Cheltenham Major Activity Centre | Retail Needs and ... · Cheltenham’s Main Trade Area Cheltenham’s Main Trade Area is shown in the following figure. It extends approximately

MacroPlan Australia Setting New Standards

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Cheltenham Major Activity Centre | Retail Needs and Opportunity Assessment

FINAL REPORT March 2010

PREPARED FOR THE CITY OF KINGSTON MACROPLAN AUSTRALIA PTY LTD NSW | VIC | QLD | WA

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…………………………………….……. Dated

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Item Detail

Project Name Kingston Retail

Project Number 83664

File Location V:\RAC - Retail and Commercial\VIC\83664_Kingston Retail\Reports

Prepared by Richard Brice, Angela Minn

Approved by Richard Brice

Status Final

Version Number 3

Last Saved on 26 March 2010

REPORT CONTACT

Angela Minn Consultant Retail & Commercial

PROJECT DIRECTOR Richard Brice General Manager Research & Economic Analysis

+ Contact Information

SYDNEY Level 1, 34 Hunter Street, Sydney, NSW. 2000 t. 02 9299 8988 f. 02 9299 5664

MELBOURNE Level 4, 356 Collins Street Melbourne, VIC. 3000 t. 03 9600 0500 f. 03 9600 1477

BRISBANE Level 2, 320 Adelaide Street, Brisbane, QLD. 4000 t. 07 3010 9240 f. 07 3010 9640

e. [email protected] w. www.macroplan.com.au

© MacroPlan Australia Pty Ltd All Rights Reserved. No part of this document may be reproduced, transmitted, stored in a retrieval system, or translated into any language in any form by any means without the written permission of MacroPlan Australia Pty Ltd. Intellectual Property Rights All Rights Reserved. All methods, processes, commercial proposals and other contents described in this document are the confidential intellectual property of MacroPlan Australia Pty Ltd and may not be used or disclosed to any party without the written permission of MacroPlan Australia Pty Ltd.

Disclaimer

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Contents

+ Executive summary ----------------------------------------------------------------------------------------------- 4

1 Introduction ---------------------------------------------------------------------------------------------- 10

1.1 Methodology -------------------------------------------------------------------------------------- 10 1.2 Locational context ------------------------------------------------------------------------------- 15 1.3 Information sources ----------------------------------------------------------------------------- 17 1.4 Abbreviations ------------------------------------------------------------------------------------- 17

2 Literature review ---------------------------------------------------------------------------------------- 18

2.1 Melbourne 2030 & Melbourne @ 5 Million ------------------------------------------------- 18 2.2 Kingston Planning Scheme – Municipal Strategic Statement ------------------------- 19 2.3 Retail / Commercial Development Strategy ------------------------------------------------ 21 2.4 Implications for retail growth ------------------------------------------------------------------ 22

3 Retail trends in Kingston ------------------------------------------------------------------------------ 23

3.1 Population and demographic trends -------------------------------------------------------- 23 3.2 Socio-economic profile ------------------------------------------------------------------------- 24 3.3 Retail floorspace growth ----------------------------------------------------------------------- 25

4 Trade Area Analysis ------------------------------------------------------------------------------------ 27

5 Centre competitiveness ------------------------------------------------------------------------------- 29

6 Retail floorspace requirements ---------------------------------------------------------------------- 32

6.1 Supply assessment ----------------------------------------------------------------------------- 32 6.2 Demand assessment --------------------------------------------------------------------------- 33 6.3 Retail floorspace requirement ----------------------------------------------------------------- 34

7 Recommendations ------------------------------------------------------------------------------------- 37

Appendix 1- Cheltenham Retail Audit ----------------------------------------------------------------------- 38


Executive summary

Key findings Subject to catchments defined by MacroPlan, Cheltenham Major Activity Centre will

have the opportunity to supply increased retail floorspace due to moderate growth in population and continued income growth.

The accommodation and capture of this increased demand will however be challenging as vacant sites for retail floorspace within the existing centres are generally limited.

The existing supply of retail floorspace in Cheltenham is below benchmark levels for Major Activity Centres elsewhere in Melbourne. More importantly, the mix of retail floorspace is biased towards convenience and food retailing with limited supply of non-food retail formats including Discount Department Stores.

The lack of non-food retailing in the Cheltenham Major Activity Centres assessed is due to a number of factors including:

Competition from Southland Principal Activity Centre

Competition from large bulky goods precincts (existing and planned)

Limited car parking within centre boundaries to accommodate expansions in non-food retailing (i.e. Kmart, Target, Big W)

It is likely therefore that most of the future expansions in retail floorspace will be in specialty retailing and food catering to meet the needs of populations with higher levels of disposable income and growing worker catchments.

Council should explore opportunities to increase Cheltenham’s catering offer through additional cafés and restaurants as well as continuing to foster employment growth within the Activity Centre. This would increase activity levels within the centre as well as providing a larger pool of retail expenditure for retail tenancies to capture.

MacroPlan has been commissioned by the City of Kingston to provide a retail economic analysis Cheltenham Major Activity Centre (MAC). This report provides an overall assessment of its current economic performance (including catchment definition) and some preliminary estimates of the likely additional demand for retail floorspace within the centre.

Locational context The City of Kingston is one of Melbourne’s bay side municipalities with one Principal Activity Centre, five Major Activity Centres (MACs) and a supporting network of Neighbourhood Centres and bulky goods retailing.

Cheltenham MAC is located along the Frankston railway line which runs roughly parallel to the Nepean Highway. The Centre is approximately 18kms south east of Melbourne CBD.

Literature review MacroPlan has reviewed planning and strategic documents pertaining to the role and function of Major Activity Centres within Kingston. The planning and strategic documents confirm the importance of Kingston’s Major Activity Centres in providing a mix of uses and employment to serve their local catchments while playing a supporting role to Principal Activity Centres.

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In particular, policy supports further growth in commercial floorspace within Cheltenham MAC. From a retail perspective, the subsequent increase in employment from future commercial floorspace expansion would increase worker spend. Therefore future growth in retail floorspace will depend increasingly on the worker expenditure pool and spend from beyond the defined retail catchment.

Retail in Kingston Between 2009 and 2031, Kingston’s population is expected to grow by 33,000 people at an average annual growth rate of 0.9%. Based on Kingston’s population growth, MacroPlan has estimated that an additional 82,500sqm of retail floorspace will be required between 2009 and 2031 as detailed in the following table.

It should be noted that the floorspace estimates are theoretical requirements and do not reflect what may physically be provided within Kingston.

Table 1. Kingston retail floorspace requirement, 2009-2031

Retail type 2009 2011 2016 2021 2026 2031 2009-2031 Population 144,556 147,520 154,831 162,150 169,255 177,543 32,987 Food retailing Supermarkets 57,822 59,008 61,932 64,860 67,702 71,017 13,195 Food retail specialties 28,911 29,504 30,966 32,430 33,851 35,509 6,597 Food catering 43,367 44,256 46,449 48,645 50,777 53,263 9,896 Total food 130,100 132,768 139,348 145,935 152,330 159,789 29,688 Non-Food retailing Dept. stores / DDS 43,367 44,256 46,449 48,645 50,777 53,263 9,896 Non-food specialties 57,822 59,008 61,932 64,860 67,702 71,017 13,195 Bulky goods 101,189 103,264 108,382 113,505 118,479 124,280 23,091 Total Non-food 202,378 206,528 216,763 227,010 236,957 248,560 46,182 Retail services Retail services specialties 28,911 29,504 30,966 32,430 33,851 35,509 6,597 Total retail floorspace 361,390 368,800 387,078 405,375 423,138 443,857 82,467 Source: MacroPlan Australia (2010).

Major Activity Centres will meet a portion of this demand but will also cater to retail needs of residents within the surrounding municipalities such as Bayside or Glen Eira. Currently, Cheltenham MAC supply approximately 10,000sqm of retail floorspace equating to 3% of the total demand generated in the LGA.

