres.

The level of impacts and share of the market captured by the proposed expansion of Whitfords would not impede the potential for other centres to expand or new centres to be developed.

In terms of the Joondalup Activity Centre this centre’s primacy in the centre hierarchy will be preserved given:

The Joondalup activity centre will continue to maintain its role as the highest order retail destination in the Joondalup municipality. In 2017, the Joondalup city centre has the potential to achieve a retail turnover volume of approximately $747 million, around $230 million higher than Whitfords, making Joondalup easily the largest and highest turnover volume retail centre in the hierarchy.

The proposed expansion of Whitfords would not impact the important unique non-retail functions and uses of the Joondalup Activity Centre which support its highest order role in the area. In addition to retail, the Joondalup Activity Centre is the focus for commercial, educational and community activity for the region (e.g. Edith Cowan University and health campus, Joondalup Council municipal offices, as well as other office uses and services).

Strong market growth will support the ongoing retail expansion of Joondalup Activity Centre as well as development of non-retail uses.

Given the level of impacts would not result in adverse outcomes at any one centre, the proposed expansion of Whitfords is also not threatening planning policy and the existing and planned centre hierarchy. Rather the development will:

Improve a shopping centre for the benefit of the community. This is place where people meet and socialise and is an important piece of infrastructure for the community.

Improve the public realm for the benefit of the local community.

Expand the range and improving the accessibility of retail facilities and services.

Increase the opportunity for linked trips through a more diverse range of retail and services in one location, which can have social and environmental benefits.

Provide more jobs and employment opportunities.

Inject significant investment into the local and broader regional economies.

Strengthen the competitive landscape which can:

bring greater levels innovation, choice and better prices; and

be a catalyst for more investment as other businesses look to co-locate and access the increased number of shoppers/visitors to the Whitfords centre and affected centres respond to the new competition.

In conclusion, the proposed expansion of the Whitfords Activity Centre to 77,500 sq.m is supportable by market demand and will not impact the role and viability of other centres in the hierarchy and the community will benefit from enhanced access to retail goods and services over time. A sustainable centre hierarchy will be preserved and enhanced through a broader range of shops and services.

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 INTRODUCTION 1

Introduction

REPORT OBJECTIVE The Scentre Group has commissioned Urbis to prepare a Retail Sustainability Assessment (RSA) for inclusion in the Whitfords Activity Centre Structure PLan as required under Section 6.5 – Retail Sustainability Assessments of the State Planning Policy 4.2 (SPP 4.2) – Activity Centres for Perth and Peel.

The objective of this RSA is to estimate market demand and resulting impacts of an assumed increase in PLUC 5 shop floorspace at Whitfords Activity Centre and to ultimately determine whether the sustainability of the centre hierarchy is preserved. The RSA assumes a maximum PLUC 5 shop floorspace of 77,500 sq.m is provided at Whitfords Activity Centre, with the additional floorspace being delivered by means of a single development application or multiple development applications.

RETAIL SUSTAINABILITY ASSESSMENT The Activity Centres Policy states that a Retail Sustainability Assessment is required for a ‘major development and scheme amendment or structure plan that provides for a Major Development’ which is defined as “Development of any building or extension/s to an existing building where the building or extensions are used or proposed to be used for shop-retail purposes and where the shop-retail nla of the:

proposed building is more than 10,000 sq.m; or

extension/s is more than 5,000 sq.m.”

As described in the Activity Centres Policy, “A Retail Sustainability Assessment (RSA) assesses the potential economic and related effects of a significant retail expansion on the network of activity centres in a locality. It addresses such effects from a local community access or benefit perspective, and is limited to considering potential loss of services, and any associated detriment caused by a proposed development. Competition between existing businesses of itself is not considered a relevant planning consideration.”

WHITFORDS DESIGNATION

The Westfield Whitford City shopping centre accounts for more than two-thirds of PLUC floorspace in the Whitfords Activity Centre which currently provides a total of 77,300 sq.m of leasable floorspace. PLUC 5 shop floorsapace amounts to 49,847 sq.m.

Whitfords Activity Centre is classified as a Secondary Centre within SPP 4.2, which was gazetted on 31 August 2010. Under the SPP 4.2, Secondary Centres are intended to “perform an important role in the city’s economy, and provide essential services to their catchments”. In terms of retail, they can include department stores, discount department stores, supermarkets and specialty shops. In this regard, Secondary Centres are expected to serve a higher order retail role in the centres hierarchy and be a key destination for both discretionary and convenience based shopping needs. The main trade area population for Secondary Centres is designated as up to 150,000 persons, however the policy does recognise that this parameter is indicative and will vary between centres.

FUTURE DEVELOPMENT The development proposal involves the addition of 23,080 sq.m of PLUC 5 shop floorspace within the Whitfords Activity Centre, post the current Development Application which is adding around 4,573 sq.m. Under the development proposal, Whitfords Activity Centre’s PLUC 5 shop floorspace would increase from around 54,420 sq.m to 77,500 sq.m.

A minimum 2,000 sq.m of the additional 23,080 sq.m of PLUC 5 shop floorspace will be provided in the Endeavour Road precinct and/or Banks precinct within the Whitfords Activity Centre.

2 INTRODUCTION URBIS


The additional PLUC 5 shop floorspace has a sunset date of 2026, however the intention is for 20,580 sq.m of the floorspace to be added to the Whitfords Activity Centre by 2017. The balance (or 2,500 sq.m) of PLUC 5 floorspace would be added over the 2018-2020 timeframe.

The RSA outlined in this report addresses the following:

1. The market demand and turnover potential for the proposed additional PLUC 5 shop floorspace at Whitfords Activity Centre.

2. The impact of expansion of PLUC 5 shop floorspace at Whitfords Activity Centre on the existing and planned centres hierarchy.

3. The community benefits that would be realised from the development proposal.

REPORT OUTLINE The report has eight sections as follows:

Section 1 discusses the local and regional context of Whitfords Activity Centre, including the Whitford City shopping centre, the centre’s current composition and the key features of the additional PLUC 5 shop floorspace.

Section 2 presents an analysis of the trade area market, including forecast population growth, retail spending by residents and the socio-economic profile of residents.

Section 3 outlines an overview of the retail supply in the region of relevance to the Whitfords Activity Centre.

Section 4 outlines a summary of the current performance of Whitford City.

Section 5 outlines an assessment of the market demand and turnover potential of the proposed PLUC 5 shop floorspace at Whitfords Activity Centre.

Section 6 outlines the potential trading impacts from additional PLUC 5 shop floorspace at Whitfords Activity Centre.

Section 7 outlines the potential range of community benefits that could be realised from the expansion of PLUC 5 shop floorspace at Whitfords.

Section 8 outlines the key conclusions of the Retail Sustainability Assessment.

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 CENTRE DESCRIPTION 3

1 Centre Description

1.1 REGIONAL CONTEXT As shown in Map 1.1, Whitfords Activity Centre is located within the municipality of Joondalup, approximately 20 km from the Perth Central Business District (CBD). The centre is located within the North-West Sub-Region of Perth as specified within Directions 2031. Whitfords Activity Centre is classified as a Secondary Centre and is one of five of this type of centre in the North-West Sub-Region. Joondalup and Yanchep are designated as Strategic Metropolitan Centres in this Sub-Region of Perth.

Whitford City shopping centre, which comprises the majority of PLUC 5 floorspace within the activity centre, has been performing an important shopping function for residents of the middle and outer northern coastal suburbs of Perth since it opened in 1978. Over the past 35 years, the centre has undergone a number of expansions and refurbishments in response to growing and evolving market demand in the region. The last significant development of the centre was completed 10 years ago in 2004 which added new mini-majors and specialty shops.

1.2 LOCAL CONTEXT Whitfords Activity Centre is located at the south-western corner of the Marmion Road and Whitfords Avenue intersection, as shown in Map 1.2. This gives the centre a high profile and accessible location in the region.

Marmion Road is a major north-south arterial linking with the West Coast Highway and Stirling Highway in the south that provides access between the developing outer northern suburbs and established coastal suburbs of Perth. Whitfords Avenue connects with the Mitchell Freeway and Wanneroo Road in the east. The grid like main road network in the region facilitates access to the centre.

In terms of public transport, Whitfords Activity Centre is served by the Perth suburban public transport network, with at least three bus routes connecting Whitfords Train Station with the Whitfords Activity Centre.

Also within the Whitfords Activity Centre there is a range of bulky goods retailing, including a Bunnings store, commercial offices and community facilities, including medical suites. Whitford City shopping centre also includes a six screen cinema complex adding to the centre’s role as a leisure and entertainment destination in the region.

The area surrounding Whitfords is characterised by mainly detached housing in established suburbs. Some dwellings along the southern side of Banks Avenue are used for commercial purposes. The area is maturing and higher density development that is occurring throughout the region is attracting a different demographic to the mainly family based households prevalent today.

1.3 WHITFORDS COMPOSITION AND LAYOUT The Whitfords Activity Centre currently provides 77,700 sq.m of PLUC land uses, including 49,847 sq.m of PLUC 5 shop floorspace (refer to Table 1.1). All of this PLUC 5 shop floorspace is provided on the Scentre Group’s land holding, including shops within the main shopping centre and various freestanding uses in the balance of the activity centre.

The main shopping centre is anchored by Big W and Target discount department stores and Woolworths and Coles supermarkets. The centre also includes a range of mini-majors, including JB Hi Fi, Best & Less, Rebel Sport, City Beach, Kathmandu, Dick Smith, Lincraft, Chemist Warehouse and Terry White Chemist. The centre serves both convenience and discretionary shopping needs.

4 CENTRE DESCRIPTION URBIS


The shopping centre is a well maintained centre that is popular with the local community. However, reflecting the lack of significant improvements for over 10 years, the presentation of the centre is appearing dated and in need of renewal (both from ambience/environment and offer perspectives) to provide a shopping experience that aligns with the expectations of consumers today. The centre is essentially fully leased and trading well above industry benchmarks.

The centre is predominantly one level, with a small upper level. Undercroft and on-grade customer carparking are also provided.

The shopping centre is oriented in an east-west direction on the site bounded by Whitfords Avenue, Marmion Avenue, Banks Avenue and Endeavour Road. On the western side of Endeavour Road there are several retail and commercial uses, including a Bunnings Warehouse and Chipmunks play centre, as well as the St Mark’s Anglican Community school.

TABLE 1.1 – WHITFORDS ACTIVITY CENTRE PLUC FLOORSPACE, CURRENT

PLUC FLOORSPACE

PLUC 1 to 4 –Primary, Manufacturing, Storage and Service 150 sq.m

PLUC 5 – Shop 49,847 sq.m

PLUC 6 – Other Retail 8,500 sq.m

PLUC 7 - Office 6,000 sq.m

PLUC 8 to 11 – Other (Health, Entertainment, etc.) 13,203 sq.m

TOTAL 77,700 sq.m

Source: PLUS; Urbis

1.4 CURRENT DEVELOPMENT APPLICATION A small development application (DA) is currently before Joondalup Council for review. This DA proposes to add around 4,573 sq.m of PLUC 5 shop floorspace at Westfield Whitford City, bringing the Whitfords Activity Centre’s total PLUC 5 shop floorspace to approximately 54,400 sq.m.

The 54,400 sq.m of PLUC 5 shop floorspace provides the base upon which the proposed expansion of Whitfords Activity Centre to 77,500 sq.m is assessed in this RSA report (refer to Table 1.2). This addition of 4,573 sq.m of PLUC 5 shop floorspace is expected to be completed by 2015.

