7. APP F. Economic Matters RFI Response

Page 2

18 MARCH 2015                                               PROJECT NO. 7600
                                                            FILE REFERENCE: NOOSAVILLE_RFI_150315_V1.2.DOC




To Whom It May Concern:



                               Response to Information Request


Application No. MCU14/0102
Matters Considered: Economic Matters


Information Required: Detail aspects of the proposed development for which the need
and impact relates
The assessment focuses solely on (a) the convenience retailing (shop) component attached to the
service station occupying 123m2 and (b) the proposed entertainment and dining business (food &
beverages) occupying 137m2 (and an additional 43m2 of attached outdoor dining). In total, therefore,
we are addressing 303m2 of floor area.
It is understood that the shop component will offer a range of convenience retailing functions, as has
become increasingly the norm at modern service station/convenience centres. It is understood that
Seven-11 will be the operator of what is in effect a “modern corner store”.
The remaining entertainment and dining business (food & beverages) is envisaged to be a carvery-
style offer, catering predominantly for the takeaway needs of the nearby industrial precinct. It will offer
sit down dining opportunities in both an indoor and outdoor environment. In this regard, it has been
described as something of a “tradies’ café”.
The remainder of the proposed development comprises a total of 2,390m2. As such, the total GFA of
the proposed development is 2,650m2.

Information Required: Discussion on the resultant loss of industrial land to the
inconsistent uses
The total area of the two facilities subject to this response is 303m2. This represents 11.4% of total
development GFA. The remainder of the development is consistent with the designation of industrial
use. The proposed non-industrial components are appropriate ancillary services to the overall
Noosaville Industrial Estate, in which the subject site is located.
As noted in the Economic Report (refer Section 4.6.2) a “visual inspection of the nearby business
precincts yields an estimated 200,000m2 of potential commercial and industrial floorspace”. Some of
this has been developed; some has not. The proposed uses that are strictly not “industrial” in nature
represent 0.15% of this total floorspace. On this assessment it is reasonable to conclude that the
“loss” is negligible.


                                                                                Urban Analytics Australia Pty Ltd
                                                                               PO Box 139 Tamborine QLD 4270

Page 3

Furthermore, as ancillary uses, the proposed development (service station and convenience retailing +
“tradies’ café”) would contribute to the improved working amenity of the Noosaville Industrial
Precinct. Opportunities for Precinct workers (and visitors) to satisfy their convenience retailing and
fast-food needs afforded by the proposed development would improve the overall attractiveness of
the Precinct to attract and retain businesses. In this sense, the proposed uses are complementary to
the surrounding industrial uses rather than being in conflict with them.

Information Required: Trade Area (data and scope)
A revised trade area definition is provided below, in line with the suggestions of the Information
Request. The overall trade area comprises three distinct components:
•   The Industrial Catchment – in the main, the Noosaville Industrial Precinct (marked by a heavy blue
    line)
•   The Primary Catchment – the Noosaville area to the west of Shorehaven Drive (marked by a heavy
    white line)
•   The Secondary Catchment – the residential areas to the east of Shorehaven Drive
Aerial Image: Trade Areas




The residential population projections for the catchment are summarised in Table 1 below (OESR
Medium Series). The worker population of the industrial precinct is estimated to be approximately
4,700. The industrial precinct could eventually accommodate up to 11,764 workers (refer Economic
Report p. 20).




PAGE 2 OF 9

Page 4

Table 1: Population Projections
                   2011           2016             2021          2026           2031    2036             Change

Primary            3,619          4,241            4,353         4,335          4,375   4,396            +747

Secondary          3,929          4,547            4,738         4,746          4,804   4,841            +912

Total              7,586          8,787            9,091         9,081          9,179   9,237            +1,659
Source: OESR Medium Series


Information Required: A more detailed assessment of the existing centres network that
should report the total GFA of floor space provided within the centre zones … and a
breakdown of that floor space with a particular focus on convenience floor space,
dining and take-away food floor space and any vacancies
Centres
Two main centres service the trade area. They are:
•      Noosa Civic, and
•      Noosa Village Shopping Centre
Noosa Civic is approximately 650m from the subject site (as the crow flies), and by road approximately
800m. The total centre area of Noosa Civic is 31,605m2 of which total retail area is 25,496m2. The
Centre is anchored by Big W (6,613m2) and Woolworths Supermarket (3,507m2), with 97 speciality
shops on one level. Annual pedestrian traffic is estimated to be 4,000,000.1 Eleven fast-food stores and
cafés operate out of Noosa Civic, of which five are attached to the Food Court. The fast food and café
operators are summarised in the table below. The floorspace occupied by these operators was
estimated by visual inspection by the author. Based on these estimates, the fast food/café offer at
Noosa Civic comprises approximately 1,385m2 in total. The food court supports five operators, and
seats 251 persons.