As part of the assessment of retail floorspace requirement for Cheltenham MAC, MacroPlan has:

Defined trade areas that the Centre will draw the majority of its trade

Assessed the competitiveness of the Centre

Estimated growth in population and expenditure pool within its respective trade areas based on the ABS Estimated Resident Population (ERP) and ABS customised population forecasts for the Department of Health and Ageing

Calculated total requirement for retail floorspace within the trade areas based on Retail Turnover Densities (RTD’s)

Assessed retail floorspace growth that could be provided within the Centre based on current market shares

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It should be noted that whilst there is demand for department store / DDS type retail floorspace, it is unlikely that such a format of retail floorspace can be accommodated within the Centre due to the volume of non-food retailing provided in bulky goods format along Nepean Highway and other larger retail centres (i.e. Southland Shopping Centre). Therefore it is likely that demand will leak to other larger retail centres or be met by non-food specialty stores.

Cheltenham’s Main Trade Area Cheltenham’s Main Trade Area is shown in the following figure. It extends approximately 2.5kms to the west and south of the centre but is significantly constrained to the north because of Southland shopping centre. Furthermore, its trade area is also physically constrained by golf courses and parklands to the west of the centre. The relatively small catchment is also compounded by the lack of a full-line supermarket within the Activity Centre which limits its ability to attract visitation from a wider catchment.

Figure 1. Cheltenham Main Trade Area

Source: MacroPlan Australia (2010).

Cheltenham’s Competitiveness MacroPlan has assessed the competitiveness of Cheltenham Activity Centre based on a range of economic and environmental indicators that help assess its performance as a Major Activity Centre (MAC). The indicators are broadly based on strategic policy directions and best practice relating to the role and function of a MAC. This initial assessment can be used as an input to Council’s decision making process in relation to future strategic planning strategies for the Centre.

For the purposes of this assessment, 9 indicators have been considered equating to a total possible score of 45. Applying this approach, a score of 23 is therefore a critical threshold. Below this, the future success of the centre without significant public or private investment is questionable. A score above 23 reflects an activity centre that will be successful in the market particularly from a retail perspective.

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The following table provides an interpretation of scores. It should be noted that the ratings are highly influenced by the centre’s retail performance. Therefore scores may not necessarily reflect the overall performance of the centre as a MAC. However it does provide an indication of a centre’s competitiveness from a retail-based perspective.


Table 2. Activity Centre assessment criteria

Characteristic

Total Score

Exemplar

The Activity Centre is a leading example with a diverse range of key competitive advantages and characteristics that together achieve success in the market. These advantages should continue to be emphasised and enhanced.

40 – 45

Successful

The Activity Centre performs well in a broad range of key indicators. While its current performance is good, there are a number of areas that can be improved. These can generally be readily rectified and improved through minor amendments and adjustments.

35 – 40

Positive

The Activity Centre is performing positively but has a range of areas of improvement. The centre has many key advantages that can facilitate further development as a MAC. While its development is constrained by a range of factors, the centre can improve its performance through strategic amendments and adjustments.

30 – 35

Marginal

The Activity Centre contains a range of positive and negative characteristics with overall performance being marginal. Development should focus on limiting the effects of its negative characteristics and aim to further nurture its positive characteristics.

23- 30

Testing The Activity Centre contains few key competitive advantages. Significant investment and strategies are required to transform the Activity Centre.

15 – 23

Challenging The Activity Centre contains little to no key competitive advantages. This will seriously inhibit its success in the market without significant public and private intervention.

5 – 15

Almost impossible The Activity Centre contains no key competitive advantages. This will prevent its success in the market. Its designation as an Activity Centre should be reconsidered.

0 – 5


MacroPlan’s assessment resulted in a total score for Cheltenham Activity Centre of 26 out of 45 placing it within the ‘Marginal’ assessment category. Its strength is in its high volume of jobs (2,370 jobs), however the centre is not maximising its retail potential and has a low provision of core retail floorspace with only around 10,000sqm. This relatively low supply indicates that he centre’s retail catchment is more in line with a Neighbourhood Activity Centre whereas its total employment is consistent with a MAC.

Cheltenham’s Retail Floorspace Requirement Between 2009 and 2031, Cheltenham’s Main Trade Area is expected to grow by an additional 3,546 people with the Primary Trade Area growing by 931 people. This equates to growth in the retail expenditure pool of $137 million to a total of $353 million by 2031.

Retail turnover densities (RTD) can be applied to retail expenditure to determine the retail floor space demand. For example, if the expenditure pool available for ‘Food and grocery’ is $75 million, based on a required RTD of $10,100/sqm, this equates to demand for approximately 7,300sqm of “Food and grocery” retail floorspace. The RTD’s used in this assessment are detailed in Table 14.

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Based on these RTD’s, an additional 12,700sqm of retail floorspace would be sustainable within the Main Trade Area by 2031 including an additional 1,800sqm in ‘Food and grocery’ floorspace. However, not all retail expenditure generated by residents within the Main Trade Area will be captured by Cheltenham Activity Centre. There will be some leakage of expenditure outside of the Main Trade Area by residents who spend money whilst working or travelling regionally.

Cheltenham Activity Centre is estimated to capture 29% of retail demand within its highly constrained Main Trade Area. In addition, some visitors and workers (approximately 2,400 workers) in Cheltenham who are not permanent residents spend money in the centre, driving demand for retail floorspace from beyond the Main Trade Area. Trade from beyond the Main Trade Area is assumed to be approximately 13% ($8.5 million) currently.

The following table details the total development potential of Cheltenham Activity Centre based on its current market shares. Between 2009 and 2031, an additional 3,400sqm of retail floorspace will be supportable within the Activity Centre. Of this requirement, 1,500sqm is comprised of food retailing (including 500sqm supermarket), 1,200sqm comprised of non-food retailing and 600sqm of retail services. However it is likely that demand for food retailing may be higher than estimated as further commercial floorspace is developed within the centre.

As the table shows, the additional food retailing demand of 1,000sqm (net of food catering) can be added to existing supply to justify a full-line supermarket in the centre. However, the lack of a full-line supermarket and competition from Mentone is currently constraining market shares.

Table 3. Cheltenham Activity Centre, development potential by retail format (sqm)

Retail format type 2009 2011 2016 2021 2026 2031 2009-2031 Food retailing Supermarket 500 543 650 760 865 971 471 Food retail specialties 1,575 1,595 1,644 1,694 1,742 1,789 214 Restaurants and cafés 2,375 2,453 2,650 2,854 3,042 3,231 856 Total Food 4,450 4,591 4,944 5,308 5,649 5,991 1,541 Non-Food retailing Dept. Stores / DDS 0 40 142 249 360 477 477 Non-food specialties 3,435 3,479 3,592 3,709 3,827 3,949 514 Bulky goods 255 274 325 378 434 494 239 Total Non-Food 3,690 3,793 4,059 4,336 4,621 4,920 1,230 Retail services Retail services specialties 1,955 2,011 2,152 2,297 2,434 2,571 616 Total retail 10,095 10,394 11,153 11,941 12,703 13,482 3,387


Other Issues to Consider Development of retail floorspace at Cheltenham is constrained due to its limited retail catchment being located only 500 metres south of Westfield Southland, one of Melbourne’s largest shopping centres (over 125,000sqm of retail floorspace). Furthermore, it is also located around 2kms away from the Mentone MAC.

Despite a constrained retail catchment, there is still potential for increased retail floorspace within Cheltenham. Additional demand for retail floorspace will largely be driven by its worker population and associated retail expenditure from workers. In particular, Cheltenham should continue to build on its catering offer in the form of cafés and restaurants that will provide, in addition to meeting the immediate retail needs of residents and workers, a ‘meeting place’ for business and leisure purposes.

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1.1.1 Centre competitiveness MacroPlan has assessed the competitiveness of Cheltenham MAC based on a range of economic, social and environmental indicators that help assess its performance as a Major Activity Centre. The indicators are broadly based on strategic policy directions in the role and function of a MAC as detailed in the following table.

Table 4. Centre competitiveness indicators

Indicator Description Statistical measurement

Economic

Economic Activity (jobs) Encourage economic activity, business

synergies and economies of agglomeration.

Number of jobs in centre

Economic Activity (population)

Primary Trade Area population.

Higher order commercial offer

Should provide for a mix of employment including higher order commercial for Major Activity Centres.

