Economic Analysis of ampbelltown usiness Park · 2017-06-06 · Economic Analysis of ampbelltown usiness Park 3 FIGURE 1. PROPOSED STRU TURE PLAN s, 2015Source: apital Syndication

20150215-final report-150921

Economic Analysis of Campbelltown Business Park Final report Capital Syndications September 2015

20150215-final report-150921

This report has been prepared on behalf of Capital Syndications. SGS Economics and Planning and its associated consultants are not liable to any person or entity for any damage or loss that has occurred, or may occur, in relation to that person or entity taking or not taking action in respect of any representation, statement, opinion or advice referred to herein. SGS Economics and Planning Pty Ltd ACN 007 437 729 www.sgsep.com.au Offices in Brisbane, Canberra, Hobart, Melbourne, Sydney

http://www.sgsep.com.au/

Economic Analysis of Campbelltown Business Park i

DRAFT STRUCTURE - HEADINGS

1 INTRODUCTION 1 1.1 Background 1

1.2 Study scope 1

1.3 Report structure 1

2 SITE AND CONTEXT ASSESSMENT 2 2.1 Site assessment 2

Subject site and surrounding uses 2

The proposal 2

Policy context 3 2.2 Overview of health industry 4

Demographic trends and key drivers 4

Health sector in Campbelltown 6 2.3 Implications for the subject site 8

3 AGGLOMERATION ANALYSIS 9 3.1 Economic theory of agglomeration 9

Sources of agglomeration economies 10 3.2 Regression analysis for the study-site 12

Model specification 12

Regression results 12 3.3 Implication for the subject site 15

4 DEMAND AND SUPPLY ANALYSIS 16 4.1 Demand side analysis 16

Floorspace projections for Business Park 16 4.2 Supply side analysis 18

Overview of office market in the South West 18

Location attributes for business park 18

Competitor set 21 4.3 Competitive assessment 23

Competitive offer assessment 23 4.4 Implications 28

5 IMPACT ASSESSMENT 29 5.1 Industry profile in Campbelltown centre 29

5.2 Impact on Campbelltown-Macarthur 30 Functional overlap 30

Positive impact to existing centre 30

Clustering potential 31

Conclusion 31

Economic Analysis of Campbelltown Business Park ii

6 REFERENCE LIST 32

Economic Analysis of Campbelltown Business Park 1

1 INTRODUCTION

1.1 Background

The Maryfields Lakeside business park precinct is part of a larger mixed use development proposed for the Maryfields Estate. The overall planning proposal is to rezone the Maryfields Estate for a mix of business park, commercial offices, seniors living, aged care and residential uses. The planning proposal was initially endorsed by the City of Campbelltown and the NSW Department of Planning & Environment. The proposed business park development is expected to provide over 50,000 square metres of commercial floorspace and accommodate 1000-1200 jobs. The subject site is directly opposite the University of Western Sydney’s Campbelltown Campus with many of its facilities being medical or allied-health related. It is located in close proximity to the Campbelltown Public and Private Hospitals. We understand that as part of the assessment of the overall planning proposal for the Maryfields Estate, Council requires an assessment of the potential impact of the Maryfields Lakeside business park precinct on the Campbelltown Centre.

1.2 Study scope

SGS Economics and Planning has been commissioned by Capital Syndications to undertake an economic (market) assessment of the proposed business park development. While the key objective of this work is to assess the impact on Campbelltown-Macarthur, it also constitutes a market analysis for the proposed business park development with particular focus on health and related industries.

1.3 Report structure

The rest of the report is structured as follows: Site and context assessment Agglomeration analysis Supply and demand analysis Impact assessment Reference list


2 SITE AND CONTEXT ASSESSMENT

This section first provides a high level assessment of the subject site, including its location, the proposed development and policy context. Subsequently, an overview of the health industry in NSW and the Campbelltown LGA is outlined. This has comprised an analysis of the broad trends and drivers impacting on the healthcare industry, employment projections and level of specialisation in Campbelltown LGA compared to the Metropolitan Sydney.

2.1 Site assessment

Subject site and surrounding uses

The subject site is approximately 48.5 hectares and is currently used as a convent and monastery. The site is located on Narellan Road between the Hume Highway and Campbelltown centre. The subject site borders residential development in Blair Athol. The site is in close proximity to the University of Western Sydney Campbelltown Campus and Campbelltown TAFE Campus. The subject site is also located near the Campbelltown Hospital (public and private hospitals). In addition to the hospitals, the Campbelltown Hospital Clinical School is currently being developed at the University of Western Sydney Campbelltown Campus. The subject site is also in close proximity to Campbelltown and Macarthur centres (including the Macarthur Square shopping centre) and train stations.

The proposal

The map below illustrates the planning proposal for the subject site. The proposal includes a medium density seniors housing development, medium density residential adjoining existing housing in Blair Athol, and a business park development with access off Narellan Road. Open space is also proposed throughout the site and a neighbourhood centre is proposed to support the residential and commercial uses.


FIGURE 1 . PROPOSED STRUCTURE P LAN

Source: Capital Syndications, 2015

The business park component of the site is 12.7 hectares, shown in purple on the structure plan. The business park includes the watercourse running across the front of the site and surrounding landscaped areas. The proposed business park is estimated to accommodate approximately 50,000sqm of commercial floorspace and approximately 1,000-1,200 jobs.

Policy context

Campbelltown-Macarthur is identified as a Regional City Centre under A Plan for Growing Sydney. Other Regional City Centres include Liverpool and Penrith. As a Regional City Centre, Campbelltown-Macarthur is a centre for employment and services for nearby residents, including residents of the South West Growth Centre. The scale, mix and density of activity is considered to be of metropolitan significance. Campbelltown-Macarthur, along with other Regional City Centres and Strategic Centres identified in the Plan, are the priority focus for employment and retail activity. Key actions for Campbelltown-Macarthur Regional City Centre include: Work with council to retain a commercial core in Campbelltown-Macarthur, as required for long-term

employment growth. Work with council to provide capacity for additional mixed-use development in Campbelltown-

Macarthur including offices, retail, services and housing. Support health-related land uses and infrastructure around Campbelltown Hospital. Support education-related land uses and infrastructure around the University of Western Sydney. Work with council to investigate potential business park opportunities on the western side of the train

line. Work with council to improve walking and cycling connections to Campbelltown and Macarthur train

stations from the western side of the train line. Work with council to improve walking and cycling connections between Campbelltown Hospital and

Queen Street.


The growth of the knowledge economy in Western Sydney is also a focus of A Plan for Growing Sydney. The Plan notes that new office space is required in strategic centres across Western Sydney to meet growing demand. One of the priorities listed in the Plan for Campbelltown-Macarthur is ‘investigating potential business park opportunities on the western side of the rail line’ (pg. 130). The Campbelltown Local Planning Strategy provides the planning direction for the Campbelltown LGA and informs the development of the draft Campbelltown LEP 2014. The Strategy notes that future employment growth in the LGA is expected to be provided through the growth of existing centres, enterprise corridors along main roads and the rail line, and future business parks. The Strategy also notes that an assessment of the feasibility of a business park on the subject site should be prioritised in any future centres and corridors strategy. The Campbelltown Employment Lands Review was also prepared to inform the draft Campbelltown LEP 2014. The report forecast demand for an additional 29,000 jobs between 2006 and 2036. To accommodate this forecast growth, between 141 and 300 hectares of employment land is required. The report identifies the subject site as a potential location for a business park in the LGA. The report notes that as economic restructuring occurs, there has been a decline in manufacturing employment and an increase in business park development across Sydney. The subject site is identified as part of the Tertiary Education Precinct, anchored by the University of Western Sydney and Campbelltown TAFE. The site’s proximity to the Campbelltown-Macarthur centre, a university, a regional shopping centre and train stations are identified as key features that would support a business park. Land on the University of Western Sydney bordering Narellan Road is also considered for a business park. The Campbelltown Employment Lands Review stresses that the two sites should not be viewed as alternatives, rather the two sites could be integrated as one business park development. It is noted that a Council meeting on 31 May 2011 did not adopt the recommendation that a potential business park be investigated at the subject site in accordance with the Campbelltown Employment Lands Review.