TABLE 1.2 – WHITFORDS ACTIVITY CENTRE PLUC FLOORSPACE, EXISTING AND CURRENT DA

PLUC EXISTING INCREMENTAL – CURRENT DA

POST CURRENT DA

PLUC 5 Shop 49,847 sq.m 4,573 sq.m 54,420 sq.m

Other Leasable Floorspace 27,853 sq.m 0 sq.m 27,853 sq.m

Total Leasable Floorspace 77,700 sq.m 4,573 sq.m 82,273 sq.m

Source: PLUS; Scentre Group; Urbis

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 CENTRE DESCRIPTION 5

REGIONAL CONTEXT MAP 1.1

6 CENTRE DESCRIPTION URBIS


LOCAL CONTEXT MAP 1.2

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 MARKET ANALYSIS 7

2 Market Analysis This section of the report outlines analysis of the market served by Whitfords Activity Centre.

2.1 TRADE AREA DEFINITION The main trade area for Whitfords Activity Centre is based on an exit survey conducted at the centre and recognition of other factors, such as the role of the Whitfords activity centre, the pattern of urban development, location of other activity centres, road and public transport infrastructure and any natural and physical barriers. This area reflects the future indicative service population (trade) area as defined in State Planning Policy 4.2, Activity Centres for Perth and Peel, which will be referred to as the main trade area in the remainder of this report.

As shown in Map 2.1, the Whitford City shopping centre attracts visitation from throughout the North-Western suburbs of Perth, with the majority of customers coming from within a 7 km radius of the centre. Whitford City also draws well from the northern coastal suburbs (extending to Butler), from areas to the south and east, reflecting the direct and convenient road access to the centre. Access to the centre from these areas is facilitated by Marmion Avenue and West Coast Drive in terms of north-south main road routes and Ocean Reef Road, Whitfords Avenue and Hepburn Avenue in terms of east-west main road routes. Residents around Lake Joondalup, Wanneroo, Warwick and Karrinyup also visit the centre for shopping purposes.

The dispersed nature of a centre’s draw is reflective of the unpredictable and irregular behaviour of shoppers. Shoppers use a variety of centres for a variety of reasons and will not always use the centre which is closest and most convenient to them. This behaviour is dictated by a range of reasons including people choosing to shop while at work, wanting to visit a particular retailer, the quality of the shopping environment, undertaking shopping while visiting friends or relatives or undertaking other activities, shopping while on holidays, etc.

For example, the results of the survey indicate that residents in the areas surrounding Joondalup utilise the centre for their shopping needs. These residents would mainly shop at Joondalup but for the reasons described above direct a share of their spending to Whitford City. As a result of this diverse shopping behaviour, the trade area for any one centre therefore does not represent the sole market that supports the scale of a centre.

Based on the exit survey information (and estimation of relative penetration rates) and key trade area definition parameters, the main trade area served by Whitfords is defined to include an area broadly extending between 5 km and 7 km from the centre. As shown in Map 2.2, the service trade area or in other words main trade area extends to Currambine in the north, Woodvale, Greenwood and Madeley in the east and Carine in the south. This area represents the core market that will be served by Whitfords following its proposed expansion. The Whitfords Activity Centre can be reached from almost all parts of the main trade area within 12 minutes, with shorter travel times from the south and north due to more direct road access. The main trade area currently contains around 150,000 people and accounts for the majority (75%) of visitors to the activity centre. The main trade area population is therefore consistent with the indicative guidelines as outlined in SPP 4.2.

The main trade area defined for Whitford City shopping centre is the most important market for the centre but not the only market that supports its role, scale and performance. This is a relevant consideration in the assessment of market support for additional PLUC 5 shop floorspace at Whitfords Activity Centre. In the case of Whitfords, our analysis indicates that approximately 25% of turnover is derived from outside the main trade area.

The shopping patterns of consumers also mean that trade areas for individual centres are not mutually exclusive. The overlapping of trade areas is common in all markets and is recognised in the activity centres policy.

For the purposes of the analysis in this report, the area of the North-West Sub-Region not covered by the main trade area for Whitfords Activity Centre has been divided into north and south sectors. These sectors together with the main trade area form a broader study area for the market demand and impact analysis.

8 MARKET ANALYSIS URBIS


WESTFIELD WHITFORD CITY CUSTOMER DISTRIBUTION MAP 2.1


MAIN TRADE AREA AND NORTH-WEST SUB-REGION MAP 2.2



2.2 POPULATION TRENDS The analysis of the current and forecast resident population in the region of relevance to Whitfords activity centre is based on a range of inputs including:

The results of the 2011 Census of Population and Housing released by the ABS.

The latest estimates of Estimated Resident Population (ERP) for SA1 (Statistical Area 1) and Local Government Areas (LGA) prepared by the ABS. These are available to 2013.

Projections prepared by Forecast Id for the City of Wanneroo Council and City of Joondalup Council.

The Western Australian Tomorrow Population Report No. 7, 2006-2026, released by the WAPC. We have used Band C (or medium) projections to inform resident population forecasts.

The masterplan proposed for the Whitfords activity centre which includes allowance for 400 dwellings to be developed.

2.2.1 NORTH-WEST SUB-REGION AND JOONDALUP MUNICIPALITY Table 2.1 below outlines population forecasts for the North-West Sub-Region and the Joondalup and Wanneroo LGAs based on the WAPC forecasts, rebased to take into account the latest 2013 ERP prepared by the ABS. Map 2.3 indicates the extent of both the Joondalup and Wanneroo Local Government Areas.

As of June 2013, the North-West Sub-Region resident population was 346,100, including 167,620 in Joondalup and 178,480 in Wanneroo. Of particular relevance to the Whitford Activity Centre, in recent years, population growth has accelerated strongly in the municipality of Joondalup and at a rate of 1.7% or 2,720 people per annum (2011-13), which compares with 0.7% or 1,120 people per annum from 2006 to 2011. There has now been three straight years of population growth in excess of 2,000 people per annum in the Joondalup municipality. Higher density development and regeneration of older established households would be driving this stronger rate of population growth. These trends are expected to continue to support good levels of population growth in the Joondalup municipality.

Based on official projections, the resident population of the North-West Sub-Region is forecast to grow to 374,720 people by 2016, and approximately 504,000 people in 2031. Over the period 2013-31, the resident population of the North West Sub-Region is therefore expected to increase by approximately 158,020 people or 47%.

As shown in Table 2.1 the majority of population growth in the North-West Sub-Region will be focussed in the Wanneroo LGA, driven mostly by new housing development in greenfield estates. Solid levels of population growth are expected to continue in the Joondalup municipality over the period to 2031, estimated at approximately 1,190 people per annum. This population growth will be driven by new residential development in greenfield areas as well as higher density infill development.

We note that the official projections were completed prior to the availability of the latest data from the ABS, which shows a significant acceleration of population growth in the Joondalup municipality in particular. The forecast growth indicated for the Joondalup municipality could be conservative and, on this basis, would be understating future population levels in this area. The future size of the market available to Whitfords Activity centre and other activity centres in the area therefore could be understated.


JOONDALUP AND WANNEROO MUNICIPALITIES MAP 2.3



North-West Sub-Region Population RESIDENT POPULATION BY MUNICIPALITY, AS AT JUNE TABLE 2.1

2.2.2 MAIN TRADE AREA As of June 2013, the main trade area of Whitfords had a resident population of 151,280 people, including 43,630 in the primary trade area. The population in the balance of the North-West Sub-Region not covered by Whitfords activity centre main trade area was 204,660 people. For clarity, the defined main trade area extends beyond the boundary of the North-West Sub-Region and includes a small area to the south of the area.

The main trade area is a reasonably well-established residential area but will continue to attract population growth on the back of higher density development including planned residential development within the Whitfords activity centre and the regeneration of older established households. These drivers are highlighted in recent growth figures which showed the main trade area population increasing by 2,807 people or 1.9% per annum from 2011 to 2013. This rate of growth was about twice the rate achieved from 2007 to 2011 (i.e. 1,366 people or 1.0% per annum). Nearly an extra 1,500 residents were added each year to the main trade area from 2011 to 2013 relative to the previous four year period. Refer to Table 2.2.

TABLE 2.2 – MAIN TRADE AREA ANNUAL POPULATION GROWTH

2007-11 2011-2013 2013-2031

Whitfords Main Trade Area 1,366 people (1.0%) 2,807 people (1.9%) 1,301 people (0.8%)

Source: ABS; Urbis

Resident population forecasts for the main trade area of Whitfords Activity Centre and broader study area are presented in Table 2.3.

By 2031, the main trade area population is forecast to be 174,700, including 49,570 people in the primary trade area. This represents population growth of around 1,300 people or 0.8% per annum between 2013 and 2031.

As noted earlier in Section 2.2.1, the official projections for the Joondalup municipality could be understating future growth in the area. As a large proportion of Whitfords’ main trade area incorporates the Joondalup municipality, the forecast growth in the main trade area could also be understated which would have implications for the expected future size of the retail market available to Whitfords and other activity centres.

Residents (No.) 2007 2013 2016 2021 2026 2031

Joondalup 157,220 167,620 172,240 178,540 185,040 189,040Wanneroo 125,840 178,480 202,480 239,880 278,580 315,080Total North-West Sub Region 283,060 346,100 374,720 418,420 463,620 504,120

Average Annual Growth (No.) 2007-2013 2013-2016 2016-2021 2021-2026 2026-2031

Joondalup 1,733 1,540 1,260 1,300 800Wanneroo 8,773 8,000 7,480 7,740 7,300Total North-West Sub Region 10,507 9,540 8,740 9,040 8,100

Average Annual Growth (%) 2007-2013 2013-2016 2016-2021 2021-2026 2026-2031

Joondalup 1.1% 0.9% 0.7% 0.7% 0.4%Wanneroo 6.0% 4.3% 3.4% 3.0% 2.5%Total North-West Sub Region 3.4% 2.7% 2.2% 2.1% 1.7%

Source : ABS; WAPC-Feb 2012 (LGA Only); Urbis

ForecastHistorical


2.2.3 SOCIO-ECONOMIC CHARACTERISTICS As indicated in Table 2.4, along with a range of other relevant socio-economic characteristics, the main trade area is an increasingly affluent area. Average per capita incomes are above the Perth average (+6%), with the highest incomes in the secondary south (+16%) sector.

From 2006 to 2011 average per capital incomes in primary and main trade areas have been rising slightly faster than in Perth overall. Incomes are highest to the south of the Whitfords activity centre (refer Map 2.4) towards Karrinyup and along the coast. Incomes are also slightly above average in the secondary east sector, around Woodvale. Extending inland to Joondalup and Wanneroo and to the north towards Yanchep incomes are significantly lower and below the Perth average.

Other key socio-economic features of the main trade area and broader study area are as follows:

The main trade area is well represented by families, with half of the population living in households with dependent children. Families account for 43% of the total Perth population.

A high 46% of households have a mortgage (which compares with a lower 36% for Perth as a whole). The proportion of households that have own their home outright in the main trade area, at 36%, is above the level in the remainder of the study area at 22%. There is a limited rental market in the main trade area at present.

A high proportion of European born residents are evident in the main trade area, 21% compared with the Perth average of 16% (notably from the United Kingdom in particular and South Africa).

The main trade area is an established suburban area characterised by families with good income levels who own or are in the process of paying off a mortgage. These socio- economic characteristics indicate the core market of the Whitfords activity centre is a socio-economically advantaged area, particularly when compared with the remainder of the study area including Joondalup. This demographic is consistent with the preferred market characteristics for David Jones stores and is one of the key reasons why David Jones is looking to establish a store at Whitford.

The socio-economic profile of residents of Whitfords’ main trade area support above average retail spending rates.



