MCU14/0106 & OPW15/0001 Appendix B - Retail Needs Response

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Noosa Response Report on
Retail Needs

Prepared for QIC

June 2015

 

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URBIS STAFF RESPONSIBLE FOR THIS REPORT WERE:

Director lan Shimmin
Senior Consultant Andrew Smith
Job Code MPE1-2197

© Urbis Pty Ltd
ABN 50 105 256 228

All Rights Reserved. No material may be reproduced without prior permission.
You must read the important disclaimer appearing within the body of this report.
URBIS

Australia Asia Middle East
urbis.com.au

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TABLE OF CONTENTS

INTPODUCHON isiisccierecsenasnssovsins sencesvanencescunsesseesencuessancanceawecueanczcuacea excncrueus cess iausay sea anenuneneuaamaaeoaesanteatvaay saan 1

1

Trade Area and Expenditure

 
 
 
 

 

 

 

 

 
  
  
 
 
  
 
 
 
  
 
 
 
 

 

 

 
 

 
 

 
 

AA Trad@Area Definition ..cs.1s.ersisreresorenaueenuerrensnesenmveneeonenseenemreermmnenneiseouiieeueeteereNien’
1.2 Expenditure Propensity

1.3 Growth Rate

1.4 Visitor Expenditure

2 Vacancy Analysis

P| Noosa Civic

2.2 Vacancy Rates

2.3 Centres Analysis..

3 Intercept Surveys

3A Noosaville Methodology

3.2 Maroochydore PRAC

4 Transaction Data

41 Quantium Methodology .

4.1.1. Quantium Methodology .

4.1.2 Urbis Methodology

5 Needs Analysis ..

5.1 Target Closure...

5.2 Benchmarks

5.3 Floorspace Deficit

6 Impact AnalySis ..........ccecssecssseesesesssessscsnsssesssecesseesevensescenseseeseeseeseesnssasnsaseseesecataeaeneeaeeseeneesseseesnees
6.1 Proposed Developments ...

6.2 Productivity ........

6.3 Centres Network...

7 Consumer Travel

7.1 Non-standard Parameter Values .

8 Employment Effects

8.1 National Accounts Input-Output Data.

9 Catalyst for Future Diversified Developme nt .........--:s:cesseeseessesestesessetstestseeeseneeseesesesatseseanacses 23
9.1 Retail as a Driver of Activity

9.2 Synergy of Uses

10 Conclusions

10.1. Efficacy of Original Retail Needs Assessment

DISCLAIM OM wesessorcsnestsvssiancisasciiacssnienissvovansessnet saccutauveseuesves venuesisaunuacisatandessibansusnsstentinaesteniee cu nmremieUNeN aid 30

URBIS

NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

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Introduction

This report is in response to the Information Request issued by Noosa Council on 12" February 2015 in

relation to Application No. MCU14/0106 & OPW15/0001.

The matters referred to herein relate to the issues raised and the information required that refer to the

Retail Needs Assessment prepared by Urbis in December 2014.

For convenience and clarity we have adopted sub headings that relate to the issues raised by Council.

The sections of this report relate to logical topic areas that align with the issues raised, and are as follows:

1. Trade Area and Expenditure
- Definition
- Expenditure Propensity
- Real Growth Rate
- Visitor Expenditure
2. Vacancy Analysis
- Noosa Civic
- Vacancy Rates
- Centres Analysis
3. Intercept Surveys
- Noosaville Methodology
- Maroochydore PRAC
4. Transaction Data
- Quantium Methodology
5. Needs Analysis
- Target closure
- Benchmarks
6. Impact Analysis
- Proposed Developments
- Productivity
- Floorspace Deficit
- Centres Network
7. Consumer Travel
- Non-standard Parameter Values
8. Employment Effects
- National Accounts Input-Output Data
9. Catalyst for Future Diversified Development
~- Retail as a Driver of Activity
- Synergy of Uses
10. Conclusions
- Efficacy of Original Retail Needs Assessment

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NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

INTRODUCTION 1

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Please note that reference to the ‘Noosa Civic - Retail Needs Assessment’ report lodged with the
application is abbreviated to the ‘DA report’.