2.2 Overview of health industry

Demographic trends and key drivers

Health Care and Social Assistance is the largest employing industry in Australia, accounting for approximately 12% of jobs nationally. Health Care and Social Assistance is also one of the strongest growing industries. This industry has experienced continued growth over the past decade, due in part to the ageing population. In the five years to November 2014, the Health Care and Social Assistance industry grew by 16% (Department of Employment, 2015), revealing that the industry has experienced continued demand during period of economic downturn (Department of Employment, 2014). Between November 2014 and November 2019, the Health Care and Social Assistance industry is forecast to grow by 18.7% (Department of Employment, 2015). This growth is forecast to account for 20.9% of all new jobs in Australia over the next five years (Department of Employment, 2015). High growth is also anticipated in New South Wales, with an additional 74,000 jobs forecast from November 2014 to November 2019 (Department of Employment, 2015, see Figure 2). The South Western Sydney Local Health District is projected to experience some of the highest population growth in NSW, and subsequently a higher demand for health services (NSW Health, 2014).


FIGURE 2 . EMPLOYMENT IN HEALTH CARE AND SOCIAL ASSISTANCE IN NEW SOUTH WALES

Source: Department of Employment, 2014.

Driving this employment growth is the growth in population and associated demand for health services. The population of NSW is expected to grow by approximately two million people (approximately 29.3%) between 2006 and 2031. Growth in bed-days for acute activity in NSW hospitals is expected to grow by 49% over this period (PricewaterhouseCoopers 2012). There is projected demand for approximately an additional 200 acute and 75 sub-acute overnight beds per year to 2021 in public sector hospitals (PricewaterhouseCoopers 2012). An ageing population also increases demand for health services and a growing health industry. According to a report prepared by PricewaterhouseCoopers (2012), on average the health related expenditure per person over 65 is four times that for people under 65. A number of health related developments in the Sydney metropolitan area have been announced or are underway to meet this growing demand. These developments include: Redevelopment of Campbelltown Hospital ($133 million) Campbelltown Hospital Clinical School – jointly funded by the NSW Government and the University

of Western Sydney ($18 million) Expansion of the Sutherland Hospital ($62 million) Redevelopment of the St George Hospital ($282 million) Redevelopment of the Westmead Hospital ($430 million) Redevelopment of Blacktown/Mount Druitt Hospitals ($259 million) Redevelopment of the Hornsby-Ku-ring-gai Hospital ($121 million) Implementation of the Sydney Metropolitan Ambulance Infrastructure Strategy ($150 million) Development of the new Northern Beaches hospital at Frenches Forest (approximately $2.14 billion) The Bright Alliance cancer research partnership in Randwick ($114 million)


Health sector in Campbelltown

Table 1 shows the industries of employment in the Campbelltown LGA. Health Care and Social Assistance is the most significant industry of employment in the LGA, representing 13% of jobs. A location quotient analysis was conducted to determine the industry specialisation of the Campbelltown LGA compared to Metropolitan Sydney. The results are shown in Table 1 and indicate that Campbelltown has a similar, slightly higher concentration of jobs in the Health Care and Social Assistance industry to Metropolitan Sydney.

TABLE 1 . INDUSTRY OF EMPLOY MENT IN CAMPBELLTOWN LGA

Industry Campbelltown % GMA % LQ

Accommodation and Food Services 3,147 7.05% 158,961 6.40% 1.10 Administrative and Support Services 1,115 2.50% 85,257 3.43% 0.73 Agriculture, Forestry and Fishing 71 0.16% 11,541 0.46% 0.34 Arts and Recreation Services 394 0.88% 38,375 1.55% 0.57 Construction 2,469 5.53% 178,198 7.18% 0.77 Education and Training 5,018 11.25% 192,838 7.77% 1.45 Electricity, Gas, Water and Waste Services 266 0.60% 24,162 0.97% 0.61 Financial and Insurance Services 684 1.53% 147,723 5.95% 0.26 Health Care and Social Assistance 5,959 13.36% 280,946 11.32% 1.18 Information Media and Telecommunications 379 0.85% 66,414 2.68% 0.32 Manufacturing 7,594 17.02% 217,196 8.75% 1.95 Mining 196 0.44% 16,985 0.68% 0.64 Professional, Scientific and Technical Services 1,333 2.99% 221,097 8.91% 0.34 Public Administration and Safety 2,343 5.25% 143,738 5.79% 0.91 Rental, Hiring and Real Estate Services 755 1.69% 42,903 1.73% 0.98 Retail Trade 5,684 12.74% 249,737 10.06% 1.27 Transport, Postal and Warehousing 2,480 5.56% 129,257 5.21% 1.07 Wholesale Trade 1,898 4.25% 120,984 4.87% 0.87 Other Services 1,671 3.75% 93,093 3.75% 1.00 Inadequately described 537 1.20% 33,487 1.35% 0.89 Not stated 624 1.40% 29,538 1.19% 1.18 Total 44,617 100.00% 2,482,432 100.00% 1.00

Source: BTS, 2014

Of the Health Care and Social Assistance jobs located in the Campbelltown LGA, approximately 27.2% of jobs are in hospitals. This can largely be explained through the Campbelltown Hospital. Table 2 shows approximately one quarter (25.1%) are in medical and other health services. This category includes general practitioners, specialised medical services, allied health services (such as optometrists and dentists), and pathology and diagnostic imaging services. The proportion of hospital and medical and other health services jobs in the health and social assistance sector is similar but lower than that in Metropolitan Sydney. However, Campbelltown LGA has a higher proportion of social assistance service jobs (e.g. child care, youth welfare, disability assistance) than Metropolitan Sydney.

TABLE 2 . HEALTH CARE AND SC OIAL ASSISTANCE INDU STRIES IN CAMPBELLTO WN LGA

Campbelltown % GMA % LQ

Health Care and Social Assistance, nfd 289 4.9% 14,079 5.0% 0.98 Hospitals 1,608 27.2% 80,713 28.7% 0.95 Medical and Other Health Care Services 1,485 25.1% 77,948 27.7% 0.91 Residential Care Services 830 14.0% 44,710 15.9% 0.88 Social Assistance Services 1,702 28.8% 63,597 22.6% 1.27 Total 5,914 100.0% 281,047 100.0% 1.00

Source: BTS, 2014 Figure 3 illustrates the location of Health Care and Social Assistance jobs in the Campbelltown LGA by Travel Zone from the Bureau of Transport Statistics (BTS). There is a significant concentration of health industry jobs in and around the Campbelltown centre, particularly at the Campbelltown Hospital. Smaller concentrations of health industry jobs are present in Glenfield, Ingleburn and Rosemeadow.


FIGURE 3 . LOCATION OF HEALTH INDUSTRY JOBS IN CAM PBELLTOWN IN 2011

Source: BTS, 2014. LGA boundary shown is approximate.