Resident Population WHITFORDS MAIN TRADE AREA AND STUDY AREA, 2007-2031 TABLE 2.3

2007 2013 2016 2021 2026 2031

2007-

13

2013-

16

2016-

21

2021-

26

2026-

31

2007-

13

2013-

16

2016-

21

2021-

26

Primary 40,980 43,630 44,790 46,490 48,250 49,570 442 387 340 352 264 1.0% 0.9% 0.7% 0.7%Secondary:North 19,450 20,190 20,660 21,160 21,680 22,040 123 157 100 104 72 0.6% 0.8% 0.5% 0.5%East 44,660 50,630 53,530 57,770 60,290 61,740 995 967 848 504 290 2.1% 1.9% 1.5% 0.9%South 25,850 26,990 27,640 28,520 29,560 30,120 190 217 176 208 112 0.7% 0.8% 0.6% 0.7%Far South 9,260 9,840 10,070 10,530 10,920 11,220 97 77 92 78 60 1.0% 0.8% 0.9% 0.7%Total Secondary 99,220 107,640 111,890 117,980 122,450 125,120 1,403 1,417 1,218 894 534 1.4% 1.3% 1.1% 0.7%

Main Trade Area 140,200 151,280 156,690 164,470 170,690 174,690 1,847 1,803 1,556 1,244 800 1.3% 1.2% 1.0% 0.7%

Balance of NW Sub-RegionNorth 44,630 67,420 78,220 95,050 116,720 141,180 3,798 3,600 3,366 4,334 4,892 7.1% 5.1% 4.0% 4.2%South 107,490 137,240 149,890 169,430 187,120 199,470 4,958 4,217 3,908 3,538 2,470 4.2% 3.0% 2.5% 2.0%Balance of NW Sub-Reg. 152,120 204,660 228,110 264,480 303,850 340,650 8,757 7,817 7,274 7,874 7,360 5.1% 3.7% 3.0% 2.8%

Total Study Area 292,320 355,940 384,790 428,950 474,540 515,340 10,603 9,617 8,832 9,118 8,160 3.3% 2.6% 2.2% 2.0%

1. As at JuneSource : ABS; WAPC-Feb 2012 (LGA Only); Urbis

Historical Population1 Forecast Population1 Annual Population Growth (no.) Annual Population Growth (%)


Socio-Economic Characteristics WHITFORDS MAIN TRADE AREA AND STUDY AREA, 2011 TABLE 2.4

North East South North South TotalHousehold Income

$Nil 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 2%

$1-$20,800 7% 7% 7% 6% 6% 7% 7% 8% 8% 7% 10% 10%

$20,800-$52,000 22% 21% 20% 19% 20% 21% 24% 22% 23% 22% 24% 25%

$52,000-$78,000 16% 16% 15% 13% 14% 15% 18% 16% 17% 16% 16% 17%

$78,000 - $130,000 24% 26% 27% 21% 24% 24% 26% 27% 27% 26% 22% 23%

$130,000-$208,000 25% 24% 26% 31% 27% 26% 20% 22% 21% 24% 21% 19%

$208,000 plus 6% 5% 5% 9% 6% 6% 3% 4% 4% 5% 5% 5%

Average Household Income $101,502 $100,281 $102,288 $116,137 $106,711 $105,183 $90,206 $94,456 $93,133 $98,615 $93,009 $89,341

Var'n from Perth Avg. +9% +8% +10% +25% +15% +13% -3% +2% +0% +6% 0% -4%

Average Household Size 2.6 2.7 2.7 2.7 2.7 2.7 2.8 2.9 2.9 2.8 2.5 2.6

Per Capita Income (Persons aged 15 - 64) (%)

$Neg/Nil 10% 10% 9% 9% 10% 10% 11% 11% 11% 10% 10% 11%

$1 - $20,800 19% 21% 20% 23% 20% 20% 21% 22% 22% 21% 21% 23%

$20,800 - $41,600 20% 20% 20% 20% 19% 19% 21% 21% 21% 20% 20% 22%

$41,600 - $78,000 29% 29% 29% 24% 28% 28% 28% 29% 29% 28% 28% 28%

$78,000 + 23% 20% 22% 25% 24% 24% 19% 17% 18% 20% 21% 17%

Avg. Per Cap. Income (aged 15-64) $54,156 $51,016 $52,462 $59,705 $54,638 $54,499 $48,282 $47,210 $47,539 $50,650 $51,288 $47,063

Var'n from Perth Avg. +6% -1% +2% +16% +7% +6% -6% -8% -7% -1% 0% -8%

Age Distribution

Aged 0-14 20% 19% 20% 18% 19% 19% 25% 23% 24% 22% 19% 19%

Aged 15-19 7% 8% 7% 7% 7% 7% 8% 8% 8% 8% 7% 6%

Aged 20-34 19% 20% 18% 15% 17% 18% 20% 21% 21% 20% 22% 22%

Aged 35-49 22% 22% 22% 21% 22% 22% 24% 23% 24% 23% 22% 22%

Aged 50-64 21% 22% 21% 24% 22% 22% 13% 16% 15% 18% 18% 18%

Aged 65-79 8% 8% 8% 11% 9% 9% 7% 7% 7% 8% 9% 9%

Aged 80+ 2% 2% 3% 3% 3% 3% 2% 2% 2% 2% 3% 4%

Average Age 36.7 36.7 37.6 39.6 38.1 37.7 32.8 33.9 33.5 35.3 36.9 37.2

Dependency Ratio1 30% 29% 31% 32% 31% 31% 34% 31% 32% 32% 32% 32%

1. Dependency rat io refers to the proport ion of the populat ion between 0-14 and over 65 years.

Source : ABS; Urbis

Total

Primary

Australia

Average

Total

Secondary

Main Trade

Area Study Area

Perth

Average

Balance of North-West RegionSecondary



Socio-Economic Characteristics WHITFORDS MAIN TRADE AREA AND STUDY AREA, 2011 TABLE 2.4 (CONT’D)

North East South North South TotalHousehold Composition (%)

Couples w ith no children 29% 28% 29% 30% 29% 29% 27% 25% 26% 27% 27% 26%

Family w ith children <15 30% 30% 31% 29% 30% 30% 40% 36% 38% 34% 28% 28%

Family w ith children >15 19% 21% 20% 21% 21% 20% 14% 18% 17% 18% 15% 17%

Total Family (with children) 48% 51% 51% 50% 51% 50% 54% 54% 54% 52% 43% 45%

Group Household 3% 3% 2% 2% 2% 2% 2% 3% 3% 3% 4% 5%

Lone Person 18% 17% 17% 17% 17% 17% 16% 16% 16% 17% 24% 23%

Other 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%

Housing Tenure1

Ow ner 34% 32% 34% 44% 37% 36% 17% 24% 22% 28% 30% 31%

Purchaser 46% 49% 50% 41% 47% 46% 52% 54% 53% 50% 41% 37%

Renter 20% 19% 15% 14% 15% 17% 29% 21% 23% 20% 28% 30%

Housing Costs

Loan Mortgage Repayments (monthly $) $2,155 $2,113 $2,097 $2,353 $2,177 $2,171 $2,260 $2,181 $2,205 $2,190 $2,173 $2,142

% Households in Mortgage Stress2 2% 2% 1% 1% 1% 1% 5% 5% 5% 3% 2% 3%

Rent Payments (w eekly $) $395 $385 $369 $411 $386 $390 $350 $342 $345 $362 $332 $345

% Households in Rental Stress2 3.4% 3.4% 2.3% 2.1% 2.4% 2.7% 8.8% 4.4% 5.8% 4.4% 6.5% 7.2%

% Households in Housing Stress 5% 5% 3% 3% 4% 4% 14% 9% 11% 8% 9% 10%

Labour Force

Labour Force Participation 73% 73% 73% 71% 72% 73% 70% 72% 71% 72% 69% 67%

% Unemployed 4% 4% 3% 3% 3% 4% 6% 5% 5% 4% 5% 5%

% Managers and Professionals 34% 31% 32% 44% 36% 35% 25% 27% 26% 31% 34% 37%

% Other White Collar 36% 37% 38% 35% 37% 37% 36% 37% 37% 37% 34% 35%

% Blue Collar Occupations 30% 32% 30% 21% 27% 28% 39% 36% 37% 33% 32% 28%

Birthplace

Australian Born 63% 56% 66% 68% 65% 64% 56% 56% 56% 60% 63% 68%

Overseas Born 37% 44% 34% 32% 35% 36% 44% 44% 44% 40% 37% 32%

• Asia 3% 4% 4% 3% 4% 4% 3% 7% 6% 5% 9% 11%

• Europe 22% 27% 20% 18% 20% 21% 27% 22% 24% 22% 16% 11%

• Other 12% 13% 10% 8% 11% 11% 14% 14% 14% 13% 12% 11%

1. 'Other' Tenure Types have not been inc luded.2. The Affordable Housing Taskforce (established by the ACT Government) has defined people as having difficulty in accessing affordable housing if

they are in the lowest two quint iles (lowest 40%) of income distribut ion and pay 30% or more of their gross household income in housing costs. This group is referred to as being in housing stress.Source : ABS; Urbis

Total

Primary

Australia

Average

Total

Secondary

Main

Trade

Area

Study

Area

Perth

Average

Balance of North-West RegionSecondary


PER CAPITA INCOME, VARIATION FROM PERTH AVERAGE 2011 MAP 2.4



2.3 RETAIL SPENDING

2.3.1 METHODOLOGY AND DEFINITIONS The retail spending market has been estimated using MarketInfo, a micro-simulation model developed by MDS Market Data Systems Pty Ltd. This model is based on information from the ABS’ Household Expenditure Survey (HES), the Census of Population and Housing (2011) and other information sources that provide up-to-date information on changes in spending behaviour and/or income levels (e.g. Australian National Accounts, Australian Taxation Statistics, etc.). MarketInfo is used widely by stakeholders in the retail industry.

The model uses micro-simulation techniques to combine propensity to spend on particular commodities with the socio-economic characteristics of individuals to derive spending per capita estimates on a small area basis (i.e. the Statistical Area One level).

The retail expenditure estimates throughout the report exclude the component of turnover attributable to goods and services tax, and that all values are expressed in financial years in constant 2014 dollar terms (i.e. inflation is not included).

The retail spending estimates outlined in this report represent the categories of retail goods and services which are served by retailers within the PLUC 5 definition. A summary of the types of retail expenditure within the PLUC 5 retail definition is provided in Table A.1 in Appendix A. Throughout this report PLUC 5 retail expenditure is referred to as retail expenditure or spending.

2.3.2 RETAIL SPENDING PER CAPITA RATES Chart 2.1 outlines estimates of retail spending per capita levels for residents of the main trade area and broader study area. Consistent with above average income levels, retail spend per capita in the main trade area for Whitfords activity centre is 6% higher than the Perth average. Spending levels are strong in both the primary (+5%) and secondary sectors (+5%). Significantly lower spending rates in the balance of the North-West Sub-Region result in the study area overall having a lower retail spending rate similar to the Perth average.

Spending levels in the main trade area are high in the discretionary spending categories, as shown in Chart 2.2. Across the main trade area, for example, spending on retail services is 12% above the Perth average and apparel spending +9%.

Retail Spending Per Capita WHITFORDS STUDY AREA VS PERTH AVG, 2014 ($2014, EX GST) CHART 2.1

Source : ABS; Australian National Accounts: National Income, Expenditure and Produc t Accounts (5206.0) MDS MarketInfo; Urbis

+5% +5% +5%

-7%

-2%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

PTA STA MTA Bal. NWSub-Reg.

StudyArea

Variation from Perth Average (%)13,356 13,355 13,356

11,880

12,502

11,000

11,500

12,000

12,500

13,000

13,500

PTA STA MTA Bal. NWSub-Reg.

Study Area

Retail Spend Per Capita ($)


Retail Spending Per Capita by Product Group WHITFORDS MAIN TRADE AREA, 2014 CHART 2.2

2.3.3 RETAIL SPENDING VOLUME The retail spending market generated by Whitfords’ main trade area and the broader study area residents is presented in Table 2.5. The main trade area retail market is currently estimated at almost $2.0 billion, including $585 million in the primary trade area (excluding GST) in the year to June 2014. Throughout the balance of the North-West Sub-Region (Study Area) retail spending amounts to around $2.5 billion.

The main trade area of the Whitfords activity centre accounts for 45% of total retail spending in the study area ($2.0 billion of $4.5 billion).