Number of commercial office jobs

Anchors and retail network

Should provide anchors (retail and non-retail) to support economic development

Number, size and type of anchors as well as total retail floorspace.

Social

Accessibility (within Centre) Improving accessibility within and to the

centre through walking, cycling and public transport to services and facilities.

Safe access for bicycles and pedestrian

Accessibility (to Centre)

Accessibility of railway station by pedestrians and cyclists

Higher residential density

Medium and higher density residential development should be encouraged.

Volume of higher density residential within the Activity Centre

Environmental

Optimise public transport networks

Should integrate public transport into everyday life. Public transport networks should generate activity and reduce environmental impacts

Journey to work profile

Reduce private vehicle trips

Reduce the number of private vehicle (car) trips to and from activity centres.

Journey to work profile


In this assessment, Activity Centres are awarded a score out of 5 against 9 performance indicators resulting in a total possible score of 45. Applying this approach, a score of 23 is therefore a critical threshold. Below this, the future success of the centre without significant public or private investment is questionable. The following table provides an interpretation of scores.

Employment and Journey to Work MacroPlan has assessed the number of jobs and journey to work profile of workers within the Activity Centres based on Transport Destination Zone boundaries (TDZ). It should be noted that TDZ do not necessarily align perfectly with Activity Centre boundaries but adjustments have been made to be as accurate as possible. The use of TDZ boundaries has been required to source 2006 Census statistics on employment profiles by industry category to provide input into the competitiveness of the centre.


Table 5. Activity Centre assessment criteria

Characteristic

Total Score

Exemplar

The Activity Centre is a leading example with a diverse range of key competitive advantages and characteristics that together achieve success in the market. These advantages should continue to be emphasised and enhanced.

40 – 45

Successful

The Activity Centre performs well in a broad range of key indicators. While its current performance is good, there are a number of areas that can be improved. These can generally be readily rectified and improved through minor amendments and adjustments.

35 – 40

Positive

The Activity Centre is performing positively but has a range of areas of improvement. The centre has many key advantages that can facilitate further development as a MAC. While its development is constrained by a range of factors, the centre can improve its performance through strategic amendments and adjustments.

30 – 35

Marginal

The Activity Centre contains a range of positive and negative characteristics with overall performance being marginal. Development should focus on limiting the effects of its negative characteristics and aim to further nurture its positive characteristics.

23- 30

Testing The Activity Centre contains few key competitive advantages. Significant investment and strategies are required to transform the Activity Centre.

15 – 23

Challenging The Activity Centre contains little to no key competitive advantages. This will seriously inhibit its success in the market without significant public and private intervention.

5 – 15

Almost impossible The Activity Centre contains no key competitive advantages. This will prevent its success in the market. Its designation as an Activity Centre should be reconsidered.

0 – 5


It should be noted that MacroPlan’s assessment of the Activity Centres against these indicators has been undertaken as an independent expert and there is an element of subjectivity. However, it is considered that MacroPlan’s assessment provides a general indication of the Activity Centres’ current strengths and weaknesses.

1.1.2 Retail floorspace requirements The retail needs assessment provides a forecast of retail floorspace growth required in Cheltenham if it were to perform as a Major Activity Centre within its defined catchment. Measuring retail demand is complex and limited by the availability of data industry wide. An expenditure / trade area based approach and use of economic modelling is widely accepted as the most appropriate measure for retail. This takes into consideration the role / performance of the centre and the likely growth in demand based on the centre’s ability to capture market share across the trade area. The methodology is summarised below.

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Figure 3. Retail needs assessment methodology

Defining trade area and forecasting population growth

Estimating current and future retail expenditure pool

Calculating retail floorspace demand in trade area

Retail floorspace demand

Source: Macr4oPlan Australia (2010).

Step 1: Defining the trade area and forecasting growth DEFINING THE TRADE AREA

A trade area is a geographical area from which the sub-regional centre will draw the majority of retail trade. The delineation of a trade area typically comprises a primary, secondary and in some circumstances tertiary trade area. Trade areas are defined by the following factors which are discrete to each retail centre including:

Existing retail role (i.e. a convenience based centre has the primary function of providing weekly convenience and limited higher order offer attracting the local community)

Site location, including the available road network and public transport system. This influences the ease of access and exposure to the development for the wider region.

Proximity and pattern of existing and potential competitors. The relative attraction of the centre compared to alternative competing centres is assessed according to the scale, composition, quality, size and diversity of retail services provided in those centres and stores, and

Physical barriers, such as lakes, railways and freeways can affect the size and composition of trade catchments.

MacroPlan has assessed the trade area from the Census Collection District (CCD) level to assess existing population and forecast future growth from this small-area level.

FORECASTING GROWTH

Aside from the changing patterns of retail expenditure, driven primarily by cyclical macro-economic conditions and changing consumer preferences, the most influential factor determining the quantum of available retail demand is trade area population.

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In the trade area, population growth is primarily driven by new household development and increasing housing densities. As such, the validation of population forecasts is based upon estimated future residential development. MacroPlan has based its household and population growth forecasts, on a range of information sources including:

Latest trends in population growth using ABS Regional Population (Cat. No. 3218.0)

ABS Census of Population and Housing (2006)

Victoria in Future population projections (2008)

ABS population projections prepared for the Department of Health and Ageing (2008)

The Victoria in Future population projections have lagged behind latest trends in population growth for Kingston and appear to underestimate actual growth. Therefore, MacroPlan has adopted population growth rates from the ABS population projections as they are more reflective of recent trends in population growth.

Step 2: Estimating the current and future retail expenditure pool Trade area expenditure is directly correlated to the socio-economic circumstances of a given location. Expenditure information is derived from the Household Expenditure Survey (HES) conducted by the ABS and the MarketInfo database.

MarketInfo is an independent consultancy used by a number of retail economists to derive accurate retail expenditure data at a Census Collection District (CCD) level in Australia. MarketInfo has developed a micro-simulation technique that utilises over 40 socio-economic variables in each CCD to produce accurate retail expenditure results.

Estimates of expenditure are then linked to population forecasts within the defined catchment to build a forecasted expenditure pool. The growth in the expenditure pool provides an indication of what the net additional demand for retail floorspace will be from 2009 onwards. In broad terms this assumes that the current demand and supply equation is in balance and that additional growth in floorspace should be in line with growth in the expenditure pool.

In reality however there are some gaps in supply demonstrated by above-average trading performance or lack of certain retail formats (i.e. full-line supermarket). However this is addressed through consideration of other benchmarks including comparisons with a complementary retail floorspace per capita analysis which acts as a ‘check’ to overall conclusions of retail demand.

Step 3: Conversion to retail floorspace demand Demand for retail floor space is determined by converting the retail expenditure into retail floor space. Retail turnover densities (RTD) can be applied to retail expenditure to determine the retail floor space demand. Estimates of RTD’s by retail store type have been based on ABS and other surveys on retail performance as well as MacroPlan’s experience in the retail sector.

Step 4: Retail floorspace demand by centre MacroPlan has assessed the development potential of the Activity Centre based on its current market shares derived from existing retail supply levels and competition from other centres. The competitive framework that the centre operates in will impact on its market shares and future growth. For example, if a retail centre faces competition from a number of other retail centres, it is likely that market shares will be low within its trade area.

In this retail needs assessment, MacroPlan has assumed static market shares for the Activity Centre which provides a ‘status quo’ performance base to compare potential increases in retail.

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1.1.3 Consideration of constraints MacroPlan acknowledges that Activity Centres may not necessarily be able to accommodate all of the retail floorspace growth required due to land constraints, planning intentions and other market factors (i.e. financing difficulties, developer attraction, etc.). As a result estimate of retail floorspace accommodated within the Activity Centre will need to consider these constraints to ascertain a realistic level of retail floorspace that could be delivered.

Assessment of structure plans, previous consultancy reports and discussions with key stakeholders and Council will provide the basis for this assessment.

1.2 Locational context The City of Kingston is one of Melbourne’s bay side municipalities with one Principal Activity Centre, five Major Activity Centres and a supporting network of Neighbourhood Centres and bulky goods retailing. This Study will review the performance and retail growth of Cheltenham Major Activity Centre.