The Health Care and Social Assistance industry is forecast to grow in the Campbelltown LGA. As shown in Table 3, this industry is forecast to grow at 2.35% per annum, resulting in approximately 13,450 jobs in 2041. Increases in health care and social assistance jobs are forecast across the LGA. The cluster of health industry jobs around Campbelltown centre is forecast to increase and expand geographically, expanding towards Macarthur (see Figure 4). The growth of the health industry in Campbelltown is discussed further in Chapter 4.

TABLE 3 . GROWTH IN THE HEALTH CARE AND SOCI AL ASSISTANCE INDUST RY

2011 2016 2021 2026 2031 2036 2041 2011-2041 CAGR

Health Care & Social Assistance 6,696 7,512 8,674 9,754 10,887 12,125 13,457 6,761 2.35%

Source: BTS, 2014


FIGURE 4 . FORECAST LOCATION OF HEALTH INDUST RY JOBS IN CAMPBELLTOWN IN 2041

Source: BTS, 2014. LGA boundary shown is approximate.

2.3 Implications for the subject site

A business park in Campbelltown has been proposed in the Campbelltown LGA in State and local planning documents. The State Government in A Plan for Growing Sydney suggests that a business park opportunity should be considered west of the rail line. The subject site has been identified as a potential option for a business park west of the rail line in the Campbelltown LGA through the Campbelltown Employment Lands Review. The subject site benefits from good road access and proximity to significant health and education infrastructure, rail transport and a Regional City Centre. The health industry is growing in Campbelltown LGA, with the number of people employed in the Health Care and Social Assistance industry forecast to double between 2011 and 2041. A business park on the subject site could benefit from this growth in the health industry due to its proximity and potential linkages to the Campbelltown Hospital Clinical School and the Centre for Health Research at the University of Western Sydney and the Campbelltown Hospital. The next chapter examines the clustering patterns of healthcare industry and the potential of the subject site to attract related activities based on the proximity to the magnet infrastructure described above.


3 AGGLOMERATION ANALYSIS

Health care and tertiary education sectors are located in close proximity to the subject site. This section examines the clustering potential of these major existing industries as an indication of the likelihood that the proposed business park will attract tenants with links to these major industries.

3.1 Economic theory of agglomeration

Agglomeration is a term used in spatial economics to describe the benefits which flow to firms from locating in areas which have a higher density of economic activity. Locating in an area of dense economic activity (as measured by employment) allows firms to achieve economies of scale via a large customer base. Within that large customer base, the opportunity for economics of scope is also presented to firms. These concepts are defined further as follows. Economies of scale describe the falling per unit (marginal) cost of production as output increases. Internal economies of scale relate to a firm regardless of industry, market or environment. External economies of scale relate to a benefit to a firm from industrial organisation. Diseconomies of scale describe increasing costs (and falling profit) with increased outputs, possibly due to complex firm organisation and associated costs. Economies of scope relate to factors that make it cheaper for a range of products to be produced together rather than produced individually, via cheaper centralised functions (management, finance, IT, marketing) or from links elsewhere in the business process. Quigley (1998) provides a useful summary of agglomeration, describing four related features which give rise to greater economic efficiency. The first feature relates to scale economies, which describes declining marginal costs as production expands. Economies of scale are linked to the theory of returns to scale, which describe the relationship between inputs and outputs. Where inputs to production are fixed, proportional outputs are defined as constant returns to scale. Where outputs are more than proportional to inputs, this is described as increasing returns to scale. Increasing returns to scale can be the result of technological innovation when inputs are fixed, however, they can also result from the productivity gains stemming from agglomeration. The second feature described by Quigley (1998) concerns shared inputs in production and consumption in producing differentiated, specialised goods. Quigley’s third and fourth features are linked to the concepts of urbanisation and localisation. The World Bank (2009) provides a succinct description of these production-related economies. Three types of production-related economies are defined by World Bank (2009): internal economies, localisation economies, and urbanisation economies. Internal economies relate to reduced marginal costs for a firm via higher production yields and fixed costs. For example, a larger firm may be able to obtain volume discounts for certain inputs. Internal economies are a form of economies of scale, as are external economies. External economies are synonymous with agglomeration economies and include urbanisation and localisation economies.


Urbanisation relates to the higher levels of labour productivity evident in larger cities (in terms of population, employment, or economic production). Localisation reflects the spatial organisation of a city and the ease with which firms can interact with each other. For example, consider two cities, City A and City B, each with a population of five million people. Each city is likely to gain a labour productivity premium simply from their size. However, City A is poorly organised with economic activity spread widely and poorly linked together. City B has distinct employment centres linked tightly together via robust transport links. In this case the labour productivity in City B is likely to be higher than City A. World Bank (2009) defines these concepts further, with localisation economies described as a large number of firms in the same industry and same place, which encourages knowledge spillovers, better skills matching and sharing of inputs. Urbanisation is further described as a large number of different industries locating in the same place, and the benefits that this can generate. Reduced transport costs are the third feature defined by Quigley (1998); a feature of economies which are efficiently organised spatially. Limiting the interaction between people and business due to a lack of accessibility can impact on the economy in three key ways. These are described by the National Cooperative Highway Research Program (2001) as: 1. “By increasing business costs of current delivery operations.” 2. “By limiting or reducing business sales through a reduction in effective market size.” 3. “By increasing unit costs through loss of opportunities for scale economies in production and delivery processes”. The fourth feature defined by Quigley is the ‘law-of-large-numbers’ where suppliers are pooled when multiple firms locate in a single area, that is, urbanisation economies. The competitive marketplace presents a firm with many potential clients, reducing risks associated with reliance on a single customer. The automotive manufacturing supply chain provides examples of the dangers of poor diversification of risk for firms, whereby the closure of the automotive assembly plant result in the closure of component manufacturers, often in the local region.

Sources of agglomeration economies

Agglomeration arises both from the benefits of firms locating in an area where they can exploit a natural advantage and from firms locating together to take advantage of agglomeration economies – the benefits of the clustering of industries and firms. Input sharing Holmes (1999) investigates the connection between a firm’s location in close concentration with similar firms and its engagement in input sharing with other firms. Holmes uses Census data on manufacturing sales at the establishment (firm) level and Census data on purchased inputs. Purchased inputs are divided by sales to give purchased input intensity which is also a measure of vertical dis-integration or input sharing. World Bank (2009) suggests input-sharing is an important channel for agglomeration economies, as density of activity allows more refined specialisation and wider variety of intermediate inputs.


Knowledge and technological spillovers To address the challenges of a lack of official data about knowledge spillovers, Jaffe et al (1993) use the location of firm patent citations to create a ‘paper trail’ of knowledge and technological spillovers. They found that spillovers from research to firms are greater when research and firms are co-located, with citations five to 10 times more likely to come from the same municipal area than control patents. This effect is expected to vary with industry scope – being most pronounced in those industries that are highly innovative or knowledge intensive (Audretsch and Feldman, 1996). Labour market pooling Simon (1988) considers the relationship between the unemployment rate and a city’s level of specialisation. Unemployment rates are shown to be greater in cities with higher degrees of specialisation - consistent with the idea of industry shocks being an important issue. It could therefore be expected that workers in specialised cities demand higher wages to compensate them for this risk. Diamond and Simon (1990) show that workers do, indeed, demand higher wages in more specialised cities and that these higher wages are also related to the cyclical variability of employment by industry. Home market effect Krugman (1980) and Davis & Weinstein (1996) formally investigated this phenomenon, examining regional agglomeration across Japanese prefectures. They identified substantial increasing return effects on industrial concentration in eight of 19 prefectures. They concluded that the home market effect is an important determinant of regional concentration in both large cities and smaller localities. The relative contribution of each of these factors has been explored by Kim (1995, 1999) and Ellison and Glaeser (1999). Kim looked at agglomeration between 1860 and 1987 and regressed a location quotient – measuring the concentration of industry - against plant size, natural resource availability and dummy variables for industry sector and time. The positive coefficient returned for the natural resources variable suggested that this was highly significant. Ellison and Glaeser showed that 20 percent of agglomeration can be predicted by the presence of natural advantages. However, it is likely that, over time, the role of natural advantage in determining agglomeration has been decreasing because labour has become more mobile – enabling industries to concentrate in an area and enjoy agglomeration economies by importing labour.