Forecast growth in retail spending is estimated by combining forecast population growth with anticipated growth in real retail spending capita. The assumptions relating to these contributors to spending growth are as follows:

Population growth, i.e. 0.8% per annum in the main trade area and 2.9% per annum across the balance of the study area to 2031.

Real retail spending per capita growth, i.e. 1.3% per annum including varying rates for different categories of retail. The application of 1.3% per annum could be considered conservative, given the following:

As shown in Chart 2.3, retail spending per capita in Western Australia has grown by an average of 1.5% per annum over the past 20 years but a higher 2.3% per annum over the past 10 years. The 1.4% per annum growth rate used by Urbis is 6% less than the WA average over the past 20 years and 40% lower than the average for Western Australia over the more recent 10 year period.

Census results show that, over the past 20 years the average income per capita in Whitfords’ main trade area has grown at a slightly higher rate to that of Western Australia as a whole, i.e. an average of 5.4% per annum compared with 5.3% per annum respectively.

The main trade area, and particularly the eastern half of the primary trade area, will continue to attract higher income households (with stronger spending rates) as, for example, some traditionally lower income suburbs continue to gentrify.

As income growth is a key determinant of spending growth the 1.3% per annum rate applied by Urbis to the future growth of the spending market is low relative to historical trends. With a continuing expectation for solid economic growth for Western Australia and Perth and the attraction of new higher income households to the main trade area, the use of the 1.3% per annum rate could potentially understate the future growth in the retail spending and in turn demand for retail floorspace in the main trade area over the forecast period, especially in the short term (i.e. 2014-2017). This should be borne in mind when considering the future shop floorspace needs of main trade area residents and the broader North-West region of Perth.

Source : ABS; MarketInfo 2012; Urbis

+3%+3%

+9%

+4%+5%

+7%

+12%

+3%

+7%

+5%

FoodRetail

FoodCatering

Apparel Homewares BulkyGoods

Leisure/General

RetailServices

Food Non-Food Total Retail

Varia

tion

from

Per

th

Aver

age



Over the next 17 years to 2031, retail spending generated by main trade area residents is forecast to increase by approximately $0.9 billion to $2.9 billion ($2014 excluding GST). In the balance of the North-West Sub-Region retail spending is forecast to increase by 100% to $5 billion by 2031. By 2031, retail spending generated by study area (main trade area and balance of North West Sub-Region) residents is expected to be about $7.9 billion ($2014, excluding GST).

Real Retail Spending Per Capita Growth WESTERN AUSTRALIA CHART 2.3

Retail Spending Market, $Million (Excluding GST) WHITFORDS MAIN TRADE AREA/NORTH WEST REGION STUDY AREA ($2014) TABLE 2.5

Source : Australian National Accounts ; Urbis

-6%

-4%

-2%

0%

2%

4%

6%

8%

1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

WAAUSWA Average

Primary

TA

Secondary

TA

Main

TA

Bal. NW

Reg.

Study

Area

2014 585 1,447 2,032 2,478 4,510

2017 624 1,560 2,184 2,858 5,042

2021 676 1,713 2,390 3,382 5,772

2026 749 1,900 2,649 4,144 6,794

2031 823 2,078 2,900 4,966 7,867

Average Annual Growth2014-17 2.1% 2.5% 2.4% 4.9% 3.8%

2017-21 2.0% 2.4% 2.3% 4.3% 3.4%

2021-26 2.1% 2.1% 2.1% 4.1% 3.3%

2026-31 1.9% 1.8% 1.8% 3.7% 3.0%Source : Urbis

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 RETAIL SUPPLY 21

3 Retail Supply This section of the report outlines a review of the existing and future supply of retail centres in the region of relevance to Whitfords Activity Centre. The location of the activity centres throughout and south of the North-West Sub-Region is shown in Map 3.1, with detailed competition shown in Map 3.2.

3.1 CENTRES POLICY On the 31st of August 2010, the Western Australian State Government released State Planning Policy 4.2, Activity Centres for Perth and Peel. This document outlines the centres hierarchy across metropolitan Perth and covers seven types of activity centres as follows:

Perth Capital City

Primary Centres

Strategic Metropolitan Centres

Secondary Centres

Specialised Centres

District Centres

Neighbourhood Centres

The Activity Centres Policy outlines the requirements for the planning and development of new activity centres and the redevelopment and renewal of existing centres. In terms of the activity centres hierarchy, a number of provisions are specified to meet the Policy’s objectives:

“The responsible authority should not support activity centre structure plans or development proposals that are likely to undermine the established and planned activity centre hierarchy.

Activity centre structure plans and developments should be consistent with the centre’s classification in the hierarchy.

The responsible authority should consider the main role/function and typical characteristics for each centre type” as outlined in Table 3.1.

3.1.1 JOONDALUP LOCAL COMMERCIAL STRATEGY The final version of the Joondalup Local Commercial Strategy (JLCS) was released in 2013 by the City of Joondalup. The Strategy and its recommendations in terms of PLUC 5 shop floorspace thresholds at individual centres across the municipality was based on analysis and a report prepared by MGA Town Planners and Syme Marmion and Co as well as a peer review undertaken by RPS consultants. This analysis is provided in the Part A Background Research, Economic Analysis and Retail Needs Assessment which went through a number of versions during 2012 and 2013.

The purpose of the Local Commercial Strategy is to guide decision making in relation to commercial centres with respect to future rezoning applications, development applications, centre plans and amendments to existing structure plans. The document therefore plays a pivotal role in determining the future geography and extent of retail facilities in Joondalup.

Although SPP 4.2 did away with the specification of floorspace limits at activity centres, recognising the need to allow centres to evolve and respond to growing and changing market demand, the document designates maximum (or threshold) retail floorspace recommendations for each locality/centre in Joondalup to 2026. No floorspace limit was applied to the Joondalup Strategic Metropolitan Centre however the Whitford and Warwick Secondary Centres were designated limits of 75,000 sq.m and 50,000 sq.m respectively. PLUC 5 shop floorspace limits (thresholds) applied to other centres (District, Neighbourhood and Local Centres) in the municipality range from 200 sq.m to 15,000 sq.m.

22 RETAIL SUPPLY URBIS


In our view, the most appropriate approach in determining a proposed expansion of PLUC 5 floorspace at an activity centre is to consider whether the development is consistent with the intended role of the subject centre and would support the ongoing sustainability of the centres hierarchy through the means of a Retail Sustainability Assessment. If a development results in a centre functioning as per its classification in the centre hierarchy and impacts on affected centres can be absorbed without adverse outcomes then the proposed development would be appropriate and a positive addition to the market. Furthermore, a development that supports the sustainability of a centre hierarchy and expands the range of facilities and services in an area will have a range of benefits for the community.

The RSA prepared by Urbis for the proposed expansion of Whitfords Activity centre focusses on the key issues indicated above and other relevant factors in determining whether the sustainability of the centre hierarchy is preserved.

3.2 CENTRES HIERARCHY The retail centres hierarchy is guided by the state policy Activity Centres for Perth and Peel (August 2010), as well as the municipal Local Commercial Strategy (November 2009). The main role and function and indicative service (trade area) population for each group of activity centres is outlined in the State Policy and summarised in Table 3.1. Higher order centres located in the region of relevance to Whitfords Activity Centre is provided in Table 3.2.

In the North-West Sub-Region of Perth, there are (existing and planned):

Two Strategic Metropolitan Centres (Joondalup and Yanchep)

Five Secondary Centres (Whitfords, Wanneroo, Warwick, Clarkson and Alkimos)

Eleven District Centres (Currambine, Sorrento Quay, Woodvale, Greenwood Village, Madeley, Alexander, Girrawheen, Neerabup, Butler, Eglinton and Two Rocks).

Within the defined main trade area (service population trade area) for Whitfords Activity Centre, there are four District Centres (Woodvale, Madeley, Sorrento Quay and Greenwood Village). Other centres which would be expected to capture a significant amount of trade from the Whitfords main trade area include the Joondalup, Wanneroo, Warwick, Currambine and Girrawheen centres.

Other centres of competitive relevance, due to their relative proximity and role as Secondary Centres or Strategic Regional Centres include Clarkson, Stirling (Innaloo) and Karrinyup.

These are the range of centres most relevant in assessing market capacity for future development of PLUC 5 shop floorspace at Whitfords Activity Centre.

Estimates of retail floorspace and performance of other activity centres is based on a number of data sources including:

Perth Land Use Survey 2008 conducted by the Department of Planning, WAPC.

Australian Shopping Centre Database, prepared by the Property Council of Australia.

Big Guns 2014, Little Guns 2013 and Mini Guns 2013, prepared by the Shopping Centre News.


Centre Hierarchy SPP 4.2 ACTIVITY CENTRES HIERARCHY FOR PERTH AND PEEL TABLE 3.1 CENTRE TYPE MAIN ROLE/FUNCTION FUTURE INDICATIVE

SERVICE POPULATION (TRADE AREA)

Perth Capital City Perth Capital City is the largest of the activity centres, providing the most intensely concentrated development in the region. It has the greatest range of high order services and jobs, and the largest commercial component of any activity centre.

Greater Metropolitan Region

Primary Centres Identified in Directions 2031 but not specifically discussed in the final Activity Centres for Perth and Peel policy as no centre in Perth currently has been classified as a primary centre, although Rockingham and Joondalup have been mooted.

Primary centres should house major institutions and become the preferred location for investment in high order public and employment generating infrastructure outside the CBD. The concept of primary centres is somewhat similar to a ‘second CBD’ for Perth.

Not given; assumed to be 300,000 +


Strategic metropolitan centres are the main regional activity centres. They are multipurpose centres that provide a diversity of uses. These centres provide the full range of economic and community services necessary for the communities in their catchment.

150,000 -300,000

Secondary Centres

Secondary centres share similar characteristics with strategic metropolitan centres but serve smaller catchments and offer a more limited range of services, facilities and employment opportunities. They perform an important role in the city’s economy, and provide essential services to their catchments.

Up to 150,000

District Centres

District centres have a greater focus on servicing the daily and weekly needs of residents. Their relatively smaller scale catchment enables them to have a greater local community focus and provide services, facilities and job opportunities that reflect the particular needs of their catchments.

20,000-50,000

Neighbourhood Centres

Neighbourhood centres provide for daily and weekly household shopping needs, community facilities and a small range of other convenience services.

2,000-15,000

Source: SPP 4.2, Activity Centres for Perth and Peel, WA Government; Directions 2031, WA Government



ACTIVITY CENTRES MAP 3.1


RETAIL SUPPLY MAP 3.2



3.3 STRATEGIC METROPOLITAN CENTRES Strategic Metropolitan Centres of competitive relevance to Whitfords are as follows:

Joondalup. Joondalup is a multi-functional town centre incorporating major retail, commercial, leisure, residential and education uses, with major uses including a hospital, two university campuses, local government offices, a library, sporting facilities and Lakeside Joondalup shopping centre. Whilst retail is an important element of the centre, it is the wide range of commercial and community facilities that define the role of Joondalup as a Strategic Metropolitan Centre. Total PLUC uses are estimated to amount to 350,000 sq.m. Retailing in the town centre is mostly focussed within and around the Lakeside shopping centre with a mix of cafes, take away food shops and services dispersed throughout the town centre. Total PLUC 5 shop floorspace currently amounts to around 92,000 sq.m. The main trade area for Joondalup town centre would cover a broad area encompassing parts of the Westfield Whitford City main trade area.

According to the Big Guns Journal published by Shopping Centre News (SCN), the Lakeside Joondalup centre achieved a productivity level of $8,980 per sq.m in 2014 ($2014, including GST), ranking the centre 8th out of 82 centres of its type in Australia. The centre is therefore trading strongly and well above the industry average.