Table 2: Noosa Civic Fast Food and Cafés
           Operator                           M2                          Operator                  M2

Jamaica Blue                     120m2                           Red Rooster            Attached to the Food
                                                                                        court with total floor area
Donut King                       120m2                           Sunshine Kebabs
                                                                                        (inclusive of kitchen and
The Bake House                   80m2                            J1 Sushi               back of house) of 800m2.

Juice Bar                        25m2                            Subway

The Coffee Club                  120m2                           Muffin Break

Chocolat                         120m2

Total                            585m 2                                                 800m 2
Source: personal inspection 12 March 2015

Noosa Village Shopping Centre is approximately 2,000m from the subject site (as the crow flies). It is
located centrally in the Secondary Catchment, as illustrated in the Aerial Image above. The Centre is

1
    Property Council of Australia 2009 Queensland Shopping Centre Directory




PAGE 3 OF 9

Page 5

anchored by a Woolworths Supermarket (2,582m2), There are 25 specialty stores occupying 1,832m2.
The Centre’s total retail area is 3,611m2. Annual pedestrian traffic is estimated to be 2,853,898.2 The
Centre offers a bakery, a coffee shop and a Donut King. Together these comprise approximately
200m2.
Fast Food
In addition to the fast food within Noosa Civic, there are three fast food providers operating within the
Noosaville Industrial Precinct. They are:
•      Hardwork Café (Venture Drive). This facility occupies an estimated 70m2 + 45m2 for outdoor
       dining. It provides outdoor seating for 24 persons.
•      Noosaville Snack Bar (Eumundi Noosa Road). This snack bar occupies an area of approximately
       40m2, and offers indoor seating for 8 persons. No outdoor seating is available. It is located directly
       opposite the subject site.
•      Snack Bar (Rene Street). This facility occupies approximately 70m2. Outdoor seating for 4 is
       offered.
In total, therefore, there is presently an estimated 280m2 of fast food provision + 45m2 of attached
outdoor dining (325m2). Total seating capacity offered is in the order 36 seats.
Centres and Standalone: fast food and café
When combined the total floorspace of fast food and café offers in the two Centres and the three
standalone offers is an estimated 1,710m2. The proposed “tradies’ café” of 137m2 (with another 43m2
of outdoor seating space) would add 10.5% to the total fast food and café supply floor space. Within
the industrial district, the proposed addition would add approximately 55.3% to existing supply.
Future total supply would, including outdoor dining space, be in the order of 505m2.
Convenience retailing
Neither of the two major centres identified are convenience in nature. They are anchored by mini-
majors and full line supermarket tenancies, and service extensive catchments. The total retail area of
the two centres combined is 29,107m2. The proposed convenience retail component of the service
station is in the order of 123m2. This is equivalent to 0.42% of identified total retail supply.

Information Required: Outline how the proposed development would better meet the
take-away food needs of industrial area workers, particularly in the context of the
range and choice of food outlets provided at Noosa Civic.
The current fast food and café needs of industrial area workers are met by existing stores within the
precinct (as outlined above) and to a significantly lesser extent those food outlets provided at Noosa
Civic. The locational convenience of existing fast food outlets was considered in the Economic Report
(refer in particular to Section 5.1.1). That assessment indicated that there is in spatial terms a “gap in
worker meals servicing the north-easterly segment (in which the subject site is located), as well as
sections of the southern segment”.
As indicated above, Noosa Civic is approximately 800m from the subject site by road (1.6km round
trip). Given its location, the subject site is, relatively speaking, much closer to Noosa Civic than most


2
    Property Council of Australia 2009 Queensland Shopping Centre Directory




PAGE 4 OF 9

Page 6

other premises within the industrial precinct. Indeed, for some premises (such as those at the southern
end of Reme Street) the drive to Noosa Civic is approximately 6.6km return.
The subject site’s location vis-à-vis workers in the industrial precinct is significantly more convenient
that Noosa Civic. The proposed development is within ready walking distance for the majority of
premises within the industrial precinct, whereas it is more probable that visits to Noosa Civic would
necessitate car travel.
Aside from accessibility, it is also worth considering the ambience of the Noosa Civic centre and how
it may compare to a “tradies’ café”. Noosa Civic is a modern, air-conditioned facility servicing a broad
catchment of residents and visitors. As noted above, it draws annual pedestrian traffic of
approximately 4,000,000. The fast food and café offers within the Centre are designed and positioned
to add to the overall retailing experience. The configuration of the Centre is also not conducive to
what we can call “convenience” visits (quick stops to “grab some lunch” for example). It is necessary
to first park one’s car before going into the Centre. For these reasons, I hypothesise that few industrial
precinct workers frequent the fast food offers at Noosa Civic. To test this, I undertook a site visit on 12
March 2015, when I visited the Centre at lunchtime (12-12:30pm).