3.2 Regression analysis for the study-site

Model specification

The proposed Business Park is located in the ABS defined Statistical Area (SA2) known as Campbelltown – Woodbine. In this SA2, excluding retail, some of the major two-digit ANZSIC industries with significant Gross Value Add (GVA) include: Hospitals Medical and Other Health Care Services Social Assistance Services Tertiary Education Professional, Scientific and Technical Services (except Computer System Design and Related Services) To assess the clustering potential of these industries, we examined the relationship (across NSW) between the GVA per hour and Effective Job Density (EJD) for each of the five industries identified above. GVA per hour – a measure of productivity; reflects the extent to which workers are more productive. That is, the more productive (or high-value) an activity, the more GVA is produced per hour. EJD is an index measure of travel-time discounted employment density. This simply means that jobs that are in close proximity to a given location (in terms of travel time or effective distance) result in a higher density. For instance, EJD for Professional Services in Sydney CBD is high because of the concentration of employment. Using data for SA2s in NSW, we estimate the following regression equation for each of the five industries (denoted by 𝑖 in the equation) relevant to the subject site, and proposed business park. 𝐺𝑉𝐴 𝑝𝑒𝑟 ℎ𝑜𝑢𝑟𝑖 = 𝛽0 + 𝛽1 × 𝐸𝐽𝐷𝑖 + 𝜀𝑖 A positive coefficient (𝛽1) denotes that labour productivity (GVA per hour worked) increases with higher effective employment density. In other words, for a given industry, there is strong clustering potential if there is a positive (and statistically significant) relationship between employment density and productivity of labour. This is because it is more likely that industries that reveal a positive relationship are likely to seek to co-locate to derive benefits from agglomeration.

Regression results

The results of the regression models for each industry are shown in the graphs below. It is clear that all the key industries in the study area SA2 exhibit clustering potential, as indicated by the positive gradient in each diagram (which reflects the positive estimated coefficient (𝛽1) of the relationship between labour productivity and job density). This suggests that these industries are likely to attract similar industries to co-locate in the wider-study area (which would include the subject site, and the proposed business park development). However, the clustering potential varies by industry. Of the industries considered in this analysis, Social Assistance Services, Tertiary Education, and Professional Services are the top-three clustering industries in the wider-study area.


FIGURE 5 . CLUSTERING ANALYSIS - HOPSITALS, HEALTH CARE SERVICES

Source: SGS, 2015


FIGURE 6 . CLUSTERING ANALYSIS - SOCIAL ASSISTANCE, P ROFESSIONAL SERVICES

Source: SGS, 2015


FIGURE 7 . CLUSTERING ANALYSIS – TERTIARY EDUCATION

Source: SGS, 2015

3.3 Implication for the subject site

The regression analysis examines the relationship between effective employment density, and labour productivity for high-value industries at the subject site. Broadly, these industries demonstrate clustering potential, and this suggests that these key-industries may attract other similar industries or linked-industries to the proposed business park. As a means of understanding the strength of the agglomeration effect of these industries, we compare the estimated coefficient for each 2-digit industry with an estimate of the 1-digit industry to which they belong. This shows that Hospitals, Social Assistance Services, and Tertiary Education sectors are well above the gradients for the 1 digit ANZSIC industries to which they belong. This suggests these three industries have clustering potential that is above the average of their own industry-group.

TABLE 4 . 1-DIGIT ANZSIC ESTIMAT E COMPARISON

ANZSIC - 2 digit industry Slope (B1)

ANZSIC - 1 digit industry Slope (B1)

2-digit industry relative to own industry average (1 digit)

Hospitals 0.19 Health Care and Social Assistance 0.12 60%

Medical and Other Health Care Services 0.11 Health Care and Social Assistance 0.12 -7%

Social Assistance Services 0.26 Health Care and Social Assistance 0.12 114%

Tertiary Education 0.21 Education and Training 0.06 255%

Professional, Scientific and Technical Services 0.13 Professional Services 0.17 -21% Source: SGS, 2015

Given the nature of these high-value industries, it is anticipated that input sharing, labour market pooling, and knowledge and technological spillovers are key agglomeration benefits that drive the clustering of these industries. The agglomeration analysis shows that these high-value 2-digit industries are highly productive, and have good clustering potential. Under positive market conditions, and given sufficient land (with appropriate infrastructure) in proximity to existing locations of employment, similar industries or linked-industries may seek to locate at the proposed business park to reap agglomeration benefits.


4 DEMAND AND SUPPLY ANALYSIS

This section provides a demand and supply analysis for business park land use. The demand side analysis has focused on the projected demand for business park floorspace within the South West subregion, whereas the supply side analysis identifies the success factors for business park development and locations elsewhere in the subregion that are likely to compete with the proposed business park site. Lastly, a multi-criteria assessment is completed to compare the competitive offer of subject site to other potential and existing business parks, against the list of attributes identified.

4.1 Demand side analysis

Floorspace projections for Business Park

Future demand for floorspace in a business park is primarily dependant on future growth of industries that require Business Park floorspace. As a business park development is likely to attract activities that may otherwise be located in areas outside the local government area it belongs to, it is necessary to assess the demand for the Business Park in the broader South West subregion1. SGS has projected the future demand for Business Park floorspace for South West sub-region. The steps in this analysis are as follows: 1. Use employment forecasts from the Bureau of Transport Statistics (BTS) to generate the projected

growth in jobs by ANZSIC 1-digit industry from 2011 to 2041. 2. Distribute jobs by ANZSIC industry to appropriate SGS Broad Land use Categories (BLCs), which were

developed in previous employment land planning investigations with the then NSW Department of Planning and Infrastructure. The relevant BLCs are business parks and office spaces.

3. Convert employment growth by BLC into floorspace demand using SGS benchmark floorspace to job ratios.

Distributing jobs in each ANZSIC industry to the business park land use before converting the job growth into floorspace demand provides a much more accurate assessment of business park demand than working with ANZSIC categories alone. This important step is illustrated in Table 5, where: Column 1 lists 1 digit ANZSIC Industry categories Column 2 presents the projected growth in jobs for each ANZSIC industry forecast from 2011 to 2041 Column 3 shows the expected proportion of jobs for each industry requiring Business Park floorspace Column 4 shows the expected number of jobs for each industry requiring Business Park floorspace. By 2041, it is projected that over 5,600 jobs in the South West subregion will demand business park floorspace. To convert these additional jobs into floorspace demand, a typical job density ratio of 50 square metres per job is used. The result shows that there is projected to be demand for 280,000 square metres of business park floorspace in the South West subregion. The industries that require the most Business Park floorspace are Wholesale Trade, Professional, Scientific and Technical Services, Education and Training and, Transport, Postal and Warehousing.

1 South West sub-region includes the following Local Government Areas: Camden, Campbelltown, Fairfield, Liverpool and Wollondilly.


The proposed development at the subject site is expected to accommodate around 18 percent of the total business park demand by 2041.