Stirling. Westfield Innaloo, located on the corner of Scarborough Beach Road and Ellen Stirling Boulevard, is a major retail destination for the northern suburbs of Perth. Total PLUC 5 shop floorspace for Stirling is around 58,000 sq.m. Westfield Innaloo is the focus of retail comprising around 34,000 sq.m including two discount department stores (Target and Kmart) and two supermarkets (Coles, Woolworths). The adjacent shopping centre includes a Supa IGA. According to SCN, Westfield Innaloo achieved a Moving Annual Turnover of $306.4 million in 2013.

3.4 SECONDARY CENTRES Secondary centres of competitive relevance to Whitfords are as follows:

Karrinyup provides around 50,000 sq.m of PLUC 5 shop floorspace and is anchored by two department stores (i.e. David Jones 9,400 sq.m and Myer 13,900 sq.m). Due to the inclusion of two department stores the Karrinyup centre would likely be drawing a significant amount of trade from residents living in the Whitfords centre’s main trade area and other parts of the North-West Sub-Region. Research indicates that Karrinyup is used regularly by residents from the main trade area. Based on 2014 Big Guns publication, Karrinyup’s trades strongly with an average turnover productivity of approximately $8,429 per sq.m ($2014, including GST), ranking it 12th of 82 centres of its type in Australia.

Wanneroo - This centre provides around 18,200 sq.m of PLUC 5 shop floorspace and is anchored by a Kmart DDS and Coles and IGA supermarkets. The centre achieved a Moving Annual Turnover of $121.8 million in 2013 (source: Little Guns 2013). The main trade area of Wanneroo would comprise the suburbs to the east of Lake Joondalup and have some overlap with the main trade area of the Whitfords activity centre.

Clarkson (Ocean Keys Shopping Centre) - Currently the northernmost Secondary Centre in the North-West Sub-Region, the activity centre overall provides approximately 28,000 sq.m of PLUC 5 floorspace. The centre is understood to trade well benefiting from access to relatively sizeable captive trade area and developing suburbs to its north. The Ocean Keys shopping centre provided approximately 20,000 sq.m of PLUC 5 shop floorspace and is anchored by a Kmart DDS as well as Coles and Woolworths supermarkets, prior to its recent expansion. As noted later in this section of the report, the expansion of the centre will increase PLUC 5 shop floorspace by around 14,000 sq.m, increasing the Clarkson centre provision to around 42,000 sq.m.

The centre is well positioned to serve local daily/weekly shopping requirements and some non-food discretionary shopping needs of its catchment population. Given the centre’s distance from Whitfords (12 km) and urban break around 2 km, the main trade areas of the Clarkson and Whitfords activity centres would not be expected to overlap. Based on data published in Little Guns 2012 (and prior to its recent expansion), Ocean Keys Shopping Centre traded strongly, at an approximate turnover productivity of $8,794 per sq.m ($2012, including GST), ranking it 10th of 97 centres of its type in Australia


Warwick is a Secondary Centre anchored by a Kmart DDS, Woolworths and Coles supermarkets and cinemas. The centre was redeveloped in 2003 to include Best and Less, a new fresh food precinct and new speciality stores, expanding the centre to approximately 25,600 sq.m of PLUC 5 retail floorspace. The Warwick centre has a well-established position in its local market which includes parts of the secondary east and south sectors of Whitfords’ main trade area. According the 2013 release of the Little Guns publication Warwick achieves an average turnover of $8,566 per sq.m ($2013 including GST), which ranks the centre 22nd out of 101 centres of its type.

Alkimos is a planned Secondary Centre located between the Clarkson and future Yanchep centres. Due to its distance from Whitfords its competitive relevance would be minimal. Expansion of retail facilities at Whitfords would therefore be expected to have no effect on development of the Alkimos centre.

3.5 DISTRICT CENTRES District centres of competitive relevance to Whitfords are as follows:

Currambine Central. This centre is well positioned on two major arterial roads and is accessible to residents in Currambine, Kinross, Ocean Reef and Connolly. The centre currently provides around 8,000 sq.m of PLUC 5 shop floorspace and is anchored by a Woolworths supermarket and Dan Murphys liquor store.

Woodvale (Boulevard). The centre is well located east of the Mitchell Freeway on Whitfords Avenue and Trappers Drive. The centre would primarily serve a catchment of Woodvale and Kingsley. A Woolworths supermarket anchors the centre which would comprise around 7,500 sq.m of PLUC 5 shop floorspace in total.

Greenwood Village. The centre is situated on Warwick Road east between the Mitchell Freeway and Allenswood Road. The total amount of PLUC 5 shop floorspace is around 5,000 sq.m and is anchored by a Coles supermarket. The centre serves its local catchment of Greenwood and part of Warwick for convenience shopping needs primarily.

Sorrento Quay. The centre is situated at the Hilary’s Boat Harbour and contains around 7,800 sq.m of PLUC 5 shop floorspace. Sorrento Quay is a popular recreation destination for both locals and tourists. The retail offer comprises restaurants and fashion ad gift boutiques targeting the tourist segment.

Madeley (Kingsway City). This centre is anchored by a Big W DDS and Woolworths supermarket and serves a mix of convenience and basic discretionary non-food shopping needs. Total PLUC 5 shop floorspace amounts to 20,000 sq.m.

Girrawheen. The centre is situated on Warrangaroo Road with good access to the residents of Girrawheen, Marangaroo and part of Greenwood. Girrawheen has a total PLUC 5 shop floorspace of around 8,200 sq.m and is anchored by a Supa IGA supermarket.

3.6 LOCAL CENTRES There are a range of local centres anchored by a full-line supermarket, smaller format supermarkets or food/convenience stores. These centres serve localised catchments and include the likes of Belridge Shopping Centre (Coles), Beldon Park (Woolworths), Hillary’s (Coles), Glengarry (IGA) and Coolibah Plaza (Farmers Jacks).



3.7 PROPOSED DEVELOPMENTS For the purposes of the retail sustainability assessment, future competitive development taken into account are those developments which have been approved or are currently being pursued through the planning process. They are summarised below:

Lakeside Joondalup: shopping centre is currently being redeveloped and the final stage of the expanded centre is expected to be completed in November 2014. Total PLUC 5 shop floorspace at the Lakeside centre will increase by almost 30,000 sq.m, including a new two-level 12,000 sq.m Myer, a new casual dining precinct, and a broad range of new mini-majors and specialty stores. Total PLUC 5 shop floorspace in the overall Joondalup Activity Centre would increase to just over 120,000 sq.m.

Clarkson. An expansion to Ocean Keys Shopping Centre is nearing completion. Stage 1 opened in March 2014 while Stage 2, which includes a new Target discount department store and around 20 specialty shops, will open in November 2014. The Stage 1 and Stage 2 expansions of the centre will add around a combined 14,000 sq.m of PLUC 5 shop floorspace.

Madeley. Plans to expand Kingsway City were approved in 2011 – which include a supermarket and second DDS – however, timing is as yet unknown. For the purposed of this analysis we have assumed that the development (with an additional 15,000 sq.m of PLUC 5 shop floorspace) goes ahead sometime between now and 2017.

Currambine Central. The approved expansion of this centre has commenced and will likely be completed in 2015. A new 1,360 sq.m Dan Murphys store has opened and further expansion of the centre will add around 3,500 sq.m of PLUC 5 shop floorspace, including a fresh food market, new restaurants and associated retail in an expanded entertainment and dining precinct and new retail shops adjacent to the existing Woolworths anchored centre.


Perth North-West Sub-Region Activity Centre Hierarchy INCLUDES MAJOR CENTRES OUTSIDE OF THE NORTH-WEST SUB-REGION TABLE 3.2

Activity Centre Status Main Uses1

Est. PLUC

Floorspace


Joondalup Existing

Lakeside Joondalup, Joondalup Interchange (Railway & Bus), Joondalup Health Campus, Commercial Offices, Education

Facilities (Edith Cowan University, West Coast Institute of Traniing, Australian Institute for University Studies, Western Australia Police Academy) Joondalup Library, Council Chambers, Arena Joondalup

350,000

Stirling Existing

Westfield Innaloo and Mega Centre, GU Cinema Complex, Restaurant Precinct, Chiropractic Centre, Stirling Train

Station,Woodlands Retirement Village, Odin Road Medical Centre, Osbourne Park Induatrial Area, IKEA Perth

301,400

Yanchep Proposed

Secondary Centres

Whitfords Existing

Whitford City, Whitford Public Library, Jean Beadle Commercial Centre, Whitfords Avenue Medical Centre and Health Related

Services, Animal Hospital, Whitfords Family Centre, External Other Retail Uses (Bunnings, Supercheap Auto etc), St Marks School

77,700

Wanneroo ExistingWanneroo Central, Wanneroo City Council, Wanneroo Aquamotion,

Limelight Theatre, Wanneroo Vet Hospital42,700

Warwick Existing Warwick S/C, Grand Cinemas, Warwick Superbowl, Grace Chapel 53,900

Clarkson ExistingOcean Keys, Clarkson Library, Large formant/Bulky retailing,

Bunnings, Vet , Chirpractic Centre,67300*

Karrinyup ExistingKarrinyup, Shopping Cnetre, Bus Station, Karrinyup Library, Serapis

Day Hospital and Medical Services,59,000

Alkimos Proposed

Two Rocks Proposed

District Centres

Madeley Existing Kingsway City, Kinsgway Vet Centre 22,200

Currambine Existing Currambine Central, Grand Cinemas, Dan Murphy's 10,600

Woodvale ExistingWoodvale Shopping Centre, Medical Centres, Woodvale Public

Library7,200

Greenwood Existing Greenwood Village Shopping Centre, Medical Centre 12,200

Alexander Heights Existing Alexander Heights Shopping Centre, Medical Centre 12,300

Girrawheen Existing Newpark Shopping Centre 14,300

Butler Existing Brighton Village Shopping Centre 4,500

Sorrento Quay ExistingSorrento Quay, Western Australia, Aquarium, Marina Apartments, Diving Academy, Naturaliste Marine Discovery Centre, Education

Centre, Yacht Club, Restaurant Precinct, Fun Park22,800

Nerrabup Proposed

Eglinton Proposed1. Inc ludes indicat ive main uses for each centre* Exc ludes current expansionSource : Ac t ivity Centres for Perth and Peel 2010 ; Urbis

30 EXISTING CENTRE PERFORMANCE URBIS


4 Existing Centre Performance This section of the report outlines the current performance of the existing Whitfords activity centre. As the Westfield centre accounts for all of the PLUC 5 shop floorspace within the Whitfords Activity Centre it provides the relevant indicator of the trading performance of retail facilities in the activity centre.

4.1 TURNOVER PERFORMANCE In the year to August 2014, and based on figures provided by the Scentre Group, Table 4.1 shows that Westfield Whitford City achieves an average turnover productivity of $7,160 per sq.m. This trading rate is well above the average of comparable groups of shopping centres, as sourced from the 2013 Urbis Retail Averages. For example, the average turnover productivity at Westfield Whitford City is 16% above the average of double DDS anchored centres and 20% above the average of regional centres, for the most part, anchored by one department store.

Turnover Performance WHITFORD CITY COMPARED WITH AUSTRALIAN AVERAGES TABLE 4.1

This premium performance, together with the strong trading performance of other centres in the region (e.g. Joondalup), indicates that higher order centres in particular are overtrading relative to benchmarks. With demand exceeding supply, there is capacity in the market to support a larger provision of PLUC 5 shop floorspace at Whitford City and other centres.

4.2 MARKET SHARE PERFORMANCE Based on the estimated geographic distribution of trade, which is derived from the 2011 exit survey conducted at Westfield Whitford City shopping centre, the current market shares achieved by the PLUC 5 shop floorspace at the centre are calculated. This analysis is summarised in Table 4.2.

Table 4.2 shows that Westfield Whitford City is attracting a 13.2% share of all expenditure by main trade area residents on retail goods and services. The remaining 87% of this expenditure is being directed to other centres within and mostly outside of the trade area.