URBIS

2 INTRODUCTION NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

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1 Trade Area and Expenditure

4s TRADE AREA DEFINITION

Information request:

‘The extent of the southern boundary of the Secondary South Trade Area raises some
concern in relation to how the expanded Noosa Civic might interact with the Maroochydore
PRAC and, to a lesser extent, the Nambour MRAC’

‘...further discussion would reinforce the case for its inclusion’.

Response:

The issue, as noted above, refers to the Secondary South sector of the Noosa Civic trade area, although
the area including Coolum Beach (postcode 4573), which has been identified as the area of most interest,
is within the Secondary South-East sector.

In any event, it is notable that Noosa Civic currently captures market shares of 4.0% from the Secondary
South-East and 9.6% from the Secondary South. Both of these market shares indicate that the defined
areas are both solid, and justifiable, secondary sectors. They also indicate that more than 90% of
resident's retail spending is directed to other centres, including Maroochydore.

Given the strength of these areas as secondary sectors it is also apparent that the further expansion of
the Maroochydore PRAC, most notably Sunshine Plaza, would not diminish the relevance of these
sectors as secondary sectors for Noosa.

The proposed expansion of Noosa Civic is forecast to result in market shares from the Secondary South-
East increasing from 4.0% to 7.6%, or +3.6% (see Table 7.8 on page 106 of the DA report. In other
words, even after the proposed expansion of Noosa Civic, residents of the Coolum Beach area are still
expected to direct around 92% of their retail wallet to other centres such as the Maroochydore PRAC.

The Maroochydore PRAC serves a very broad trade area, and Coolum Beach would represent a
relatively low proportion of Maroochydore’s customer base. Consequently, in an overall sense, any
diversion of trade from the Maroochydore PRAC to Noosa by residents of the Secondary South-East, as
a consequence of the proposed development, would be much lower than -3.6% due to the relevance of
other parts of Maroochydore’s trade area.

The impact assessment indicates an expected impact on the Maroochydore PRAC of -0.9% in 2018,
which would not be discernible in the context of normal business fluctuations. More importantly, despite
the proposed expansion to Noosa Civic, the Maroochydore PRAC is forecast to achieve turnover growth
due to the extensive trade area, of +15.8%, prior to taking into account the approved development of
Sunshine Plaza.

Accounting for the Sunshine Plaza expansion, assuming it commences trading prior to 2018,
Maroochydore’s growth would be greater than indicated (see Table 8.5 on page 117) and the impact of
Noosa Civic would be lower.

Finally, a high level analysis of the implications of excluding Coolum Beach from the Noosa trade area
would not affect the findings of our assessment. Both the current and future business from this area
would be accounted for as ‘turnover from beyond’ the main trade area, which simply means that the
‘rogue’ element, or origin of trade from outside the trade area, would be greater. This would also weaken
the integrity of the impact analysis in so far as it relates to shoppers from outside the trade area.

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NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2 TRADE ARES AND ESPENOITURE 3

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2 EXPENDITURE PROPENSITY

Information request:

‘Retail expenditure propensities for each of the identified trade areas have not been
reported in the Retail Needs Assessment, with propensities only reported for the primary
trade area and the aggregation of all trade areas.

Retail expenditure propensities for the trade area utilised are higher than the State average
despite residents of the trade area having significantly lower incomes and still subject to
significant housing costs. Limited explanation is provided for this apparent discrepancy’.

Response:
Retail expenditure propensities for each trade area sector are shown in Tables1.1 and 1.2 below. While

Table 1.1 updates Table 5.6 in the DA report, due to a transposition error, the analysis throughout the
report is unaffected. The error was due to an earlier version of the table not being replaced in the final

report.