TABLE 5 . ADDITIONAL BUSINESS PARK JOBS IN THE WEST SUB -REGION, 2011-2041

ANZSIC Industry Projected job growth

% of jobs in each industry requiring business park floorspace

No. of jobs requiring business park floorspace

A B C=A*B

Column 1 Column 2 Column 3 Column 4

Agriculture, Forestry and Fishing 509 0% -

Mining 340 0% -

Manufacturing 6,963 2% 139

Electricity, Gas, Water and Waste Services 992 3% 30

Construction 8,722 4% 349

Wholesale Trade 7,773 4% 311

Retail Trade 27,018 2% 540

Accommodation and Food Services 13,534 1% 135

Transport, Postal and Warehousing 15,476 1% 155

Information Media and Telecommunications 2,035 15% 305

Financial and Insurance Services 2,719 10% 272

Rental, Hiring and Real Estate Services 2,661 16% 426

Professional, Scientific and Technical Services 10,933 14% 1,531

Administrative and Support Services 6,702 0% -

Public Administration and Safety 5,990 5% 300

Education and Training 15,397 3% 462

Health Care and Social Assistance 25,401 2% 508

Arts and Recreation Services 1,599 2% 32

Other Services 5,889 2% 118

Inadequately described and Not Stated 408 0% -

Total 161,061 5,612 Source: BTS, 2014; SGS Economics and Planning calculation, 2015.


4.2 Supply side analysis

In this subsection, we have first completed a broad review of the office market in the South West. This is followed by the identification of business park attributes and locations likely to compete with the proposed business park site.

Overview of office market in the South West

The office market in the South West has been performing increasingly well in recent years. In 2014, the Campbelltown and Camden LGAs had 260,000 square metres of office space, most of which is around Campbelltown, with smaller concentrations around Ingleburn, Minto, Smeaton Grange, Narellan and Camden. The vacancy rate for office space in Campbelltown in 2014 was 5.0% in 2014, decreasing from 5.9% in 2013 (LJ Hooker 2014). The majority of leasing and sales activity has occurred in the Campbelltown centre, concentrating on central areas such as Queen Street, Hyde Parade and Parkside Crescent. Narellan is also a popular location for office leasing activity. The majority of office spaces leased in 2013 and 2014 were smaller than 200sqm. There is a notable lack of office spaces larger than 200sqm, which is considered to have an impact on rental prices in the region (LJ Hooker 2014). The majority of rents in the South West region vary between $150 and $300sqm per sqm based on building age, quality and location. The average A-grade office rent in the South West is $337 per square metre, growing by 4.5% in 2014 (Knight Frank 2015). Figure 8 illustrates the price and size of office spaces for lease in Campbelltown and Camden LGAs

FIGURE 8 . OFFICES FOR LEASE IN CAMPBELLTOWN AND CAMDEN LGAS

Source: LJ Hooker, 2014

The majority of office space in the Campbelltown and Camden LGAs is older than 30 years (LJ Hooker 2014). There is limited supply of new commercial space in the Campbelltown LGA. One commercial development has been approved with 1,900sqm of commercial floorspace, and three mixed use developments with commercial/retail space approved, totalling approximately 1,000sqm. These developments are located in the Campbelltown and Macarthur centres.

Location attributes for business park

There are several attributes that business parks require in order to be successful. The majority of these attributes relate to the location of a business park and the characteristics of surrounding areas. There are also a number of non-locational factors which contribute to the development of a successful business park, which are discussed below.


Unconstrained land and park size

Land that is relatively flat and free from constraints is easier to develop and can readily support the development of a business park. Lot fragmentation can limit the viability of a business park by preventing orderly development of a site. Large lots held in single ownership are preferable for the development and implementation of business parks. Single ownership enables the implementation of a single strategic vision and masterplanning of the site (JLL 2014). A large land area also enables the expansion of a business park and individual businesses as the business park matures (Urbis 2013). The Department of Planning and Environment’s Employment Lands Development Program considers businesses parks over 50Ha to be significant. Support large and flexible floorplates

Large floorplate formats provide opportunities for larger corporations to relocate to business parks rather than occupy a multi-tenant building in an existing centre. Businesses are increasingly locating their full range of functions in one location rather than occupying several smaller locations (JLL 2014), requiring a larger floorplate and possibly an entire building. Business parks may also offer the opportunity to build a custom headquarters to suit the needs of larger corporations. A flexible floorplate is also an important attribute of successful business parks. As the supply of metropolitan office space is demand led a flexible floorplate enables the quick and easy response to changing needs for floorspace and accommodating new tenants(BIS Shrapnel 2014). Timely provision of infrastructure

The timely, coordinated provision of essential infrastructure is crucial to the early development and success of a business park. The commitment of infrastructure provides certainty to developers and businesses looking to locate in the business park. Superior ICT infrastructure, including high speed broadband internet, is becoming increasingly important to the success of business parks as businesses increasingly rely on internet-based technologies (McDougall and Witte 2011). Support centre hierarchy

Successful business parks reinforce and complement the existing centres hierarchy rather than provide competition. A mix of uses, including commercial uses, are important to the viability and vitality of centres. Business parks should not be positioned to detract activity from existing centres and should attract new businesses to the region by offering a different commercial enviornment. Access to magnet infrastructure

Access to large scale infrastructure such as hospitals, universities and airports, are a common feature of successful business parks. Magnet infrastructure acts as an anchor for business development attracting significant population numbers and economic activity to the development, e.g. students to universities and passengers to airports. Proximity to magnet infrastructure is particularly important for smaller business parks which may not be economically viable without additional economic activity (JLL 2014). Related industries are also attracted to magnet infrastructure, enabling knowledge sharing between the institution and businesses. This knowledge sharing in turn can facilitate agglomeration and the development of significant clusters of industries related to the anchor infrastructure (McDougall and Witte 2011). Previous work by SGS has found numerous benefits to agglomeration, including: Increases to productivity Knowledge/technological spill-over and innovation Increased economies of scale and scope Access to a more diverse and deeper labour pool


Previous work by SGS found agglomeration benefits are greatest for service based industries and knowledge industries, such as Professional, Scientific and Technical Services and Financial and Insurance Services. Accessible by road

Successful business parks are accessible to the labour force and to markets. Highly accessible locations tend to be favoured for business park development. Access to arterial roads and motorways connects the business park to employees, clients and to other services required to support the business. Good access to arterial roads and motorway access points also provides access to local markets and freight. The large scale provision of car parking is one of the key attractions of business parks in suburban areas (JLL 2014, Macroplan 2009, Urbis 2013). Accessible by public transport

While private transport accessibility is highly valued, good access to public transport is another key locational attribute of successful business parks. Regular bus or train services to or near the site connects potential employees and clients to the business park and assists in reducing congestion around the site (BIS Shrapnel 2014, JLL 2014). Access to highly educated and executive labour force

Successful business parks are accessible to an educated and executive labour force, enabling efficient and timely commutes to industries in the business park. The choice of business location is often influenced by the personal preference of the owners or senior executives, who prefer locations in close proximity to their place of residence (BIS Shrapnel 2014). Proximity to residential growth areas, either greenfield or infill, provides the potential to increase the local executive labour force. Some examples of successful business parks, including Norwest Business Park and Tally Ho Business Park in Melbourne, include residential development within the business park. Residential development in the business park generally takes the form of executive housing to attract and accommodate knowledge workers (Macroplan 2009). Prestige and branding

Successful business parks are often located in a prestigious area, with good access to other key employment areas such as the CBD. Proximity to executive suburbs can also add to the prestige of a business park location. The marketing of a business park can assist in developing a particular brand and increase the attraction of the site. The branding of business parks often focuses on the unique features of the site and lifestyle benefits (McDougall and Witte 2011, JLL 2014). High amenity

The amenity of a business park contribute to the success of its operations and attracting businesses. High amenity sites with campus style developments, open space, landscaping and pedestrian friendly environments are valued by businesses and workers. Social infrastructure such as child care centres, medical centres and retail uses also contribute the amenity and attraction of a business park and could compete with the offer of traditional centres for larger businesses (JLL 2014). The high amenity of a business park can be used as a differentiating attribute to other office locations and utilised when branding the business park (Macroplan 2009).