The non-food market share is higher at 19.6% reflecting the centre’s role as a key centre for discretionary shopping needs. About 25% of the centre’s retail turnover, including a 30% of non-food turnover, is sourced from markets outside of the trade area. The majority of this ‘beyond’ business is sourced from residents living elsewhere in the North-West Sub-Region.

Whitfords1 Double DDS Other Regionals Double DDS Other RegionalsAverage Trading Level $/sq.m 7,160 6,173 5,960 +16% +20%1. Whitfords retail turnover is based on annualised turnover est imates for tenants at Whitford City at August 20142. Benchmarks are for the year to June 2013 from Urbis Retail Averages 2012/13.Source: Scentre Group ; Urbis Retail Averages 2012/13 ; Urbis

Benchmark2 Variation

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 EXISTING CENTRE PERFORMANCE 31

Centre Market Shares WHITFORD CITY MAIN TRADE AREA, 2014 ($2014 AND EXCLUDING GST) TABLE 4.2

Resident Spending ($M) Market Share (%) Retail Turnover ($M) Turnover Distribution

Food NF Total Food NF Total Food NF Total

Primary Trade Area 357 229 585 18.8% 35.5% 25.3% 67.1 81.3 148.4

Secondary Trade Area

Secondary North 161 101 262 5.8% 16.1% 9.8% 9.3 16.2 25.5

Secondary East 404 260 665 4.2% 13.0% 7.7% 17.1 33.9 51.0

Secondary South 308 212 521 6.0% 12.0% 8.4% 18.4 25.5 43.9

Total Secondary 874 573 1,447 5.1% 13.2% 8.3% 44.9 75.6 120.5

Main Trade Area 1,230 802 2,032 9.1% 19.6% 13.2% 112.0 156.9 268.8

Plus Turnover From Beyond TA 15.8% 29.7% 24.5% 21.0 66.1 87.2

Centre Retail Turnover ($M) 133.0 223.0 356.0

Source : Westfield; Urbis

32 MARKET DEMAND AND TURNOVER POTENTIAL URBIS


5 Market Demand and Turnover Potential This section of the report outlines the assessment of market demand and turnover potential of the proposed PLUC 5 shop floorspace at Whitfords Activity Centre.

5.1 FUTURE RETAIL DEVELOPMENT As shown in Table 5.1, the proposed expansion of the centre, which is the subject of this RSA, contemplates the addition of around 23,080 sq.m of PLUC 5 shop floorspace. Some 20,580 sq.m of this additional floorspace will be provided as part of a major redevelopment of the centre, which is expected to be completed in time for a (financial year) 2017 opening year of trade. The development will also include ambience improvements to the centre and delivery of a high quality shopping environment.

The balance of the floorspace (i.e. 2,500 sq.m) would be provided in the Endeavour Road and/or Banks precincts between 2018 and 2020.

When the full 23,080 sq.m is added the total PLUC 5 shop floorspace at Whitfords Activity Centre would amount to approximately 77,500 sq.m.

Table 5.1 below provides a summary of the PLUC 5 shop floorspace at Whitfords Activity Centre for the existing centre and planned stages of expansion. Of note, there is a current DA with Joondalup Council for an additional 4,573 sq.m of PLUC 5 shop floorspace. It should be noted that Table 5.1 represents an estimate of the proposed PLUC 5 shop floorspace composition and remains subject to future Development Applications.

Proposed PLUC 5 Shop Floorspace WHITFORDS ACTIVITY CENTRE TABLE 5.1

5.2 ASSUMPTIONS The key assumptions factored into the assessment of need, demand and impacts are as follows:

The opening year of trade for the additional 20,580 sq.m of PLUC 5 shop floorspace is financial year 2017. The remaining 2,500 sq.m will be added to the activity centre between 2018 and 2020.

Population growth in the main trade area and broader North-West Sub-Region is forecast as outlined in Section 2 of this report.

The existing and future centres hierarchy is as outlined in Section 3.

There are no major shocks to the Australian or Western Australian economies over the forecast period.

The analysis takes into account approved retail developments within the forecast timeframe as well as the ongoing effect of the growth in online retailing.

Existing Current DA Masterplan Expansion

Tenant Type 2014 2015 2017 2018-2026

Department Store 0 0 12,000 12,000Discount Department Store 16,179 16,179 16,199 16,199

Supermarkets 9,091 9,091 10,111 10,111

Mini-Majors 7,000 7,000 10,000 10,000

Total Majors and Mini-Majors 32,270 32,270 48,310 48,310

Specialty Shops 17,577 22,150 26,690 29,190

Total Centre (PLUC 5) 49,847 54,420 75,000 77,500

Incremental GLA Between Stages +4,573 +20,580 +2,500Source: Scentre Group ; Urbis

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 MARKET DEMAND AND TURNOVER POTENTIAL 33

5.3 MARKET DEMAND ASSESSMENT The market demand in support of the proposed expansion of Whitfords Activity Centre is detailed as follows:

For at least the past 10 years, the growth in market demand has significantly outpaced the increase in supply of PLUC 5 shop floorspace in Whitfords’ main trade area and the wider North-West Sub-Region of Perth. Retail expenditure by main trade area residents has grown by more than 30% since 2004 (in constant dollar terms) which compares with an estimated less than 5% increase in retail floorspace in the main trade area. Modest increases in PLUC 5 shop floorspace (relative to demand growth) are also evident in the areas surrounding the main trade area. Development of new retail floorspace therefore has not kept up with demand and there is a need to address this historical shortfall.

The outcome is currently high levels of turnover productivity at most higher order shopping centres in the region and an undesirable level of expenditure escaping the main trade area and wider North-West Sub-Region. The potential benefits that could be realised through greater levels of retail activity at Whitfords and other activity centres in the region are being lost.

Population growth and in turn PLUC 5 shop floorspace demand growth has increased substantially in recent years in the Whitfords main trade area. The continual regeneration and gentrification of existing households coupled with ongoing population and retail spending growth will drive demand for more floorspace and an improved range and quality of shops, services and built form environments.

There is capacity in the North-West Sub-Region to support a second department store (in addition to the soon to open Myer store at Joondalup) today and a third department store between 2021 and 2026. The Whitfords Activity Centre will serve a market large enough to support a successfully trading department store.

The scale and mix of uses proposed for Whitfords Activity Centre is supportable by market demand. The market shares required to support the proposed expansion of PLUC 5 shop floorspace at Whitfords is within benchmarks for a department store anchored centre. Whitfords therefore will capture its fair share of the market for a Secondary Centre while leaving sufficient market demand to support the intended role of the centres in the surrounding hierarchy.

Except for a small format supermarket, the Whitfords expansion is not adding anchors that would be required to support the expansion of lower order neighbourhood and District Centres (e.g. DDSs and supermarkets). The Whitford expansion is adding mostly F&B and discretionary retail uses which are under-provided in the region generally and the main trade area.

There is a need for significant improvements to the Whitfords Activity Centre to bring it in-line with the expectations of consumers today (who are seeking an enhanced experience through an improved retail offer, amenities and environments) and deliver a more vibrant and diverse town centre for the community. Retail expansion is a critical component in delivering the required improvements.



5.4 TURNOVER POTENTIAL ASSESSMENT This sub section of the report outlines analysis of the turnover potential of Whitfords Activity Centre for the proposed expansion of PLUC 5 shop floorspace.

5.4.1 WHITFORDS WITH CURRENT DA (54,420 SQ.M) In order to determine the incremental retail turnover at Whitfords Activity Centre on the basis an additional 22,580 sq.m is added by 2017 and a further 2,500 sq.m from 2018 to 2020, it is first necessary to estimate the turnover of the centre with its existing PLUC 5 shop floorspace (49,847 sq.m) and inclusion of the current DA expansion (4,573 sq.m).

Table 5.2 outlines the retail turnover potential for Whitfords on the basis the centre includes the current DA expansion (i.e. an additional 4,573 sq.m of PLUC 5 shop floorspace) and expected future competitive developments between 2014 and 2017.

Retail Turnover Potential: Including Current DA Expansion WHITFORDS ACTIVITY CENTRE, 2017 ($2014, EXCLUDING GST) TABLE 5.2

Based on the assumptions for market growth and competitive developments, Whitfords Activity Centre has the potential to achieve a retail turnover of around $396 million by 2017 ($2014 excluding GST). This represents a $40 million increase in retail turnover relative to the current turnover of $356 million. About a third of the increase in turnover between 2014 and 2017 is attributable to market growth with the balance generated by the additional 4,573 sq.m of PLUC 5 shop floorspace.

5.4.2 WHITFORDS WITH AN ADDITIONAL 20,580 SQ.M (75,000 SQ.M) The turnover potential of Whitfords activity centre, if expanded by 20,580 sq.m to provide 75,000 sq.m of PLUC 5 shop floorspace by 2017, takes into account the following:

Consistent with our experience with other centre expansions, average trading levels generally do not increase but are lower following an expansion. This is particularly the case with the addition of a department store, which will account for approximately 60% of the additional floorspace to 2017 and trade at a rate per square metre significantly lower than the current centre average. The average trading level of the centre decreases from $7,270 per sq.m with the current DA to $6,880 per sq.m post the expansion in 2017 (expressed in constant $2014 exc. GST).

The addition of a department store and complementary retailing will facilitate the capture of a significant share of current spending being directed to higher order centres outside the main trade area (e.g. Karrinyup and the Perth CBD). The Whitfords centre is therefore expected to attract higher market share from the main trade area, notably in the non-food category.

The amount of business drawn from outside the main trade area will be expected to increase but this will be moderated by the expansion of Joondalup (which includes the addition of a department store).

Resident Spending ($M) Market Share Potential Turnover Potential ($M) Turnover Distribution


Primary Trade Area 375 249 624 18.7% 38.1% 26.4% 70.1 94.6 164.7


Secondary North 169 109 278 5.5% 15.6% 9.5% 9.3 17.0 26.3

Secondary East 438 291 729 4.1% 13.2% 7.7% 17.9 38.3 56.3

Secondary South 324 230 554 6.0% 13.2% 9.0% 19.3 30.4 49.7

Total Secondary 930 630 1,560 5.0% 13.6% 8.5% 46.5 85.8 132.2

Main Trade Area 1,305 879 2,184 8.9% 20.5% 13.6% 116.6 180.3 296.9



Source : Urbis

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 MARKET DEMAND AND TURNOVER POTENTIAL 35

The expansion of the Whitfords activity centre to 75,000 sq.m in 2017 will result in the centre capturing about a 18% market share of main trade area spending in 2017, including a 28% share of non-food spending. The market shares assessed for the Whitford centre are within the range of comparable centres (with department stores) across Australia, highlighting a sustainable position for the centre and the broader centre hierarchy. The vast majority of main trade area retail demand (i.e. 82%) will still be available to support other centres.

Of the gain in retail turnover at Whitfords activity centre, approximately 25% is estimated to be sourced from markets beyond the main trade area. Approximately 75% of the increase in turnover will be sourced from main trade area residents, of which the vast majority will be from increased rates of non-food retail expenditure retained locally (rather than being directed to further afield centres).

The major expansion therefore will be largely supported by its trade area market and effective in reducing the level of escape expenditure as well as enabling a greater share of expenditure to be undertaken locally, which has social, economic and environmental benefits.

On this basis and with a main trade area market size of $2.2 billion in 2017, the Whitfords centre providing 75,000 sq.m would have the potential to achieve a PLUC 5 retail turnover of $516 million, as shown in Table 5.3.