PAGE 5 OF 9

Page 7

The two photographs above were taken at the time. They show the Jamaica Blue café and adjacent
dining areas. The evidence suggests strongly that the dominant demographic are older consumers
and women. My observations over the course of 30 minutes identified one male wearing a “trade”
shirt (advertising a plastering business). On the basis of this period of observation, it would appear
that the working hypothesis is valid.
The proposed “tradies’ café” is specifically designed to serve the trades worker market. A trades
worker, in work attire, would not feel out of place at the proposed facility, whereas it is clear that trade
attire would be somewhat “out of place” at Noosa Civic.

Information Required: Provide an assessment based on a rate of population growth
that is generally consistent with the OESR medium series projections.
The population data is presented above and is the basis of the following assessment.

Information Required: Provide an analysis that outlines all assumptions and data used in
the analysis (e.g. Per capital expenditure estimates).

Table 3 is the per capita estimated expenditure for key product categories relevant to the assessment.
The data are estimates drawn from MarketInfo 2012 based on the Household Expenditure Survey.

Table 3: $/Person per year (2012)
                            Primary       Secondary      Sunshine
                           Catchment      Catchment       Coast
 Food Groceries                  $1,500       $1,467         $1,532
 Non-food Groceries               $707          $679           $735
 Tobacco                          $554          $575           $534
 Takeaway                         $695          $671           $719


Table 4: $/Person per year projected
                              2011          2016           2021           2026           2031           2036

 PRIMARY CATCHMENT
 Food Groceries              $5,428,500   $6,361,500     $6,529,500      $6,502,500     $6,562,500     $6,594,000
 Non-food Groceries          $2,558,633   $2,998,387     $3,077,571      $3,064,845     $3,093,125     $3,107,972
 Tobacco                     $2,004,926   $2,349,514     $2,401,590      $2,401,590     $2,423,750     $2,435,384
 Takeaway            $2,515,205           $2,947,495     $3,025,335      $3,012,825     $3,040,625     $3,055,220
 SECONDARY CATCHMENT
 Food Groceries              $5,763,843   $6,670,449     $6,950,646      $6,962,382     $7,047,468     $7,101,747
 Non-food Groceries          $2,667,791   $3,087,413     $3,217,102      $3,222,534     $3,261,916     $3,287,039
 Tobacco                     $2,259,175   $2,614,525     $2,724,350      $2,728,950     $2,762,300     $2,783,575
 Takeaway                    $2,636,359   $3,051,037     $3,179,198      $3,184,566     $3,223,484     $3,248,311


Table 4 projects the estimated annual expenditure per person (2012) into the future, based on the
population forecasts presented in Table 1 above. Inflation is assumed to be zero, which amounts to an
extremely conservative assessment of future expenditure.




PAGE 6 OF 9

Page 8

As shown in Table 5, in 2012 dollars, Primary Catchment expenditure on groceries and tobacco is
estimated to be $9.99m (2011) growing to $12.14m by 2036. For the Secondary Catchment,
expenditure on groceries and tobacco is estimated to be $10.7m (2011) growing to $13.17m by 2036.
The major grocery chains would capture approximately 85% of this expenditure. The residual (15%) of
available expenditure is captured by other retailers, usually so-called convenience stores such as those
proposed in the development. Retail offers of ~200m2 in this regard do not represent a competitive
offer to the retailing majors.

Table 5: Expenditure Shares (2012 $)
                               2011         2016          2021          2026           2031            2036
 Groceries and Tobacco
 (Primary)                   $9,992,059   $11,709,401   $12,008,661   $11,968,935    $12,079,375    $12,137,356
 Groceries and Tobacco
 (Secondary)                $10,690,809   $12,372,387   $12,892,098   $12,913,866    $13,071,684    $13,172,361
 Total                      $20,682,868   $24,081,788   $24,900,759   $24,882,801    $25,151,059    $25,309,717
 Majors' share (85%)        $17,580,438   $20,469,520   $21,165,645   $21,150,381    $21,378,400    $21,513,259
 Residual (15%)              $3,102,430    $3,612,268    $3,735,114    $3,732,420     $3,772,659     $3,796,458


As the proposed development would only service a convenience demand, it can reasonably be
expected that it will capture market share from this residual expenditure. It is likely to draw the
majority of its trade from the Industrial Catchment and the Primary Catchment, and to a lesser extent
passing trade from residents of the Secondary Catchment. Given that the likely impact (refer below) is
negligible any estimate of market share distribution across catchments would be a fraught exercise.
We can note that the expenditure estimates are for the residential population only. As noted earlier,
there are at least 4,700 additional persons within the area as workers in the industrial precinct.
Assuming that each worker spends on average $240 per year on groceries and tobacco on
convenience groceries (equivalent to 8.7% of Primary Catchment per capita expenditure per year), this
would add an additional $1,128,000 to current groceries expenditure. Added to the residual (2011) this
would provide a potential pool of residual + worker expenditure of $4.23m for convenience retailing.