The Centre is located along the Frankston railway line which runs roughly parallel to the Nepean Highway. Cheltenham Activity Centre is approximately 18kms south east of Melbourne CBD.


Figure 4. Locational context


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1.3 Information sources This report draws on a wide range of information sources. The more important information sources include:

Census of Population and Housing, Australian Bureau of Statistics (2006),

Australian Bureau of Statistics customised journey to work (JTW) and demographic data sets (2006),

Australian Bureau of Statistics population projections prepared for the Department of Health and Ageing (2008),

Victoria in Future population projections (2008),

Cordell Connect construction projects database (2009);

Melbourne 2030, Department of Sustainability and Environment (2002);

MarketInfo retail expenditure database (2006);

Shopping Centre Directory, Property Council of Australia (2009);

Site visits by MacroPlan Australia,

Relevant experience throughout Victoria and Australia, with particular reference to property research and economic analysis including expertise in socio-economic profiles, area trends, and recent market performance.

1.4 Abbreviations The following abbreviations are used in this report

ABS Australian Bureau of Statistics

BTA Beyond Trade Area

CBD Central Business District

CCD Census Collection District

DDS Discount Department Store

DPCD Department of Planning and Community Development

DSE Department of Sustainability and Environment

LGA Local Government Area

MAC Major Activity Centre

MSS Municipal Strategic Statement

MTA Main Trade Area

PTA Primary Trade Area

RTD Retail Turnover Density

SLA Statistical Local Area

STA Secondary Trade Area

TBL Triple Bottom Line

VIF Victoria in Future

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2 Literature review MacroPlan has reviewed planning and strategic documents pertaining to the role and function of Major Activity Centres within Kingston particularly of Cheltenham Activity Centre. This provides the basis for policy recommendations regarding future retail floorspace growth within these Activity Centres.

2.1 Melbourne 2030 & Melbourne @ 5 Million Melbourne in the last decade has experienced significant expansion stimulated by high levels of population growth through in-migration, along with positive economic performance and high comparative levels of housing affordability in comparison with other Australian cities. Moreover, Melbourne’s liveability is a key driver of its attractiveness to people seeking to take up residence.

2.1.1 Melbourne 2030 Melbourne 2030 is a strategic plan developed by the Victorian State Government’s Department of Sustainability and Environment (DSE) to manage growth and change across Melbourne and the surrounding region. This strategy aims to strategically deliver the most liveable, attractive and prosperous area in the world for residents, business and visitors.

Melbourne 2030 allows for further urban development contained through designated growth areas as well as identifies a comprehensive network of activity centres. This network will comprise of a range of centres of varying size and function that are linked with a strategic public transport network.

The original Melbourne 2030 population forecast is expected to be passed by 2020 with Melbourne’s population anticipated to reach 5 million by 2030. This has led to the preparation of Melbourne @ 5 Million to take into consideration revised population forecasts.

2.1.2 Melbourne @ 5 Million Melbourne @ 5 Million is a complimentary document to Melbourne 2030. It is designed to assist in accommodating greater levels of population growth than expected in 2002. It aims to accommodate 53% of new dwellings in established areas, which is assisted with the introduction of 6 new Central Activity Districts.

Melbourne @ 5 Million recognises that managing this growth and change will be important to maintaining Melbourne’s competitiveness and future liveability. Through Melbourne @ 5 Million, the Victorian Government seeks to manage Melbourne’s growth for the next 20 years through a network of Activity Centres as defined in the following table.


Table 6. Activity Centre classifications

Classification Key characteristics

Central Activities District (CAD)

Metropolitan Melbourne’s largest centre of activity with the greatest variety of uses and functions and the most intense concentration of development

Provides services and functions such as commercial, retail, highly specialised personal services, education, government and tourism

Principal Activity Centre (PAC)

A mix of activities that generated high numbers of trips, including business, retail, services and entertainment

Being generally well served by multiple public transport routes or capable of being linked to public transport networks

Major Activity Centre (MAC)

Similar characteristics to Principal Activity Centres but serves a smaller catchment area

Supplements the network of Principal Activity Centres Provides additional scope to accommodate ongoing investment and

change in retail, office, service and residential markets

Specialised Activity Centre (SAC)

Important economic precinct that plays a vital role in metropolitan Melbourne’s economy

Provides a mix of economic activities that generate employment and visitor trips

Neighbourhood Activity Centre (NAC)

Generally, a limited mix of uses meeting local convenience needs Generally less than 10,000sqm of retail floorspace Accessibility to a viable user population by walking / cycling Accessibility by local bus services and public transport links to one or

more Principal or Major Activity Centres Important community focal point, ideally close to schools, libraries,

childcare, health services, police stations and other facilities that benefit from good public transport

Source: DSE Melbourne 2030 (2002).

The classification defines the role and function of centres, including preferred uses, scale of development and links to the public transport system. Of particular importance to this study is the performance of Cheltenham Major Activity Centre.

2.2 Kingston Planning Scheme – Municipal Strategic Statement The Kingston Planning Scheme incorporates the policy directions of Melbourne 2030 and encourages the orderly development of retail and commercial land use within key Activity Centres. This is addressed in Clause 21.06 of the Municipal Strategic Statement (MSS).

The MSS acknowledges that there have been recent changes in the nature of retailing activity within Kingston particularly in the development of bulky goods retailing and other out-of-centre retail formats. Therefore the focus of the MSS regarding retail is in monitoring this out-of-centre development while fostering Kingston’s Activity Centre hierarchy as reflected in the following objectives:

To protect and strengthen the hierarchy of activity centres within Kingston

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To reinforce the existing role of the Southland Principal Activity Centre complemented by the adjacent Cheltenham Major Activity Centre as the predominant regional focus for retail activity and for entertainment, community, professional services and business services

To reinforce the different built form character and function of activity centres consistent with their position in the activity centre hierarchy

To effectively respond to the evolving nature of the commercial (office) market

To provide for the long term sustainability of Kingston’s restricted retail (bulky goods) precincts

To encourage smaller local areas which are not identified in the Kingston Activity Centre Hierarchy to provide for a limited mix of uses which are complementary to local function of that centre

The MSS also provides specific guidance regarding the role and development of Kingston’s Major Activity Centres. Kingston’s Activity Centre hierarchy is detailed in the following map.

According to the MSS, the role of Cheltenham Activity Centre is to provide a sizeable employment base through large and strata commercial floorspace space. It will also cater for many local convenience needs.

To ensure Cheltenham Activity Centre performs this role, the MSS has identified the following strategic directions in its development:

Diversify the mix of uses within the centre, particularly on the centre’s periphery

Reinforce ‘restricted retailing’ (bulky goods) role along Nepean Highway

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Figure 5. Kingston’s Activity Centre hierarchy

Source: Kingston Planning Scheme (2009).

2.3 Retail / Commercial Development Strategy Kingston’s Retail / Commercial Development Strategy was prepared by Charter Keck Cramer and Hansen Partnership in 2006 to provide guidance in the future direction of retail, commercial and office investment in the City of Kingston.

The Strategy notes that a centre’s classification as a Major Activity Centre did not directly correlate with levels of retail activity. In particular, retail activity in Cheltenham Major Activity Centre is considered to be more in line with a Neighbourhood Centre although it has substantially higher volumes of commercial floorspace than other centres within Kingston.

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Although the Strategy provides strategic direction for Kingston’s Activity Centres, it does not quantify retail and commercial uses within each centre. However, it does present a number of existing strengths and issues of each Activity Centre that would require consideration in estimates for growth in retail floorspace.

The Strategy provides a strategic assessment of Cheltenham Activity Centre based on its strengths, weaknesses and future opportunities. Its key strengths are in its public transport accessibility, mixed use nature and redevelopment opportunities. However, it also has a number of constraints including limited trading hours of shops, fragmentation and increasing competition from bulky goods and other non-retail developments.

The Strategy expects the centre to continue to provide convenience retailing catering mainly for passing trade along Charman Road and its worker population. As the centre has a sizeable worker population, there is also a potential for retail that would cater to professional with higher disposable incomes.

The main strategic initiatives pertaining to Cheltenham’s growth as a centre are summarised in the following:

Facilitate intensification of a mix of new uses within the centre over time. This would require the prioritisation of particular uses within the centre and the creation of opportunities for a mix of uses through more appropriate zoning.