Retail Turnover Potential: Additional 20,580 Sq.m (to 75,000 Sq.m) WHITFORDS ACTIVITY CENTRE, 2017 ($2014, EXCLUDING GST) TABLE 5.3



Primary Trade Area 375.2 248.6 623.8 22.6% 46.7% 32.2% 84.8 116.2 201.0


Secondary North 168.8 109.2 278.0 6.7% 21.1% 12.4% 11.3 23.1 34.4

Secondary East 437.8 290.9 728.6 5.0% 20.5% 11.2% 21.7 59.7 81.4

Secondary South 323.6 230.2 553.8 7.2% 20.6% 12.8% 23.3 47.3 70.7

Total Secondary 930.2 630.2 1,560.4 6.1% 20.6% 11.9% 56.3 130.1 186.4

Main Trade Area 1,305.4 878.8 2,184.2 10.8% 28.0% 17.7% 141.1 246.3 387.4



Source : Urbis



The net additional turnover at Whitfords in 2017, if expanded to include an additional 20,580 sq.m, is therefore $120 million, including $91 million in non-food turnover. Of the $120 million, $90.5 million is estimated to be drawn from the main trade area and $29.9 million from outside the main trade area. The market share increase across the main trade area would be around 4%.

The net additional turnover and market shares that are expected to be achieved at the Whitfords centre with expansion by 20,580 sq.m to 75,000 sq.m of PLUC 5 shop floorspace by 2017 is detailed in Table 5.4.

Net Additional Retail Turnover Potential: Additional 20,580 Sq.m WHITFORDS ACTIVITY CENTRE, 2017 ($2014, EXCLUDING GST) TABLE 5.4

The net additional turnover represents the amount of spending that will be directed from other centres or in other words the combined trading impact on other centres in 2017.

5.4.3 WHITFORDS WITH AN ADDITIONAL 2,500 SQ.M (77,500 SQ.M) The additional 2,500 sq.m of PLUC 5 shop floorspace proposed to be added from 2018 to 2020 within the Endeavour Road and/or Banks precincts will provide an important complementary role to the retail shops in the Westfield Whitford City centre and serve F&B, convenience retail and services needs of local workers and residents. These uses will add to the overall vitality of the Whitfords Activity Centre and will be integral to activating the precincts outside of the main shopping centre.

On the expectation that this range of specialty shops would achieve a turnover of approximately $19 million ($2014, including GST) and with 85% of the turnover sourced from main trade area residents (i.e. approximately $16 million), the 2,500 sq.m of shops would account for 0.6% of main trade area retail expenditure in 2020.

There is easily sufficient market demand to support these shops, particularly given they will be catering to the specific needs of the range of visitors to the Whitfords Activity Centre.



Primary Trade Area 375.2 248.6 623.8 3.9% 8.7% 5.8% 14.7 21.6 36.3


Secondary North 168.8 109.2 278.0 1.2% 5.5% 2.9% 2.0 6.0 8.1

Secondary East 437.8 290.9 728.6 0.9% 7.3% 3.4% 3.8 21.4 25.1

Secondary South 323.6 230.2 553.8 1.2% 7.4% 3.8% 4.0 16.9 21.0

Total Secondary 930.2 630.2 1,560.4 1.1% 7.0% 3.5% 9.8 44.3 54.2

Main Trade Area 1,305.4 878.8 2,184.2 1.9% 7.5% 4.1% 24.6 66.0 90.5



Source : Urbis

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 IMPACT ASSESSMENT 37

6 Impact Assessment An impact assessment can reasonably be expected to provide an indication of the trading environment and average trading conditions which retailers are likely to operate within, and implications for likely turnover declines or turnover gains, on average, for the retailers involved. Because an impact assessment seeks to forecast how groups of people are likely to alter their shopping behaviour in response to a given change in the competitive environment, it is not possible to be so precise as to estimate exactly what will happen to each individual retailer, or each group of retailers in each location.

It is therefore not possible in any impact assessment of this type to estimate precisely what will be the trading impacts on any specific individual retailer. The impact on any one individual retailer, or any small group of retailers in a given location, would depend on many factors, some of which are within their control. The actions which each of these retailers take will determine the eventual impact on each of them, and furthermore the actions which they each take will also determine the eventual impact on the other retailers involved.

All of these factors need to be kept in mind when considering the likely impact of any relocation and expansion of a retailer within the existing retail network. Existing retailers are not passive participants, but rather will play a major role in the eventual impact which they will experience.

It should also be noted that the effects of new competition on individual businesses or centres are not a relevant planning consideration in most situations. The relevant consideration in planning terms relates to the ongoing ability for a centre to continue to provide for the needs of the community which they serve, and to ensure that new development does not fundamentally undermine the viability and role of existing and planned centres, particularly their role as community focal points for a range of needs.

6.1 CENTRE SPECIFIC IMPACTS Shopper behaviour is related to the satisfaction of particular requirements, and decisions regarding where to shop are based on the sum total of a number of judgements, including relative accessibility, the availability of particular traders, convenience, variety, carparking, and others. As a result, residents like to spread their purchases across a wide variety of shopping centres and areas, and to use the full range of facilities available to satisfy particular needs.

The method of analysis used to assess the impacts on individual centres from a retail development is based on a “competitive usage” model. This model is based on the principle that if shoppers choose to direct some of their retail expenditure to the subject development proposal then they will reduce their expenditure at other centres in direct proportion to their usage of each centre or location, as reflected by each centre’s market share from the various trade area sectors. In assessing the potential impacts on other centres in the hierarchy we have adopted a “turnover allocation approach”.

The assessment of impacts on specific retail centres relies upon an understanding of the existing turnover and level of usage of centres in the trade area and beyond. The model estimates the degree to which various shopping locations within and beyond the trade area are used for retail shopping by allocating a proportion of turnover to each trade area sector (i.e. source of sales). These estimates result in market share calculations for each competitive centre and thereby form the basis by which the impact of the proposed retail development is distributed to all other centres used by residents of the trade area for retail shopping.

It is also relevant to consider the dollar impacts in relation to the turnover that would potentially be generated by these and other shopping centres over the intervening period. The impact analysis therefore details the turnover loss or net impact which is expected for each centre/location, expressed as a reduction in turnover and as a percentage of the turnover level for each centre in 2017 (for the case when 20,580 sq.m is added to Whitfords Activity Centre and centre’s PLUC 5 shop floorspace would increase to 75,000 sq.m).

38 IMPACT ASSESSMENT URBIS


6.2 EXPANSION BY 20,580 SQ.M TO 75,000 SQ.M Table 6.1 outlines the assessment of potential trading impacts on individual centres on the basis approximately 20,580 sq.m of PLUC 5 shop floorspace is added to Whitfords in 2017. This analysis indicates the following:

The one-off impacts on individual centres ranging from -0.3% to -4.2% are well within an acceptable range and substantially less than 10%, which is the notional benchmark for when impacts may be an issue.

The effect of market growth and resulting turnover productivity levels are the most relevant considerations when assessing trading impacts. In the case of each affected centre, the resulting trading levels in most cases are expected to remain above industry averages and therefore easily remain at sustainable levels (refer to Table 6.2). The one-off impact on each centre can be quickly absorbed by future market growth beyond the development year.

In terms of impacts on the Joondalup Activity Centre:

The Joondalup activity centre is expected to experience a $30 million one-off trading impact in 2017. This represents a one-off 3.9% diversion of trade which would be quickly offset by market growth. The overall Joondalup Activity Centre (including the Lakeside Joondalup centre) will continue to achieve an average trading level above benchmarks.

The Joondalup activity centre will continue to maintain its role as the highest order retail destination in the Joondalup municipality. In 2017, the Joondalup city centre has the potential to achieve a retail turnover volume of approximately $747 million, around $230 million higher than Whitfords, making Joondalup easily the largest and highest volume retail centre in the hierarchy.

Further commentary on the impacts on the Joondalup Activity Centre is provided later in this sub-section of the report.

Of the Secondary Centres, the highest impact is expected on the Karrinyup centre, estimated as a one-off reduction in turnover of -4.2%. Again market growth would be expected to offset this impact and turnover is estimated to be 1% higher in 2017 than the 2014 level.

The overall impact on District Centres will be low. With the expansion focussed on the discretionary segment of the market, the impact on lower order centres is expected to be between -0.3% and -2.6%. In all cases assessed, market growth would offset the assessed one-off impact and will not affect the performance and role of the lower order centres.

Local centres, such as those anchored by a supermarket (e.g. Bell Ridge, Beldon Park, Woodvale, and Hillarys) will be largely unaffected by the expansion of Whitfords. The majority of Whitfords expansion will be accounted for by an increase in discretionary related retail floorspace, not convenience based retail mostly provided in local centres.

A significant share of the impacts will be accounted for by a redirection of expenditure away from centres outside the Joondalup municipality and particularly from established centres in the inner and middle northern suburbs of Perth. This is a positive outcome for Joondalup residents as less expenditure would leave the municipality. As a result, travel times and distance undertaken for higher order shopping needs would be reduced. More expenditure and shopping trips would be undertaken locally in support of the local centres hierarchy. This diversion of trade back to the Joondalup municipality is in part represented by the impacts on the Karrinyup and Stirling centres.

The level of impacts and share of the market captured by the proposed expansion of Whitfords would not impede the potential for other centres to expand or new centres to be developed.

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 IMPACT ASSESSMENT 39

Distribution of Impact on Key Centres: Additional 20,580 Sq.m (to 75,000 Sq.m) WHITFORDS ACTIVITY CENTRE EXPANSION, 2017 ($2014, EXCLUDING GST) TABLE 6.1

Turnover Change at Key Activity Centres: Additional 20,580 Sq.m (to 75,000 Sq.m) WHITFORDS ACTIVITY CENTRE EXPANSION, 2017 ($2014, EXCLUDING GST) TABLE 6.2

Turnover Incr./Decr. ($M)

Est. Retail Turnover ($M)1

Relative to: IMPACT

Existing Pre-Exp1 Post Exp. Existing Pre-Exp Relative to:2014 2017 2017 2014 2017 2014 2017

(1) (2) (3) (4)=(3)-(1) (5)=(3)-(2) (6)=(4)/(1) (7)=(5)/(2)Shopping Area

Joondalup 598 778 747 +149.4 -30.5 +25.0% -3.9%

Wanneroo 124 125 123 -0.7 -2.3 -0.6% -1.8%

Warwick 200 210 204 +4.7 -5.4 +2.4% -2.6%

Clarkson (Ocean Keys) 220 315 310 +89.8 -4.8 +40.8% -1.5%

Currambine 93 121 119 +26.9 -1.5 +29.0% -1.3%

Woodvale 67 68 67 -0.3 -1.4 -0.4% -2.0%

Madeley (Kingsway City) 133 211 206 +73.1 -5.4 +55.0% -2.5%

Sorrento Quay 55 59 59 +3.3 -0.2 +6.0% -0.4%

Greenwood Village 44 45 45 +0.6 -0.6 +1.5% -1.4%

Girrawheen 65 68 67 +2.4 -0.5 +3.7% -0.7%

Alexander Heights 90 94 94 +3.7 -0.3 +4.1% -0.3%

Karrinyup 395 416 398 +3.1 -17.6 +0.8% -4.2%

Stirling (Innaloo) 358 387 383 +24.7 -4.2 +6.9% -1.1%

Total Above Centres 2,441 2,897 2,822 +380.8 -74.7 +15.6% -2.6%

Other Centres -45.7

Total Competing Centres -120.4

1. Year ending June2. Turnover CHANGE is a comparison to current 2014 turnover Turnover IMPACT is a comparison to expec ted turnover would otherwise be in the forecast year if the subjec t development did not occur. Source : Property Counc il 'Australian Shopping Centre Direc tory', 2013; Shopping Centre News 'Big Guns 2014, Lit t le Guns and Mini Guns 2013'; Urbis

PLUC 5 Floorspace (Sq.m) Trading Level ($2014/sq.m) Retail

Current Future Current Pre-Dev Post-Dev Averages

Suburb 2014 2017 2014 2017 2017 2013

Whitfords 49,847 75,000 7,140 7,270 6,880 6,173Joondalup 92,990 121,490 6,430 6,400 6,150 6,177Wanneroo 18,200 18,200 6,800 6,880 6,760 6,723Warwick 25,600 25,600 7,800 8,200 7,980 6,723Clarkson (Ocean Keys) 28,200 42,200 7,800 7,460 7,340 6,723Madeley (Kingsway City) 19,800 33,800 6,720 6,250 6,100 6,723Karrinyup 52,500 52,500 7,530 7,920 7,590 6,177Stirling (Innaloo) 57,800 57,800 6,200 6,700 6,630 6,173Note: 2014 floorspace for Clarkson and Joondalup exc lude the latest expansions at the centres.Source : PCA 'Australian Shopping Centre Direc tory', 2013; Shopping Centre News 'Big Guns 2014, Lit t le Guns and Mini Guns 2013'; Urbis

40 IMPACT ASSESSMENT URBIS


JOONDALUP ACTIVITY CENTRE ROLE AND EXPANSION POTENTIAL As indicated earlier, the level of one-off retail impacts will not adversely affect the sustainability of the retail component of the Joondalup Activity Centre. The proposed quantum of PLUC 5 shop floorspace expansion at Whitfords Activity Centre will also not affect the role of Joondalup as a strategic centre in the hierarchy. The key reasons are as follows:

Diversity of retail offer and other visitation drivers will attract visits. Following the redevelopment of Whitfords, residents are expected to continue to travel to Joondalup to shop, irrespective of the size of Whitfords, to experience diversity in shopping experience due to the different retailers and amenity provided at the centre but also the wide range of other uses at the centre which drive visitation for reasons other than specifically for shopping purposes (e.g. University, employment, businesses in offices, etc.). During these non-retail related visits people will elect to varying degrees to undertake some shopping or have a meal/snack.