Trade Area Retail Spending Per Capita, 2014

NOOSA CIVIC TRADE AREA ($2014, INCL GST) TABLE 1.1
Noosa Civic MTA Var'n from

Product Group QLD PTA MTA QLD
Food Retail 5,788 6,049 5,981 +3%
Food Catering 1,424 1,346 1,367 -4%
Apparel 1,186 1,138 1,150 -3%
Homewares 963 968 989 +3%
Bulky Goods 1,489 1,588 1,622 +9%
General/Leisure 1,646 1,692 1,726 +5%
Serices 506 558 543 +7%
Total Retail Spending 13,002 13,340 13,378 +3%

S, Marketinfo 2012, Australian Nationa Accounts: National Income, Expenditure and Product Accounts (5206.0) ; Urbis

Table 1.2 shows the retail expenditure propensities by product group for each trade area sector. These
are consistent with the outcomes shown in Tables 5.7-5.8, on pages 80-82, of the DA report.

2014 Retail Spending Per Capita

Cee eee a RN ee cca nace ae ee ete et TABLE 1.2
Var.
Food Food Home- Bulky —_Leisure/ Retail Total from
Retail Catering Apparel wares Goods Genera; Services Retail Qld.
Primary 6,049 1,346 1,138 968 1,588 1,692 558 13,340 +3%

Secondary:

North East 6,226 1,617 1,300 1,153 1,651 1,806 635 14,387 +11%
South East 5,952 1,404 1,180 985 1,571 1,713 529 13,334 +3%
South 5,892 1,305 1,172 971 1,753 1,764 522 13,379 +3%
North West 5,824 4,231 1,017 925 1,617 4,707 493 12814 -1%
Total Secondary 5,955 1,375 1,154 997 1,635 1,739 538 13,393 +3%
Main Trade Area 5,981 1,367 1,150 989 1,622 1,726 543 13,378 +3%

Queensland

5,788 1,424 1,186 963 1,489 1,646 506 13,002 -

2011 ABS

   
 

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4 TRADE AREA'AND EXPENDITURE NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

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As indicated on page 80 of the DA report, retail spending levels are based on estimates derived from
Marketinfo, a widely used source of retail spending data in Australia. The Marketinfo estimates are
calibrated to national data published by the ABS and are ‘reality checked’ by Urbis, as well as a group of
national retailers and research departments associated with the managers of Australia’s main REITs,
prior to each public release by MDS.

The drivers of spending levels are wide and varied, and although income is the main factor, there are
many other variables as well. In areas such as the Noosa trade area, where average incomes are lower
than the state average due to a lower proportion of very high income earners, and there is a high
retirement population and relatively high disposable income due to low mortgages, it is possible that
residents direct a higher proportion of their income to retail needs. This is shown in Table 1.3 below,
where there is a low proportion of mortgaged home ownership, as well as low labour force presentation
and a high proportion of residents aged over 55 across the trade area.

2014 Retail Spending Per Capita & 2011 Demographic Drivers

 

 

 

NOOSA CIVIC TRADE AREA TABLE 1.3
2014 Retail % Home
Spending Per 2011 Income Ownership (no Labour Force
Capita Per Capita mortgage) Participation % Aged over 55
Var. Var. Var. Var. Var.
Total from from from from from
Retail Qld. Qld. Qld. Qld. Qld.
Primary 13,340 +3% 38,256 -14% 38%  +8% 56% -11%
Secondary: -
North East 14,387| +11% 43,907 -1% 34% +4% 64% -3% 33% | +8%
South East 13,334 +3% 41,431 -7% 28% -1% 66% -1% 26%  +2%
South 13,379 +3% 40,221 -9% 35% — +6% 64% -3% 28%  +3%
North West 12.814 1Y 35,529 -20% 39%  +9% 59% -8Y 34% 49%
Total Secondary 13,393 +3% 39,963 -10% 34%  +4% 63% 4% 30% +5%
Main Trade Area «13,378 -+3% 39,508 -11% 35% 45% 61% -6% 32%|  +8%

Queensland 13,002 - 44,354 - 30% - 67% ee 25% -

1.3 GROWTH RATE

Information request:

‘The Retail Needs Assessment includes allowance for real growth in per capita expenditure
in the order of 1.8% per annum, which is considered high’.