Competitor set

There are several locations which could compete with the subject site for commercial development. These locations are either other potential or exiting business parks or commercial centres with a mix of uses. These locations are across the Campbelltown LGA and the broader South West region. Competing business parks

Leppington North

Leppington North Business Park was rezoned in 2013 as part of the Austral & Leppington North Precinct in the South West Growth Centre. The Austral & Leppington North Precinct is planned to accommodate approximately 17,350 dwellings with a population of approximately 54,000. The portion of the Precinct zoned B7 Business Park is 79ha and is adjacent to the planned Leppington strategic centre and the Leppington train station on the South West Rail Link. As of 2014, the Leppington North Business Park was 100% undeveloped (Department of Planning and Environment 2014). Central Hills Business Park

The Central Hills Business Park is located in the Turner Road Precinct of the South West Growth Centre in the Camden LGA. The Central Hills Business Park is located on Camden Valley Way, with connections to the Hume Highway and arterial roads such as Narellan Road and The Northern Road. The Business Park is zoned IN1 General Industrial and B5 Business Development. The primary use of the Central Hills Business Park is bulky goods retail, supported by food retailing. The business park will be anchored by the Gregory Hills Private Hospital, which has recently gained development approval. As of August 2015, the Central Hills Business Park was 90% sold, and all industrial land was sold for development. University of Western Sydney site

The University of Western Sydney Campbelltown Campus was identified as a potential business park location in the Campbelltown Employment Lands Review. The Review identified approximately 6.6Ha bordering Narellan Road that has direct access to the university campus and is in close proximity to the Campbelltown TAFE, Macarthur Square and the Campbelltown-Macarthur Regional City Centre. The site also benefits from connections to the Hume Highway and train stations at Campbelltown and Macarthur. The Review proposed the integration of a potential business park on this site with a business park on the subject site. It is noted that at its meeting on 31 May 2011, Council did not adopt the recommendation that a potential business park be investigated at the University of Western Sydney site. Hurlstone Agricultural High School site

The Hurlstone Agricultural High School site and Department of Planning and Environment land to the south of the school was identified as a potential business park location in the Campbelltown Employment Lands Review. The site is adjacent to the Glenfield train station and town centre. The site is also in close proximity to the Hume Highway and executive housing in Macquarie Links and Denham Court. The suggested business park was proposed to build upon the existing school uses and specialise in agricultural research and related businesses. The suggested site is 140ha. It is noted that at its meeting on 31 May 2011, Council did not adopt the recommendation that a potential business park be investigated at the Hurlstone Agricultural High School site. Moorebank

Moorebank is located in Liverpool LGA. The current industrial area in Moorebank has good road access to the M5 and M7 and is close to the Airport and East Hills rail line. An Intermodal Terminal Facility has recently been approved at Moorebank to handle container traffic from interstate rail freight and Port Botany. The approved Intermodal Terminal Facility is 241 Ha and, when complete, will have the capacity for up to 1.5 million containers per year. The Intermodal Terminal Facility is likely to generate significant economic activity and has the potential to draw warehousing and logistics businesses to the area. With significant Commonwealth infrastructure investment in the area, the existing industrial area may have the


potential to develop into a business park supporting the Intermodal Terminal Facility. No proposals are noted at present. Western Sydney Airport

The Western Sydney Airport at Badgerys Creek was announced in April 2014 and is expected to be operational in the mid-2020s. The Western Sydney Airport is expected to generate approximately 4,000 jobs during construction and stimulate economic activity in the region. The Western Sydney Airport borders the Broader Western Sydney Employment Area, which is planned to accommodate approximately 57,000 jobs over the next 30 years. Upgrades to The Northern Road and Bringelly Road as well as a new motorway to the airport have been announced by the Commonwealth government. As the Western Sydney Airport and Broader Western Sydney Employment Area develop and mature, there may be potential for a business park development on or near airport land and ther potential for an aerotropolis development. Competing centres

Campbelltown-Macarthur

Originally two separate centres, Campbelltown-Macarthur is identified as a Regional City Centre under A Plan for Growing Sydney. The centre is serviced by two train stations and has good access to the Hume Highway via Narellan Road. The centre is also in close proximity to the Campbelltown Hospital, University of Western Sydney Campbelltown Campus, Campbelltown TAFE, and Macarthur Square. Campbelltown-Macarthur is located near the South West Growth Centre and the Greater Macarthur Investigation Area, a potential urban release area to the south of the centre. The centre contains a range of uses, including commercial, retail, community and residential uses. The centre is adjacent to industrial and residential uses. The majority of office space in the centre occurs in Campbelltown and is less than 200sqm (LJ Hooker 2014). Ingleburn Ingleburn is located in the Campbelltown LGA along the rail line. The centre is serviced by the Ingleburn train station and is proximate to the Hume Highway, however the centre lacks direct access to the highway. Ingleburn services the local population and workers in the Ingleburn Industrial Area and is located between Campbelltown and Liverpool Regional City Centres. The centre supports service based industries. Campbelltown Council is undertaking a structure planning process for the Ingleburn centre to increase residential densities and provide an additional 25,000 square metres of retail and commercial floorspace. Narellan

The Narellan centre is located on Camden Valley Way in the Camden LGA. The Narellan Town Centre has had significant office leasing activity in recent years (LJ Hooker 2014). The centre is anchored by the Narellan Town Centre standalone shopping centre. The shopping centre is currently undergoing an expansion to double the retail space to 72,000sqm. The expansion is also expected to incorporate a banking precinct within the centre and an additional 3,000sqm of commercial space. Oran Park

Oran Park was one of the first precincts released in the South West Growth Centre. The Oran Park centre is currently being developed and is located in the Camden LGA. The centre has access to The Northern Road and future residential development in the South West Growth Centre. Office spaces in the recently completed Oran Park Podium development are designed to be flexible and range in size. The development benefits from high speed fibre optic internet connection. The development also offers the Oran Park Smart Work Hub, a shared office space located in the town centre. Camden Council is relocating its offices to Oran Park. The new council building will provide 6,200sqm of commercial floorspace, drawing additional activity into the centre.


Edmondson Park

Edmondson Park was the first Precinct released as part of the South West Growth Centre. The Precinct is planned to accommodate approximately 25,000 people in 8,000 dwellings. The Edmondson Park town centre is located in Liverpool LGA bordering the Campbelltown LGA and is proposed to include approximately 25,000sqm of retail/commercial floorspace. Edmondson Park has good connectivity to the M5 and M7 and has a train station along the South West Rail Link. Smeaton Grange

Smeaton Grange is located in the Camden LGA along the Camden Valley Way. Office space is available in areas zoned B5 Business Development and IN1 General Industrial. The industrial zoned land is currently under development, with approximately 80% of the land developed. The laned zoned B5 Business Development has a cluster of automotive retail and services. Offices available to lease and purchase are largely office/warehouse combinations on industrial zoned land. Liverpool

Liverpool is identified as a Regional City Centre under A Plan for Growing Sydney. Magnet infrastructure in the Liverpool centre include the Liverpool Hospital and Liverpool TAFE. The centre also contains a standalone shopping centre. Liverpool has good public transport connections, with train services along multiple rail lines and a bus interchange. The centre has access to the M5 via the Hume Highway. The centre is located near the South West Growth Centre and the recently approved Moorebank Intermodal Freight Terminal. The major concentrations of office space in the centre are on Macquarie Street, Bigge Street and Bathurst Street.