Information Required: Provide a reviewed calculation of worker expenditure on take-
away food adopted in section 4.6 of the Economic Report so that it represents only a
proportion of the average per capita expenditure on take-away food, and revise any
estimates of worker expenditure.
The Economic Report estimated that a worker would spend on average $1,440 on takeaway food each
year. This figure is considerably higher than the per capita expenditure for the surrounding catchment.
The Information Request rightly seeks clarification on this point, given the disparity. Firstly, it needs to
be noted that the household expenditure survey estimates provide an average for the entire
population. There is thus a range either side of this average. Our estimates recognise that industrial
precinct workers are likely to exist at the outer limits of the distribution range of expenditure on
takeaway foods. This is for the reason that unless they bring food to work, they have no choice but to
eat out.
The estimate of an average of $1,440 per person per year is based on the following assumptions:
•   A worker eats out 4 days a week and does so for 46 weeks a year (total eat-out days = 184)




PAGE 7 OF 9

Page 9

•   Each of these days the worker will spend $7.82 on takeaway food. This is a very conservative
    estimate given that a typical cup of coffee (or cold drink) is between $3.50 and $4.00, and a
    sandwich or hamburger costs over $7.00. (These prices are based on observed prices at the
    takeaway offers in the industrial precinct when I conducted research on 12 March 2015.)
Based on this very conservative estimate, it is possible to extrapolate a potential annual takeaway
spend from the workers of the industrial precinct. Assuming that there are 4,700 workers, the total
takeaway expenditure is in the order of $6,768,000. This level of expenditure can support
approximately 1,436m2 of takeaway floorspace (assuming Retail Turnover Density [RTD] of $4,714/m2
for takeaway food).

Information Required: Provide an estimate of the likely turnover of the development
(or those parts of the development the economic need and impact assessment relates
to), and utilise this estimate to assess the likely impact of the proposed development
on the centres network.
We would expect that the service station (convenience retail) element of the proposed development
would achieve annual gross turnover of approximately $500,000. This turnover represents a viable
volume of activity and is feasible. This is equivalent to ~$4,065/m2. On this volume, the proposed
centre would be capturing approximately 16% of residual expenditure or 11.8% of residual + worker
expenditure (2011 estimates) (refer Table 5). As a percentage of total expenditure, the anticipated
turnover is equivalent to 2.4% (or 2.3% if the worker expenditure is added to the total base). Either
way, this represents a negligible total impact on existing centres.
As for takeaways, the worker expenditure alone can support 1,436m2 of takeaway food offer. As the
proposed “tradies’ café” is not positioned competitively vis-à-vis Noosa Civic in particular, the
relevant consideration is in relation to the takeaway and café floorspace that is located within the
industrial precinct. As noted above, with the proposed development the total area is in the order of
508m2. This is substantially below the quantum that the estimated worker expenditure could support.
Indeed, based on the RTD outlined above, this amount of fast food and café floorspace could be
supported by expenditure of $2.27m, which is 33.6% of total estimated worker takeaway expenditure.
As such, even if the already conservative estimates are further diluted by a factor of 2/3, the proposed
“tradies’ café” could still be supported along with the other three fast food providers in the industrial
district.

Conclusions
The proposed service station and “tradies’ café” development meets the needs of convenience
shoppers from the surrounding residential community and the workers of the nearby industrial
precinct. These offerings contribute to the amenity of the nearby population – and in particularly the
convenience of the workers in the industrial precinct – and are extremely unlikely to give rise to any
significant economic impacts on retailers or takeaway food and café operators at the supermarket-
anchored centres located within the relevant Catchment.
Put plainly, the proposed offerings – at the scale contemplated – meet a discernible need and are
unlikely to generate discernible adverse impacts on the two major centres and their tenants.
Combined, these centres offer almost 30,000m2 of retailing and generate annual pedestrian visitation
of over 6.8m. In relative terms, therefore, a proposed convenience retail offer attached to a service




PAGE 8 OF 9

Page 10

station of 123m2 together with a “tradies’ café” of 137m2 (and 43m2 outdoor dining) represents a
floorspace impact of approximately 1.01%.
The proposed development is a proportionate response to an existing need and would add to the
overall quality of life of local residents and workers.
Please do not hesitate to contact me should you have further queries.
Yours sincerely




WARWICK POWELL
Managing Director


Email: [email protected]
Mobile: 0411 628 084




PAGE 9 OF 9