Response:
As indicated in the DA report:

Real per capita spending growth ... is forecast to average around 1.8 % per annum to
2031. The average rate of ‘real’ growth over the past 20 years in Australia has been 2.6%
per annum but we expect more subdued growth going forward. Given this relatively
conservative forecast by historic standards the probability of a higher real growth rate is
arguably greater than the downside.

In light of evidence regarding the historic long term trend, and our analysis of the drivers of retail spending
growth over time, it is our firm view that an overall real growth rate of 1.8% is appropriate. Please note,
however, that this is an average rate across all retail categories.

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NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2 TRADE-AREA AND EXPENDITURE 5

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The rates adopted in the DA report are 1.1% for food and 2.4% for non-food, although there is further
discrimination by product group and also by period. Please note that price deflation is apparent in some
categories, particularly homewares and bulky goods, and hence the rate of ‘real’ growth is often not
readily apparent. The growth rates adopted are summarised as follows (see Table 1.4 below):

Real Per Capita Spending Growth

NOOSA CIVIC MAIN TRADE AREA cccasepsmsatainsiicisninescincsucsiausadienneninceneuilt tle TABLE 1.4
Food Food Home- Bulky Leisure/ Retail Total Non-
Retail Catering Apparel wares Goods Genera; Services Retail Food Food
2014-18 0.9% 1.3% 2.1% 3.1% 2.5% 2.6% 1.7% 1.7% 1.0% 2.5%
2018-21 1.0% 1.4% 2.2% 3.1% 2.6% 2.6% 1.8% 1.8% 1.1% 2.6%
2021-31 1.0% 1.3% 2.1% 2.8% 2.3% 24% 1.7% 1.7% 1.1% 2.3%
2014-2031 1.0% 1.3% 2.1% 2.9% 2.4% 2.5% 1.7% 1.7% 1.1% 2.4%

Source 2 Urb
Source : Urbis

1.4 VISITOR EXPENDITURE

Information request:

‘The Retail Needs Assessment suggests the pool of tourism retail spending in Noosa
(assumed to mean Noosa Heads-Noosaville) would increase by $105 M between 2014 and
2023 but does not provide a base estimate or end year estimate’.

Response:

The Information Request seeks an expanded analysis of available tourism expenditure within the Noosa
Heads-Noosaville area that also provides estimates for 2014, 2018, 2021 and 2031.

Please note that the estimate noted above (see p85 of DA report) is based on ‘a conservative average
tourist spend of $50 per day on retail goods and services....’ As a guide, Tourism Research Australia
estimated average retail spending per visitor night for international tourists at $68 with a lower $58 for
domestic tourists in 2014. These figures are only available at the national level and exclude spending on

package and organised tours.

Table 1.5 below provides a more detailed analysis, adopting the years requested. This more detailed
analysis takes into account average retail expenditure by overnight visitors to Noosa-Noosaville, as
reported by TRA, noting that no per capita ‘real growth’ has been allowed for over the forecast period.
Once again this is a very conservative assumption.

The forecast number of domestic and international visitor nights is as per Chart 5.6 on page 86 of the DA
report, adopting the 2014-2023 forecast average annual growth rate post 2023.

This suggests that retail spending by tourists to Noosa Heads-Noosaville could conservatively increase
by $105 million from 2014-23, and a cumulative $265 between 2014-31, excluding inflation, real per
capita growth, daytrippers and indirect spending through package tours.