Joondalup is much more than a retail centre. The Joondalup Activity Centre is the focus for commercial, educational and community activity for the region, including the Edith Cowan University and health campus, Joondalup Council municipal offices, as well as other office uses and services. The rail network provides support for the ‘strategic’ uses in the Joondalup activity centre. The proposed Whitfords expansion will not impact these important unique functions of the Joondalup Activity Centre which are integral in supporting its primacy in the centre hierarchy.

The retail impacts will not adversely impact retail based visitation. Due to the discretionary focus of the expansion of Whitfords would have negligible impact on PLUC 5 related bulky goods retailing. The main street retailing will also experience negligible impacts given the focus of the main street is on services and convenience retailing mostly serving the local workforce, students and visitors. Furthermore, the Lakeside Joondalup centre is expected to continue to trade at a productivity rate similar to that of comparable centres after the expansion of the Whitfords activity centre. Retail based visitation to the town centre therefore will not be adversely affected and remain at more than sufficient levels to effectively support retail and other uses in the Joondalup Activity Centre.

Strong market growth will support the ongoing retail expansion of Joondalup Activity Centre. The expansion of Whitfords would not impact the potential for the Joondalup centre to expand in the future. This centre will continue to be able to access and leverage the rapidly growing outer northern suburbs of Perth.

6.3 EXPANSION BY 2,500 SQ.M (TO 77,500 SQ.M) On the expectation that this range of specialty shops would achieve a turnover of $19 million ($2014, including GST) and with 85% of the turnover sourced from main trade area residents (i.e. approximately $16 million), the shops would account for 0.7% of main trade area retail expenditure in 2020.

The level of market share capture would have negligible impacts on other centres in the area and would have no adverse outcomes on the centre hierarchy.

6.4 SENSITIVITY TESTING A sensitivity test, in terms of future market growth projections, has been undertaken to test the scenario where market growth was lower than the forecasts outlined in this report. This analysis is outlined in Appendix B of this report.

The key conclusion from the sensitivity testing was that lower growth assumptions would result in only minor changes to the analysis and would have no material impact on the findings and conclusions of the Retail Sustainability Assessment.

As noted in the main body of the RSA report, the projections for market growth could very well prove conservative given recent and long term trends in Whitfords main trade area and the broader North-West Sub-Region.

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 COMMUNITY BENEFITS 41

7 Community Benefits A key objective of SPP4.2 is to enable centres to provide the market with the best possible access to retail, employment and services. Given the level of impacts would not result in adverse outcomes at any one centre, the proposed expansion of Whitfords is not threatening planning policy and the existing and planned centre hierarchy but rather the development is:

Improving a shopping centre for the benefit of the community. This is place where people meet and socialise and is an important piece of infrastructure for the community.

Improving the public realm for the benefit of the local community.

Expanding the range and improving the accessibility of retail facilities and services.

Increasing the opportunity for linked trips through a more diverse range of retail and services in one location, which can have social and environmental benefits.

Providing more jobs and employment opportunities.

Injecting significant investment into the local and broader regional economies.

Strengthening the competitive landscape which can:

bring greater levels of innovation, choice and better prices; and

be a catalyst for more investment as other businesses look to co-locate and access the increased number of shoppers/visitors to the Whitfords centre and affected centres respond to the new competition.

42 CONCLUSIONS URBIS


8 Conclusions There is market need for a substantial increase in the supply of PLUC 5 shop floorspace in the North-West Sub-Region of Perth and the main trade area served by the Whitfords activity centre to:

Better satisfy existing demand and cater to the growing market in the future.

Provide a higher quality shopping experience and offer that better aligns with the needs of residents.

Realise the range of community benefits that would be associated with the proposed expansion of PLUC 5 shop floorspace and general improvements to the Whitfords Activity Centre.

The proposed expansion of the Whitfords centre to 75,000 sq.m of PLUC 5 shop floorspace by 2017 and 77,500 sq.m between 2018 and 2020 can be supported by the market and is necessary to ensure the shop floorspace needs of residents of Whitfords main trade area and wider North-West Sub-Region are adequately met. As a Secondary Centre and reflecting its accessible location and established retail role in the region, Whitfords needs to be a major contributor to the delivery of shop floorspace demand.

The impact analysis indicates that the proposed expansion of Whitfords activity centre to 77,500 sq.m of PLUC 5 shop floorspace would not have an adverse impact on any one centre in the region. The impact on any centre is manageable and the proposed expansion would not compromise the role, function and viability of other activity centres.

Of note, the role and primacy of the Joondalup activity centre would not be impacted as the retail impacts are sustainable and the expansion of Whitfords would not affect the centre’s primary position in the hierarchy and strategic role from a civic, cultural, employment and service perspective. Furthermore, Joondalup would still have substantially more PLUC 5 shop floorspace than Whitfords, i.e. the city centre of Joondalup following the latest expansion of the Lakeside centre would provide around 120,000 sq.m or 42,500 sq.m (+55%) more PLUC 5 shop floorspace than Whitfords with 77,500 sq.m, and the Lakeside Joondalup centre will trade at a productivity rate comparable with other higher order centres. Joondalup Activity Centre will still have the opportunity to further expand on the back of the strong market growth forecast for its catchment.

The impacts (or diversion of trade) resulting from the expansion of Whitfords activity centre are to a large extent the result of the retention of local spending in main trade area that is currently escaping to centres outside of this area and the Joondalup municipality/North-West Sub-Region. This would be a positive outcome for residents with reduced travel times and distance needed for them to undertake higher order shopping needs. More expenditure undertaken locally will also provide greater support for other uses, serve as a catalyst for other investment in centres and generally support the development of larger, more diverse, more vibrant and successful activity centres.

In conclusion, the proposed expansion of the Whitfords Activity Centre to 77,500 sq.m is supportable by market demand and will not impact the role and viability of other centres in the hierarchy and the community will benefit from enhanced access to retail goods and services over time. A sustainable centre hierarchy will be preserved and enhanced through a broader range of shops and services.

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 DISCLAIMER 43

Disclaimer

This report is dated October 2014 and incorporates information and events up to that date only and excludes any information arising, or event occurring, after that date which may affect the validity of Urbis Pty Ltd’s (Urbis) opinion in this report. Urbis prepared this report on the instructions, and for the benefit only, of Scentre Group (Instructing Party) for the purpose of RSA (Purpose) and not for any other purpose or use. To the extent permitted by applicable law, Urbis expressly disclaims all liability, whether direct or indirect, to the Instructing Party which relies or purports to rely on this report for any purpose other than the Purpose, and to any other person which relies or purports to rely on this report for any purpose whatsoever (including the Purpose).

In preparing this report, Urbis was required to make judgements which may be affected by unforeseen future events, the likelihood and effects of which are not capable of precise assessment.

All surveys, forecasts, projections and recommendations contained in or associated with this report are made in good faith and on the basis of information supplied to Urbis at the date of this report, and upon which Urbis relied. Achievement of the projections and budgets set out in this report will depend, among other things, on the actions of others over which Urbis has no control.

In preparing this report, Urbis may rely on or refer to documents in a language other than English, which Urbis may arrange to be translated. Urbis is not responsible for the accuracy or completeness of such translations and disclaims any liability for any statement or opinion made in this report being inaccurate or incomplete arising from such translations.

Whilst Urbis has made all reasonable inquiries it believes necessary in preparing this report, it is not responsible for determining the completeness or accuracy of information provided to it. Urbis (including its officers and personnel) is not liable for any errors or omissions, including in information provided by the Instructing Party or another person or upon which Urbis relies, provided that such errors or omissions are not made by Urbis recklessly or in bad faith.

This report has been prepared with due care and diligence by Urbis and the statements and opinions given by Urbis in this report are given in good faith and in the reasonable belief that they are correct and not misleading, subject to the limitations above.

44 DISCLAIMER URBIS


URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 APPENDICES

Appendix A PLUC 5 Categories

APPENDICES URBIS


PLUC 5 Shop/Retail Definition RETAIL EXPENDITURE INCLUDED BY PRODUCT GROUP TABLE A.1

Product Group Commodity Items Food/Non-Food

Food Retail Food, Groceries, Tobacco, Liquor FoodFood Catering Take-Away, Meals FoodApparel Clothing, Footwear, Jewellery, Accessories Non-FoodHomewares Household, TV/Sound, Small Electricals, Manchester Non-FoodBulky Goods Furniture, Large Electricals Non-FoodGeneral/Leisure Books, Music, Sports, Toys, Chemist, News Non-FoodRetail Services Hair, Optician, Film Processing, Dry Cleaning, Video Hire, Repairs Non-Food

Source: WAPC ; Urbis

URBIS WHITFORDS ACTIVITY CENTRE RSA OCTOBER 2014 APPENDICES

APPENDIX B Sensitivity Analysis

APPENDICES URBIS


SENSITIVITY ANALYSIS The market demand and impact analysis has also been undertaken on the basis of lower retail spend per capita assumptions for the main trade area and broader North-West Sub-Region.

In particular, instead of the application of an average annual growth rate of 1.3%, a lower 1% per annum growth rate has been applied. The key findings are as follows:

In terms of the size of the retail spending market:

The retail spending market in the main trade area would be 0.9% smaller in 2017 and 3.4% smaller in 2026.

The retail spending market in the whole study area (main trade area and balance of the North West Sub Region) would be 0.9% smaller in 2017 and 3.6% smaller in 2026.

The retail turnover of Whitfords Activity Centre with 75,000 sq.m of PLUC 5 shop floorspace in 2017 would be 0.8% or $4 million lower.

There would be virtually no change to the level of one-off impacts (in percentage terms) assessed for the proposed addition of PLUC 5 shop floorspace.

The change in the average turnover productivity at each centre (following an impact from expansion of Whitfords Activity Centre) would be around 1%.

Similarly if population growth in the main trade area was, for example, half that of the forecast growth of 0.9% per annum (i.e. 0.45% lower per annum), this outcome would have marginal bearing on the results of the RSA.

In conclusion, lower growth assumptions would result in only minor changes to the analysis and would have no material impact on the findings and conclusions of the Retail Sustainability Assessment.

As noted in the main body of the RSA report, the projections for market growth could very well prove conservative given recent and long term trends in Whitfords main trade area and the broader North-West Sub-Region.

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