Redefine the ‘edges’ of the centre to limit fragmentation. This could be addressed with a review of land uses around the centre’s periphery.

Facilitate better connections to social infrastructure. In particular, the library could be better integrated to the core of the centre.

Intensification of commercial and higher density residential along Nepean Highway.

2.4 Implications for retail growth The planning and strategic documents confirm the importance of Kingston’s Major Activity Centres in providing a mix of uses and employment to its catchment area while playing a supporting role to Principal Activity Centres.

Policy supports further growth in commercial floorspace within Cheltenham Activity Centre. From a retail perspective, the subsequent increase in employment from future commercial floorspace expansion would increase worker spend. Therefore future growth in retail floorspace will depend increasingly on the worker expenditure and spend from beyond the defined retail catchment.

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3 Retail trends in Kingston MacroPlan has assessed demand for retail floorspace for the broader Kingston LGA. This has been based on a retail floorspace per capita analysis and national supply benchmarks provide an indication of the size of the retail market within Kingston. Major Activity Centres will meet a portion of this demand but will also cater to retail needs of residents within the surrounding municipalities such as Bayside or Glen Eira.

3.1 Population and demographic trends Kingston’s population has grown moderately from 139,796 people in 2006 to a current population of 143,727 people (average annual growth rate of 1.4%). There are a number of population projections for Kingston as detailed in the following graph:

Figure 6. Kingston population growth, 2006-2026

Source: Victoria in Future (2008), ForecastID (2002), ABS Regional Population Growth (Cat. No. 3218.0, 2009), ABS population projections (2009).

ForecastID population projections were based on the 2001 ABS Census of Population and Housing and are therefore relatively outdated compared to the other population projections that were based on the 2006 Census.

Victoria in Future’s population projections have lagged behind current growth in population and appeared to understate population growth within Kingston. Victoria in Future had projected Kingston’s population in 2008 to be 142,659 people while 2008 population according to the ABS is estimated to be 143,727 people1. Therefore, MacroPlan has adopted growth rates of the ABS population projections for the assessment of demand for retail floorspace. The following table details population growth within Kingston as adopted in this Study:

0

20,000

40,000

60,000

80,000

100,000

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

120,000

140,000

160,000

180,000

VIF ABS Forecast ID ABS Regional Population Growth

Table 7. Kingston population growth, 2009 - 2031

Cheltenham Activity Centre 2009 2011 2016 2021 2026 2031 2009 - 2031 Kingston LGA 144,556 147,520 154,831 162,150 169,255 176,401 31,845 Average annual growth rate 1.0% 1.0% 0.9% 0.9% 0.8% 0.9%

Source: ABS population projections (2008).

1 Based on Estimated Resident Population statistics (ABS Cat. No. 3218.0)

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3.2 Socio-economic profile The following table summarises the key characteristics of the resident population of Cheltenham suburb and Kingston LGA compared to surrounding LGAs and the Melbourne Metropolitan area based on the 2006 ABS Census of Population and Housing:

Table 8. Cheltenham / Kingston socio-economic profile, 2006

Cheltenham

Suburb Kingston

LGA Bayside

LGA Glen Eira

LGA Metropolitan Melbourne

Population and Households

Persons 19,523 134,634 87,932 124,121 3,592,645

Households 7,968 50,729 32,148 47,660 1,283,218

Income and Wealth

Median Individual Income $25,220 $25,648 $33,284 $28,794 $25,012

variation from Metropolitan Melbourne 1% 3% 33% 15% -

Median Household Income $54,080 $54,583 $78,375 $59,886 $56,108

variation from Metropolitan Melbourne -4% -3% 40% 7% -

Occupation

White Collar 53% 51% 69% 64% 52%

Blue Collar 27% 30% 14% 18% 29%

Service Sector 20% 19% 18% 18% 19%

Age Distribution

0-4 years 6% 6% 6% 6% 6%

5-14 years 11% 12% 13% 11% 13%

15-24 years 11% 12% 11% 12% 14%

25-54 years 41% 43% 40% 44% 44%

55-64 years 11% 11% 12% 10% 10%

65-74 years 9% 8% 7% 7% 7%

75+ years 11% 8% 10% 9% 6%

Family Types

Couple family with children 44% 48% 51% 48% 48%

Couple family without children 38% 36% 35% 36% 34%

One parent family 15% 15% 13% 13% 15%

Other family 2% 2% 1% 3% 2%

Household Types

Family Household 68% 70% 72% 65% 72%

Non Family Household 32% 30% 28% 35% 28%

Average Household Size 2.5 2.7 2.7 2.6 2.8

Tenure Type

Owner 43% 39% 44% 38% 36%

Purchaser 34% 37% 34% 32% 37%

Renter 23% 23% 21% 30% 26%

Other 1% 1% 0% 1% 1%

Dwelling Type

Separate House 67% 69% 70% 59% 73%

Semi-detached 15% 15% 16% 14% 11%

Flat, Unit, Apartment 17% 15% 14% 26% 15%

Other 0% 1% 1% 0% 1%

Birthplace

Australia 76% 65% 72% 61% 64%

Overseas 24% 35% 28% 39% 36%

Source: ABS Census of Population and Housing (2006).

Note: Some figures may not total due to rounding.

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Key characteristics are as follows:

Median household incomes in Cheltenham suburb ($54,080) and Kingston LGA ($54,583) are slightly lower than in Metropolitan Melbourne ($56,108) and other benchmark areas. However individual incomes within Cheltenham suburb ($25,220) and Kingston LGA ($25,648) are slightly higher than in Metropolitan Melbourne ($25,012) although lower than in Bayside LGA ($33,284) and Glen Eira LGA ($28,794).

Occupational breakdown of residents within Cheltenham suburb and Kingston LGA are in line with Metropolitan Melbourne but have lower proportions of white collar workers (i.e. managers, professionals, clerical administration, etc.) and higher proportions of blue collar workers (i.e. labourers, machinery operators, etc.) than in Bayside LGA and Glen Eira LGA.

Analysis of the age distribution of Cheltenham suburb and Kingston LGA reveals a higher proportion of residents aged 65 years and over than Metropolitan Melbourne which is in line with Bayside LGA and Glen Eira LGA.

The family composition of residents within Cheltenham suburb (38%) and Kingston LGA (36%) reveal higher proportions of couple families without children (34%).

Average household sizes in Cheltenham suburb (2.5 persons) and Kingston LGA (2.7 persons) are smaller than in Metropolitan Melbourne (2.8 persons)

Household types in Cheltenham suburb (68%) and Kingston LGA (70%) reveal lower proportions of ‘Family Households’ than Metropolitan Melbourne (72%)

Tenure types within Cheltenham suburb (43%) and Kingston LGA (39%) reveal higher proportions of home owners compared to Metropolitan Melbourne (36%)

Cheltenham suburb (67%) and Kingston LGA (69%) have lower proportions of ‘Separate House’ dwellings than in Metropolitan Melbourne (73%).

The socio-economic characteristics of Cheltenham suburb and broader Kingston LGA reveal a relatively older population with higher proportions of couple families without children. The socio-economic characteristic of Kingston are in line with Metropolitan Melbourne are similar to other metropolitan LGAs within Melbourne where there are higher proportions of residents of retirement age (i.e. aged over 65 years).

3.3 Retail floorspace growth Based on Kingston’s population growth, MacroPlan has estimated that an additional 82,500sqm of retail floorspace will be required between 2009 and 2031. Of this requirement, approximately 29,700sqm is in food retailing, 46,200sqm in non-food retailing and 6,600sqm in retail services. The following table details the breakdown of this requirement.