4.3 Competitive assessment

Competitive offer assessment

Table 6 compares the competitive offer of the subject site to other potential and existing business parks in the South West subregion. While the proposed business park is smaller than other potential business parks in the South West, the subject site benefits from access to magnet infrastructure, road transport, public transport and single ownership of the site. While the planned Leppington North business park is larger, the site is constrained by lot fragmentation, delays in infrastructure provision and lack of access to magnet infrastructure. None of the business park sites have easy access to executive, highly educated populations located in the north and east of Sydney, however the majority of potential business park sites are easy accessible to current and future populations in the South West Growth Centre.


TABLE 6 . COMPETITVE OFFER O F BUSINESS PARKS IN SOUTH WEST

Subject site Leppington North Central Hills Business

Park UWS

Hurlstone Agricultural

Moorebank Western Sydney Airport

Unconstrained land Largely unconstrained Heritage item on site

Largely unconstrained Some flood prone land

Unconstrained Unconstrained

Largely unconstrained Adjacent to State heritage item

Some constraints Flood prone land, heritage conservation area

Unconstrained

Park size

Moderate 12.7Ha Possible integration with UWS site

Excellent 79Ha

Moderate 45Ha

Poor 6.6Ha identified in Campbelltown Employment Lands Review. Possible integration with subject site

Excellent 140Ha

Potentially Excellent Dependent on development of Intermodal Freight Terminal

Potentially Excellent Dependent on development of WSA and BWSEA

Land fragmentation Single ownership Highly fragmented Developed Single ownership State owned land, different departments

Low fragmentation Low fragmentation

Support large, flexible floorspace

Excellent New business park development


Yes Varied lot sizes available

Potentially Potentially Potentially Potentially

Timely provision of infrastructure

Excellent Adjacent site serviced

Moderate Water and electricity not expected until 2018

Developed




Provided with airport development

Support for centre hierarchy

Moderate Might compete with Campbelltown-Macarthur

Moderate Might compete with Liverpool

Moderate Might compete with Narellan


Moderate Might compete with Glenfield, Ingleburn

Moderate Might compete with Liverpool

Excellent Unlikely to weaken other centres

Access to magnet infrastructure

Excellent Adjacent to university, access to hospital

Poor

Moderate Gregory Hills private hospital approved on site

Excellent On university campus, access to hospital

Poor

Moderate Proximity to Intermodal Freight Terminal

Excellent Access to airport


Subject site Leppington North Central Hills Business

Park UWS

Hurlstone Agricultural

Moorebank Western Sydney Airport

Road Transport Close to M5 Close to M5 and M7 corridor

Arterial roads Close to M5 Close to M5 Close to M5 Road upgrades and new motorway planned

Public Transport Near rail line On rail line Poor Near rail line On rail line On rail line Future provision to airport

Access to highly educated / executive labour force

Residential development proposed on site, local population and access via M5 and rail line

Local population, and closer to M5 and M7 road corridor

Local population, SWGC development

Local population and access via M5 and rail line

Local population, connected to SWGC population by SWRL

Remote from SWGC population, access to Liverpool population

More remote from SWGC population but closer to NW executive labour market and SW labour market

Prestige and branding Moderate University brand

Low Low Moderate University brand

Low Low High Aerotropolis Brand

High amenity

Moderate Watercourse on site, proximity to centres and retail on site

Potentially Low

Moderate Access to university campus and centres

Potentially Potentially Potentially

Source: SGS Economics and Planning, 2015

A comparison between the subject site and commercial centres in the South West subregion is shown in Table 7. The comparison shows that the subject site has the potential to provide larger floorplates than existing centres. As Edmondson Park has not yet been developed, the centre also has the potential to provide commercial space of varied sizes. However, the centre will also provide retail development, which will compete for space with commercial uses to service the local population. The comparison therefore shows that a business park offers different commercial floorspace to what is currently being provided (particularly the size of spaces) and is likely to attract new businesses rather than attract those in existing centres. A business park on the subject site offers a different form of amenity to centres in the South West subregion with more of a focus on the natural environment and landscaped areas. The centres in the South West generally do not have strong marketing and branding messages. The isolation of these centres from the rest of the Sydney metropolitan area and perceptions of the subregion hinders their prestige. The exceptions are Oran Park and Edmondson Park. These centres have been marketed through the development of the South West Growth Centre and, while they share the isolation of other centres, the branding of these places has focused on their positive attributes e.g. fibre optic internet connections in Oran Park and motorway accessibility in Edmondson Park.


TABLE 7 . COMPETITVE OFFER O F COMMERCIAL CENTRES IN SOUTH WEST

Subject site Campbelltown-

Macarthur Ingleburn Narellan Oran Park Smeaton Grange Edmondson Park Liverpool

Unconstrained land Largely unconstrained Heritage item on site

Some constraints Existing development, strata subdivisions and heritage items

Some constraints Existing development

Largely unconstrained Some heritage items

Unconstrained

Largely unconstrained Expansion limited by arterial road network

Some constraints Heritage item and some flood prone land

Some constraints Strata subdivisions, multiple heritage items and some flood prone land

Park size

Moderate 12.7Ha Possible integration with UWS site

N/A N/A N/A N/A N/A N/A N/A

Land fragmentation Single ownership Multiple ownership, strata subdivisions

Multiple ownership, strata subdivisions

Multiple ownership

Single ownership Multiple ownership, Fragmented ownership of undeveloped site

Multiple ownership, strata subdivisions

Support large, flexible floorspace


Poor Limited office spaces greater than 200sqm

Poor Moderate

Moderate Limited space available

Moderate Larger office floorplates available in industrial zone

Potentially – undeveloped but will compete with retail

Poor

Timely provision of infrastructure


Provided Provided Provided

Provided Fibre optic internet connection

Provided Moderate Provided

Support for centre hierarchy


Excellent Supports Regional City Centre

Excellent Supports existing centre

Moderate Expansion may impact on neighbouring centres

Excellent Supports existing centre

Moderate May impact Narellan

Excellent Site identified as a future centre

Excellent Supports Regional City Centre

Access to magnet infrastructure

Excellent Adjacent to university, access to hospital

Excellent Access to university and hospital

Poor Poor Poor Poor Poor Moderate Access to hospital


Subject site Campbelltown-

Macarthur Ingleburn Narellan Oran Park Smeaton Grange Edmondson Park Liverpool

Road Transport Excellent Close to M5

Excellent Close to M5

Moderate Near M5, no direct connection

Poor Arterial roads

Poor Reliance on arterial roads

Poor Reliance on arterial roads

Excellent Access to M5 and M7

Excellent Access to M5

Public Transport Moderate Near rail line

Excellent Two train stations

Excellent Train station access

Poor Poor Poor Excellent Train station access

Excellent Train station access

Access to highly educated / executive labour force

Residential development proposed on site, local population and access via M5 and rail line

Local population and SWGC population. Access via M5 and rail line


Local population and SWGC population.