Table 9. Kingston retail floorspace requirement, 2010-2031

Retail type 2009 2011 2016 2021 2026 2031 2009-2031 Population 144,556 147,520 154,831 162,150 169,255 177,543 32,987 Food retailing Supermarkets 57,822 59,008 61,932 64,860 67,702 71,017 13,195 Food retail specialties 28,911 29,504 30,966 32,430 33,851 35,509 6,598 Food catering 43,367 44,256 46,449 48,645 50,777 53,263 9,896 Total food 130,100 132,768 139,347 145,935 152,330 159,789 29,689 Non-Food retailing Dept. stores / DDS 43,367 44,256 46,449 48,645 50,777 53,263 9,896 Non-food specialties 57,822 59,008 61,932 64,860 67,702 71,017 13,195 Bulky goods 101,189 103,264 108,382 113,505 118,479 124,280 23,091 Total Non-food 202,378 206,528 216,763 227,010 236,958 248,560 46,182 Retail services Retail services specialties 28,911 29,504 30,966 32,430 33,851 35,509 6,598 Total retail floorspace 361,389 368,800 387,076 405,375 423,139 443,858 82,469 Source: MacroPlan Australia (2010).

Therefore the table confirms broadly that across Kingston, additional demand will equate to:

4 to 5 full-line supermarkets

At least two additional Discount Department Stores

An additional 20,000sqm of bulky goods (however Kingston already has a likely over-supply of this retail format relative to population)

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4 Trade Area Analysis The Main Trade Area (MTA) extends approximately 2.5kms to the west and south of the centre but is significantly constrained to the north because of Southland shopping centre. Furthermore, its Main Trade Area is also physically constrained by golf courses and parklands to the west of the centre.

The relatively small catchment is also compounded by the lack of a full-line supermarket within the Activity Centre which limits its ability to attract high visitation levels. Cheltenham Activity Centre’s Main Trade Area is shown in the following map.


Figure 7. Cheltenham retail catchment


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5 Centre competitiveness MacroPlan has assessed the competitiveness of Cheltenham Activity Centre to identify its strengths and weaknesses in relation to its performance as a ‘Major Activity Centre’ (MAC). The performance of a MAC is based on policy objectives and Triple Bottom Line outcomes (TBL) and compared against other MACs as detailed in Section 1.1.1.

MacroPlan’s assessment resulted in a total score for Cheltenham Activity Centre of 26 out of 45 with all bottom lines (economic, social, environmental) performing moderately above average. This places Cheltenham Activity Centre within the ‘Marginal’ assessment category – above the critical 23 point threshold. This indicates that the centre is currently performing slightly above other Major Activity Centres but can improve in a number of areas.

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Table 10. Cheltenham Activity Centre competitiveness

(score out of 5) Score Comments Economic indicator Economic activity - Number of jobs 3.9 2,370 jobs

Economic activity - Population catchment 1.2 4,068 people in Primary Trade Area and 11,422

people in Secondary Trade Area Higher order commercial offer 4.1 25% of total jobs

Anchors and retail network 2.0 Anchored by Foodworks with total retail of 10,075sqm

Social indicator

Accessibility - within centre 3.0

Bicycle lanes finish on outskirts of centre, laneways able to be used by pedestrians; signalized

pedestrian crossing on Charman Road, limited access through shops to car park areas; amenity is

good

Accessibility - to the centre 4.0

Major railway station; bus stops scattered throughout centre, taxi rank next to station and car

parking available at rear of shops and railway, bicycle lanes on some roads into centre although congestion occurs on Charman Road with railway

Existing higher residential density 0.8 Very limited shop top housing scattered on

Charman Road and Park Road Environmental indicator Optimise public transport networks 3.8 15% of journey to work trips in Primary Trade Area

are via public transport

Reduce private vehicle trips 2.9 77% of journey to work trips in Primary Trade Area are solely by car

Triple Bottom Line

Economic 11.2 Performs well with high economic activity and high

levels of commercial and government services. However, its retail provision is limited.

Social 7.8

Accessibility is good with its main issue relating to Railway Road. Although there is very limited existing

shop top housing within the centre, there is opportunity to provide increased density.

Environmental 6.7 Use of public transport and private vehicles is relatively in line with other Major Activity Centres.

Activity Centre Rating 26

MARGINAL: The Activity Centre contains a range of positive and negative characteristics with overall

performance being marginal. Development should focus on limiting the effects of its negative

characteristics and aim to further nurture its positive characteristics.


As highlighted in the previous table, Cheltenham Activity Centre performs marginally as a Major Activity Centre (MAC). Its key strength is in the high number of jobs within its boundary with the centre having highest number of jobs compared to the other Activity Centres. However, the centre is not maximising its retail potential and has the lowest provision of core retail floorspace with only around 10,000sqm.

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It should be noted that whilst its performance is rated ‘Marginal’, it does not necessarily mean that its overall performance as a MAC is significantly lacking. However from a retail perspective, its retail catchment is significantly constrained with significant competition from Southland Shopping Centre and bulky goods along Nepean Highway drawing much of the non-food expenditure pool out of the Activity Centre.

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6 Retail floorspace requirements As part of the assessment of retail floorspace requirement for Cheltenham Activity Centre, MacroPlan has:

Defined a Main Trade Area2 that the centre will draw the majority of its trade (see Figure 7)

Estimated growth in population and expenditure pool within its Main Trade Area

Calculated total requirement for retail floorspace within the trade (area) based on Retail Turnover Densities (RTD’s)

Assessed retail floorspace growth that could be provided within the Activity Centre based on current market shares

6.1 Supply assessment Existing supply within Cheltenham Activity Centre is estimated at 10,000sqm of which 4,500sqm comprises of food retailing floorspace. The Centre’s only supermarket is Foodworks Cheltenham on Station Rd of around 500sqm.

Table 11. Existing supply (sqm), Cheltenham Activity Centre

Retail format type Cheltenham Food retailing Supermarket 500 Food retail specialties 1,575 Food catering 2,375 Total food 4,450 Non-Food retailing Dept. Stores / DDS 0 Non-food specialties 3,435 Bulky goods 255 Total Non-food 3,690 Retail services Retail services specialties 1,955 Total retail 10,095


The majority of retail supply within the Main Trade Area is within Southland Shopping Centre. Southland Shopping Centre is located on 1239 Nepean Highway and has approximately 126,000sqm of retail floorspace anchored by three supermarkets (5,100sqm of Coles, 4,246sqm Woolworths, and 850sqm Aldi), two Department Stores (16,078sqm Myer and 14,962sqm David Jones), three Discount Department Stores (8,940sqm Target, 8,179sqm Big W and 7,568sqm Kmart) and several Mini-Majors.

In addition, there’s approximately 1,500sqm of street retail floorspace within the Main Trade Area of which the main supermarkets are:

Dang’s IGA on Follett Rd, Cheltenham East (350sqm)

Foodworks Beaumaris on Balcombe Rd, Beaumaris (400sqm)

2 Main Trade Area comprises of the Primary Trade Area and the Secondary Trade Area(s).

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6.2 Demand assessment The demand assessment for Cheltenham Activity Centre will be based on demand generated by residents within its Main Trade Area defined previously.

6.2.1 Population growth The following table details expected population growth for Cheltenham’s Main Trade Area. Between 2009 and 2031, the Main Trade Area is expected to grow by an additional 3,546 people with the Primary Trade Area growing by 931 people.

Table 12. Cheltenham trade area population forecast, 2009 - 2031

Cheltenham Activity Centre 2009 2011 2016 2021 2026 2031 2009 - 2031 Primary Trade Area 4,228 4,314 4,528 4,742 4,950 5,159 931 Secondary Trade Area 11,871 12,114 12,714 13,315 13,899 14,486 2,615 Main Trade Area 16,099 16,428 17,242 18,057 18,849 19,645 3,546 Kingston LGA 144,556 147,520 154,831 162,150 169,255 176,401 31,845 Source: MacroPlan Australia (2009), ABS population projections (2008).

6.2.2 Retail expenditure pool The potential for future sustainable retail development within the Main Trade Area can be expected to increase in future years as a result of the following factors:

Real growth in retail expenditure, which indicates increased propensity of retail consumption above inflation3;

Population and household growth in the region; and

Opportunities to reduce escape expenditure to retailers beyond the Main Trade Area thus increasing the share of expenditure that is captured by the centre.

The retail expenditure pool available for Cheltenham Activity Centre is summarised in the following table. Between 2009 and 2031, the retail expenditure pool is expected to increase by $137 million to a total of $353 million by 2031.

Table 13. Cheltenham resident retail expenditure pool, $m

2009 2011 2016 2021 2026 2031 2009-2031 Food and Grocery $73.77 $76.95 $85.30 $94.36 $104.03 $114.52 $40.75 Catering (Restaurant and Café) $32.00 $33.38 $37.01 $40.93 $45.13 $49.68 $17.68 Bottle-shop $9.67 $10.09 $11.18 $12.37 $13.64 $15.01 $5.34 Clothing and Accessories $22.81 $23.79 $26.37 $29.17 $32.16 $35.40 $12.60 Newsagent and Chemist $16.23 $16.93 $18.77 $20.76 $22.88 $25.19 $8.96 Sports and Hobbies $7.14 $7.45 $8.26 $9.13 $10.07 $11.09 $3.94 Services $8.43 $8.79 $9.75 $10.78 $11.89 $13.09 $4.66 Furniture and White goods $15.31 $16.39 $19.36 $22.83 $26.83 $31.49 $16.17 Electrical $10.70 $11.45 $13.53 $15.95 $18.74 $21.99 $11.30 Houseware and Softgoods $7.10 $7.60 $8.98 $10.59 $12.45 $14.61 $7.50 Hardware $7.65 $8.19 $9.67 $11.41 $13.41 $15.73 $8.08 Total resident expenditure $210.82 $221.00 $248.18 $278.29 $311.24 $347.80 $136.98

Source: MacroPlan Australia (2009), MarketInfo (2006).

3 A historical estimate of real growth in retail expenditure is based on an analysis of the ABS Retail Trade publication. Real growth in retail expenditure has been estimated at 1.1% per annum.

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6.3 Retail floorspace requirement Retail turnover densities (RTD) can be applied to retail expenditure to determine the retail floor space demand. For example, if the expenditure pool available for ‘Food and grocery’ is $75 million, based on a RTD of $10,100/sqm, this equates to demand for approximately 7,300sqm of retail floorspace.

The table below presents the RTD levels, by retail expenditure category, used to estimate retail floor space demand. These are based on the ABS and other surveys of retail performance as well as MacroPlan’s experience in the retail sector.

Table 14. Retail turnover densities, 2009

$/sqm Food and Grocery $10,100 Catering (Restaurant and Café) $5,300 Bottle-shop $16,000 Clothing and Accessories $4,200 Newsagent and Chemist $8,500 Sports and Hobbies $4,300 Services $4,300 Furniture and White goods $3,000 Electrical $9,000 Houseware and Softgoods $5,800 Hardware $3,000


Based on these RTD’s, the following table summarises the level of retail floorspace demanded within the Main Trade Area (sustainable retail floorspace). An additional 12,700sqm of retail floorspace would be sustainable within the Main Trade Area by 2031 including an additional 1,800sqm in ‘Food and grocery’ floorspace.

Table 15. Cheltenham sustainable retail floorspace (sqm)

2009 2011 2016 2021 2026 2031 2009-2031 Food and Grocery 7,304 7,469 7,878 8,291 8,697 9,109 1,805 Food catering 6,038 6,174 6,512 6,854 7,190 7,531 1,492 Bottle-shop 604 618 652 686 720 754 149 Clothing and Accessories 5,430 5,552 5,856 6,163 6,465 6,772 1,342 Newsagent and Chemist 1,909 1,952 2,059 2,167 2,273 2,381 472 Sports and Hobbies 1,661 1,698 1,791 1,885 1,978 2,071 410 Services 1,961 2,005 2,115 2,226 2,335 2,445 485 Furniture and White goods 5,105 5,355 6,021 6,755 7,553 8,433 3,328 Electrical 1,189 1,247 1,402 1,573 1,759 1,963 775 Houseware and Softgoods 1,225 1,285 1,445 1,621 1,812 2,023 799 Hardware 2,550 2,675 3,008 3,374 3,773 4,213 1,663 Total 34,976 36,030 38,738 41,595 44,555 47,696 12,720


6.3.1 Development potential Not all retail expenditure generated by residents within the Main Trade Area will be captured by Cheltenham Activity Centre. There will be some leakage of expenditure outside of the Main Trade Area by residents who spend money whilst working or travelling regionally.

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However, given the significant retail offer in Southland and the lack of a full-line supermarket the majority of expenditure generated by permanent residents is assumed to be captured by retailers beyond the Main Trade Area. This level of retained expenditure is assumed to be 29% across all retail expenditure categories within this constrained Main Trade Area.

In addition, some visitors and workers (approximately 2,400 workers) in Cheltenham who are not permanent residents will spend money in the centre, driving demand for retail floorspace from beyond the Main Trade Area. Trade from beyond the Main Trade Area is assumed to be approximately 13%4 currently.

The following table details the total development potential of Cheltenham Activity Centre based on its current market shares. Between 2009 and 2031, an additional 3,400sqm of retail floorspace will be supportable within the Activity Centre.

Table 16. Cheltenham Activity Centre, development potential (sqm)

2009 2011 2016 2021 2026 2031 2009-2031 Food and Grocery 1,705 1,753 1,875 2,001 2,119 2,238 533 Catering (Restaurant and Café) 2,375 2,453 2,650 2,854 3,042 3,231 856 Bottle-shop 370 380 405 430 455 479 109 Clothing and Accessories 1,025 1,049 1,108 1,167 1,225 1,285 260 Newsagent and Chemist 980 1,003 1,059 1,116 1,172 1,228 248 Sports and Hobbies 860 880 929 979 1,028 1,078 218 Services 1,955 2,011 2,152 2,297 2,434 2,571 616 Furniture and White goods 0 0 0 0 0 0 0 Electrical 255 268 302 339 380 424 169 Houseware and Softgoods 570 598 674 758 848 948 378 Hardware 0 0 0 0 0 0 0 Total 10,095 10,394 11,153 11,941 12,703 13,482 3,387


MacroPlan has converted development potential estimated previously into retail formats to assist Council in understanding the development implications of this demand. The following table details the demand for retail floorspace by retail format.

Table 17. Cheltenham Activity Centre, development potential by retail format (sqm)

Retail format type 2009 2011 2016 2021 2026 2031 2009-2031 Food retailing Supermarket 500 543 650 760 865 971 471 Food retail specialties 1,575 1,595 1,644 1,694 1,742 1,789 214 Restaurants and cafés 2,375 2,453 2,650 2,854 3,042 3,231 856 Total Food 4,450 4,590 4,943 5,308 5,649 5,992 1,542 Non-Food retailing Dept. Stores / DDS 0 40 142 249 360 477 477 Non-food specialties 3,435 3,479 3,592 3,709 3,827 3,949 514 Bulky goods 255 274 325 378 434 494 239 Total Non-Food 3,690 3,794 4,058 4,336 4,620 4,920 1,230 Retail services Retail services specialties 1,955 2,011 2,152 2,297 2,434 2,571 616 Total retail 10,095 10,394 11,153 11,941 12,703 13,482 3,387


4 Worker expenditure is estimated at $8.5million per annum.

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Of the 3,400sqm of retail floorspace required within the Activity Centre, 1,500sqm comprised of food retailing (including 500sqm supermarket), 1,200sqm comprised of non-food retailing and 600sqm of retail services. However it is likely that demand for food retailing may be higher than estimated as further commercial floorspace is developed within the centre.

It should be noted that whilst there is demand for department store / DDS type retail floorspace, it is unlikely that such format of retail can be accommodated within Cheltenham Activity Centre due to its proximity to Southland Shopping Centre. Therefore it is likely that demand will leak to other larger retail centres or met by non-food specialty stores.

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7 Recommendations Development of retail floorspace at Cheltenham is constrained due to its limited retail catchment. It is located approximately 500 metres south of Westfield Southland, one of Melbourne’s largest shopping centres, with over 125,000sqm of retail floorspace. Furthermore, it is also located around 2kms away from the Mentone MAC.

Despite a constrained retail catchment, there is still potential for increased retail floorspace within Cheltenham. Additional demand for retail floorspace will largely be driven by its worker population and associated retail expenditure from workers. In particular, Cheltenham should continue to build on its catering offer in the form of cafés and restaurants that will provide, in addition to meeting the immediate retail needs of residents and workers, a ‘meeting place’ for business and leisure purposes.