Local population and SWGC population. Access via M5, M7 and rail line


Prestige and branding Moderate University brand

Poor Poor Poor Moderate Poor Moderate Poor

High amenity

Moderate Watercourse on site, proximity to centres and retail on site

Moderate Access to retail and services

Low Potentially increasing with implementation of Structure Plan

Low Moderate Low Potentially

Moderate Access to retail, services and Georges River

Source: SGS Economics and Planning, 2015


4.4 Implications

The office market in the South West is performing well. There is continued demand for office space in the LGA and for business park floorspace. However, there is a shortage of office space greater than 200 square metres in Campbelltown and Camden LGAs. The subject site offers a great potential for business park development under single ownership with access to magnet infrastructure and transport. The offer of the subject site is different to the planned business park at Leppington North due to the latter’s lot fragmentation, lack of magnet infrastructure and access to transport infrastructure. A business park on the subject site offers a different form of amenity to existing centres as well as a larger floorplate.


5 IMPACT ASSESSMENT

The following section provides an assessment of the economic impact of the proposed business park, based on the industry profile in Campbelltown centre and findings from the previous sections.

5.1 Industry profile in Campbelltown centre

Table 8 shows the 1 digit ANZSIC industry of employment within the Campbelltown centre2, based on the BTS Journey to Work data (2011). As highlighted, the three largest employers in the centre are Retail Trade, Public Administration and Safety and Health Care and Social Assistance, all of which are population drive industries. On the other hand, the ‘footloose’ (or strategic) industries, such as Information Media and Telecommunications and Financial services industry, only employ a much smaller proportion of jobs in the Campbelltown centre. The industry profile highlights that the primary role of the Campbelltown centre is population servicing rather than providing strategic employment.

TABLE 8 . INDUSTRY PROFILE O F CAMPBELLTOWN CENTR E BY 1 DIGIT ANZSIC: 2011

ANZSIC Industry code ANZSIC Industry No. of jobs % of total

employment

A Agriculture, Forestry and Fishing 7 0%

B Mining - 0%

C Manufacturing 101 1%

D Electricity, Gas, Water and Waste Services 3 0%

E Construction 54 1%

F Wholesale Trade 59 1%

G Retail Trade 1,142 17%

H Accommodation and Food Services 832 12%

I Transport, Postal and Warehousing 267 4%

J Information Media and Telecommunications 82 1%

K Financial and Insurance Services 266 4%

L Rental, Hiring and Real Estate Services 223 3%

M Professional, Scientific and Technical Services 423 6%

N Administrative and Support Services 189 3%

O Public Administration and Safety 1,098 16%

P Education and Training 422 6%

Q Health Care and Social Assistance 1,303 19%

R Arts and Recreation Services 57 1%

S Other Services 207 3%

X Inadequately described and Not Stated 179 3%

Total 6,914 100% Source: Bureau of Transport and Statistics, 2011

2 Campbelltown centre is defined by travel zone 3215.


A further break-down of the employment by 4-digit ANZSIC industry shows that the top 20 industries of employment within the Campbelltown centre are mainly population driven, with the exception of State Government Administration and Central Government Administration. This is presented in Table 5 below.

TABLE 9 . TOP 20 INDUSTRIES IN CAMPBELLTOWN CENTRE BY 4 D IGIT ANZSIC , 2011

ANZSIC Industry code ANZSIC Industry Town centre % total employment

Q Other Social Assistance Services 442 7%

O Local Government Administration 406 6%

H Takeaway Food Services 335 5%

G Supermarket and Grocery Stores 243 4%

I Rail Passenger Transport 236 4%

M Legal Services 222 3%

O Police Services 194 3%

G Department Stores 185 3%

H Cafes and Restaurants 163 3%

O State Government Administration 149 2%

Q General Practice Medical Services 139 2%

H Catering Services 138 2%

L Real Estate Services 136 2%

G Clothing Retailing 135 2%

P Primary Education 121 2%

X Not stated 119 2%

S Hairdressing and Beauty Services 116 2%

O Central Government Administration 115 2%

N Employment Placement and Recruitment Services 115 2%

P Secondary Education 103 2% Source: Bureau of Transport and Statistics, 2011

5.2 Impact on Campbelltown-Macarthur

Functional overlap

As noted above, employment in the Campbelltown centre is mainly in the form of population service jobs. Conversely, a business park is likely to host professional service industries and knowledge based jobs. Furthermore, a business park has the potential to attract larger businesses as the floorplates on offer are likely to be larger than what is currently available in the Campbelltown LGA. A business park has the potential to generate different commercial activity to what is currently on offer in Campbelltown-Macarthur. From the above, it can be concluded that there will be very little functional overlap or competition between Campbelltown-Macarthur and proposed business park development at the subject site.

Positive impact to existing centre

Future workers and residents on site may further support the existing centre by generating new patronage. While a neighbourhood retail centre of around 300 sqm GFA is proposed on site, this retail offer is expected to mainly cater for the local retail needs of the on-site residents residing in the proposed 620 new residential homes and over 500 senior housing units. The typical demand for local retail floorspace generated by the proposed residential development (including senior housing) is expected to be higher


than the size (i.e. 300 sqm GFA) of proposed neighbourhood centre. Therefore, the neighbourhood retail centre will have little negative impact on the retail centre hierarchy, as the vast majority (if not all) of the proposed retail floorspace will serve the local retail needs of on-site residents. Conversely, future residents and workers on the subject site are likely to visit Campbelltown-Macarthur for higher retail and service needs due to the variety of services available and proximity to the subject site. The train stations at Campbelltown and Macarthur may also be utilised by future residents and workers in the proposed development, generating further activity in the centres. In other words, Campbelltown-Macarthur will be likely to benefit from the additional patronage generated by the proposed development on the subject site.

Clustering potential

The subject site is in close proximity to the University of Western Sydney Campbelltown Campus and Campbelltown TAFE Campus. The subject site is also located near the Campbelltown Hospital (public and private hospitals). In addition to the hospitals and the Campbelltown Hospital Clinical School currently being developed, the Centre for Health Research is also located at the University of Western Sydney Campbelltown Campus. There is a great potential for the subject site to build upon the existing strength of the medical and health related industry in the vicinity. Given its proximity to the education and health infrastructure described above, the subject site could potentially benefit from linkages to the existing research centre and new medical facilities at the Campbelltown Hospital Clinical School and the upgraded Campbelltown Hospital. The agglomeration analysis finds that the Medical and Other Health Care Services, Hospitals and Tertiary Education industries demonstrate greater clustering potential than their own industry groups they belong to. Given its close proximity to these industries, the analysis suggests that the proposed business park site has the potential to host a range of allied medical activities or businesses that benefit from close links to University and research centres.

Conclusion

In conclusion, we suggest that the proposed development on the subject site will have little negative impact on Campbelltown-Macarthur, due to the following main reasons: There is little functional overlap between Campbelltown-Macarthur and proposed business park

development on site. The industries within proximity to the subject site have clustering potential. This suggests that there

is potential for the business park to attract activities that would benefit from linkage with the University and medical facilities but would not be otherwise located to Campbelltown centre.

Campbelltown-Macarthur centre may also benefit from the additional patronage generated by the proposed business park, residential and senior housing development.

The neighbourhood retail centre being proposed on-site is expected to cater for the local retail needs of on-site residents and therefore will not negatively impact on the retail centre hierarchy.


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Level 1, 55 Woolley Street Dickson ACT 2602


HOBART

Unit 2, 5 King Street Bellerive TAS 7018

+61 (0)439 941 934 [email protected]

MELBOURNE

Level 5, 171 La Trobe Street Melbourne VIC 3000


SYDNEY

Suite 12, 50 Reservoir Street Surry Hills NSW 2010


Documents

Economic Analysis of ampbelltown usiness Park · 2017-06-06 · Economic Analysis of ampbelltown usiness Park 3 FIGURE 1. PROPOSED STRU TURE PLAN s, 2015Source: apital Syndication