Council should therefore explore opportunities to increase Cheltenham’s catering offer through additional cafés and restaurants. In addition, Council should continue to build upon Cheltenham’s larger worker population by encouraging more employment within the centre. This would allow retail tenancies within the centre to capture a share of increased worker expenditure as well as increasing activity levels within the centre.

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Appendix 1- Cheltenham Retail Audit Name Address Activity Centre Retail Type Size (sqm)

The Grape Unknown 2 Station Rd Cheltenham Bottle-shop 120

BWS Liquor Stores 271 Charman Rd Cheltenham Bottle-shop 250

Futaba Japanese Restaurant 15-17 Station Rd Cheltenham Catering (Restaurant and Café) 150

Cafe Carnival 4 Station Rd Cheltenham Catering (Restaurant and Café) 150

Pizza Posto 7 Station Rd Cheltenham Catering (Restaurant and Café) 100

The Nutmeg Tree Café 23 Station Rd Cheltenham Catering (Restaurant and Café) 150

Reddy Roast 3 Station Rd Cheltenham Catering (Restaurant and Café) 90

AutoStrada Café 13 Station Rd Cheltenham Catering (Restaurant and Café) 90

Sandwich Bar 34 Station Rd Cheltenham Catering (Restaurant and Café) 40

Nello's Trattoria Bologna 277-279 Charman Rd Cheltenham Catering (Restaurant and Café) 350

Gigante Coffee 269 Charman Rd Cheltenham Catering (Restaurant and Café) 200

Grand Central Café 253 Charman Rd Cheltenham Catering (Restaurant and Café) 50

Out 4 Thai 294 Charman Rd Cheltenham Catering (Restaurant and Café) 110

Tandoori Zone 300 Charman Rd Cheltenham Catering (Restaurant and Café) 135

Cheltenham Fish 'n' Chips 228 Charman Rd Cheltenham Catering (Restaurant and Café) 150

Café Blah Blah 314 Charman Rd Cheltenham Catering (Restaurant and Café) 90

Charm & Chicken 285 Charman Rd Cheltenham Catering (Restaurant and Café) 75

Dairy Bell Icecream 306 Charman Rd Cheltenham Catering (Restaurant and Café) 75

Curries and Gravies 338 Charman Rd Cheltenham Catering (Restaurant and Café) 75

Indimand Café 340 Charman Rd Cheltenham Catering (Restaurant and Café) 75

Bluefoot Café 263 Charman Rd Cheltenham Catering (Restaurant and Café) 70

Satay Bar 300A Charman Rd Cheltenham Catering (Restaurant and Café) 60

Blue Sea Fish 'n' Chips 259 Charman Rd Cheltenham Catering (Restaurant and Café) 55

The Espresso Hit 255 Charman Rd Cheltenham Catering (Restaurant and Café) 35

Dazlyn Gems 14 Station Rd Cheltenham Clothing and Accessories 70

Cheltenham Op Shop 33-35 Station Rd Cheltenham Clothing and Accessories 75

Roulla Clothing 292 Charman Rd Cheltenham Clothing and Accessories 180

Cheltenham Opportunity Shop 33-35 Station Rd Cheltenham Clothing and Accessories 170

Spinos A&R Nominees 280 Charman Rd Cheltenham Clothing and Accessories 150

Wool & Sewing Circle 288 Charman Rd Cheltenham Clothing and Accessories 110

Ray Anstey Jeweller 286 Charman Rd Cheltenham Clothing and Accessories 110

Shoe Repairs 239 Charman Rd Cheltenham Clothing and Accessories 60

Sung Fashions 256 Charman Rd Cheltenham Clothing and Accessories 100

Pro PC Systems 2/16-18 Station Rd Cheltenham Electrical 50

Ultimate Computing Technology 264 Charman Rd Cheltenham Electrical 150

Spycam Surveillance 254 Charman Rd Cheltenham Electrical 55

McGee's Interior Curtains 9 Station Rd Cheltenham Houseware and Softgoods 100

Howkins 11 Station Rd Cheltenham Houseware and Softgoods 80

Antiques 31 Station Rd Cheltenham Houseware and Softgoods 75

Cheltenham Op Shop 33-35 Station Rd Cheltenham Houseware and Softgoods 75

Moorabbin Glass 20 Station Rd Cheltenham Houseware and Softgoods 75

Opportunity Shop 22 Station Rd Cheltenham Houseware and Softgoods 75

Cheltenham Custom Framing 280 Charman Rd Cheltenham Houseware and softgoods 90

Gary Allen 7/16 Station Rd Cheltenham Newsagent and Chemist 50

Bookstore 33-35 Station Rd Cheltenham Newsagent and Chemist 40

Chemist Warehouse 328 Charman Rd Cheltenham Newsagent and Chemist 400

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Community Pharmacy Cheltenham 274 Charman Rd Cheltenham Newsagent and Chemist 270

Chemmart 322 Charman Rd Cheltenham Newsagent and Chemist 220

Network Video 42 Station Rd Cheltenham Services 110

KT Myotherapy & Massage Therapy 12 Station Rd Cheltenham Services 100

Celebrate Party Hire 48 Station Rd Cheltenham Services 400

Head Turners 5 Station Rd Cheltenham Services 60

2nd Opinion Hair Design 19 Station Rd Cheltenham Services 100

Michael A. Morris Salon 3/16-18 Station Rd Cheltenham Services 75

Zig Zag Dress Making and Alterations 3 Railway Walk Cheltenham Services 40

Shoe repairs 4 Railway Walk Cheltenham Services 40

Hairdressing By Monica 284 Charman Rd Cheltenham Services 170

Matt Bennett Photography 280 Charman Rd Cheltenham Services 150

The Wattle Laundrette 260 Charman Rd Cheltenham Services 60

Harrick Jeffrey's Dry Cleaners 267 Charman Rd Cheltenham Services 130

Amasso Hair & Beauty 249 Charman Rd Cheltenham Services 60

Tony Lunn Hair Design 296 Charman Rd Cheltenham Services 110

Sammy's Hair Dressers 243 Charman Rd Cheltenham Services 50

Cheltenham Optical Centre 287 Charman Rd Cheltenham Services 75

Ennio & Sandra's Hairstyling 289 Charman Rd Cheltenham Services 75

Hair Emporium 304 Charman Rd Cheltenham Services 75

Naturally Beautiful Beauty Therapy 308 Charman Rd Cheltenham Services 75

Brunel Hobbies 5&6/16-18 Station Rd Cheltenham Sports and Hobbies 200

Pianos Plus 316-318 Charman Rd Cheltenham Sports and Hobbies 250

The Smart Golfer 245 Charman Rd Cheltenham Sports and Hobbies 80

O'Mara Cycles 265 Charman Rd Cheltenham Sports and Hobbies 130

Swimart Pool & Spa Services 252A Charman Rd Cheltenham Sports and Hobbies 150

The Little Itty Bitty Pet Shop 257 Charman Rd Cheltenham Sports and Hobbies 50

Foodworks 29 Station Rd Cheltenham Supermarket 500

Dorothea's Brownies 21 Station Rd Cheltenham Supermarket 140

Pattu Indian & Asian Grocery 1/16-18 Station Rd Cheltenham Supermarket 75

IGA Friendly Grocers 261 Charman Rd Cheltenham Supermarket 260

Charman Hot Bread 291 Charman Rd Cheltenham Supermarket 110

McKenzie Smith Butchers 312 Charman Rd Cheltenham Supermarket 90

Spinx Convenience Store 293 Charman Rd Cheltenham Supermarket 80

Cheltenham Fruit Supply 310 Charman Rd Cheltenham Supermarket 80

Cignal 283 Charman Rd Cheltenham Supermarket 75

Bakers Delight 320 Charman Rd Cheltenham Supermarket 75

Cheltenham Bakery 336 Charman Rd Cheltenham Supermarket 75

Charmans Fruits & Blooms 342 Charman Rd Cheltenham Supermarket 75

Ann's Flowers 255A Charman Rd Cheltenham Supermarket 40

Cheltenham Florist 255 Charman Rd Cheltenham Supermarket 30

Documents

Cheltenham Major Activity Centre | Retail Needs and ... · Cheltenham’s Main Trade Area Cheltenham’s Main Trade Area is shown in the following figure. It extends approximately