Tourism Spend

 

 

NOOSA HEADS/NOOSAVILLE (OVERNIGHT TOURISTS ONLY) TABLE 1.5
Visitor Nights Spend Per Visitor Night_ Total Spend’
No. Growth $ Growth $M Growth — Increase relative
(Million) p.a. p.a. p.a. to 2014 ($M)
2014 20 50 135
2018 3.5 6.6% 50 0.0% 174 6.6% 39
2023 48 6.6% 50 0.0% 240 6.6% 105
0.0% 400 6.6% 265

2031 8.0 6.6%

   

   

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6 TRADE AREA AND EXPENDITURE NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

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2 Vacancy Analysis

2.1 NOOSA CIVIC

Information request:

The Retail Needs Assessment identifies Noosa Civic as having 4,200 sq.m of vacant
floorspace, representing a vacancy rate of 14% (as reported in Table 4.1) but the vacancy
rate reported in Chart 4.1 reports the vacancy rate for Noosa Civic as 9%.

Response:

The 9% vacancy rate is correct, and refers to all vacancies across the entire Noosa Civic property owned
by QIC (i.e. the shopping centre, Emporium, offices and freestanding uses).

At the time of the report there was 2,646 sq.m of vacant floorspace across Noosa Civic. This amounted to
a total of 22 tenancies of various types and sizes, 14 of which were within the Noosa Civic shopping
centre component. In some cases the vacancies are due to the change in ownership and management to
QIC, and are therefore temporary and transitional.

Table 4.1 of the report has been updated and is provided as Table 2.1 below.

It should be noted that 4 of the vacancies in the Noosa Civic shopping centre component, which were
apparent in September 2014, were small kiosks and casual mall leasing (CML), including ATMs. In
addition, a 225 sq.m externally orientated tenancy of at the western end of the centre has been vacant for
some time. In our view this is a very poor location for most retail and related uses due to the lack of

footfall, and is arguably a design flaw.

The Emporium showroom component and the freestanding office building, which are also part of the
Noosa Civic property, account for some 59% of vacant space across the entire Noosa Civic property.

As requested, Table 2.1 also includes a more detailed analysis of the size and number of vacant
tenancies across the various centres assessed within the trade area.

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NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2 VACANCY ANALYSIS 7

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Estimated Current Provision of Floorspace and Vacancy

 

 

NOOSA CIVIC TRADE AREA, AS AT SEPTEMBER 2014 TABLE 2.1
Average Vacancy
Number of Tenants Total Floorspace (sq.m) Size (sq.m)

Total Vacant Total Vacant % Vacant Mean Median
Noosa Civic 128 22 30,641 2,646 9% 120 99
Noosaville 239 17 44,200 3,100 7% 182 100
Inc. Noosa Homemaker Centre 21 2 9,600 1,700 18% 850 835
Inc. Noosa Village Shopping Centre 21 1 4,700 100 2% 100 100
Weyba Road (Noosaville) 10 2 3,100 200 6% 100 105
Noosa Bushlands (Noosaville) 6 1 1,500 300 20% 300 270
Noosaville Industrial 22 0 16,200 0 0% 0 0
Noosaville Undefined 4 0 1,200 0 0% 0 0
Noosa Parade Prof. Centre (Noosaville) 8& 0 300 oO 0% Oo oO
Total Noosaville 414 42 97,141 6,246 6% 149 103
Noosa Junction 248 33 36,700 4,200 11% 127 80
Inc. Noosa Fair Shopping Centre 31 4 7,900 200 3% 50 53
Inc. Noosa Junction Plaza 20 4 5,200 300 6% 75 70
Hastings Street (Noosa Heads) 167 13 16,600 800 5% 62 60
Inc. Bay Village on Hastings 26 0 2,400 0 0% 0 0
Quamby Place (Noosa Heads) 18 4 3,100 200 6% 200 150
Total Noosa Heads 433 47 56,400 5,200 9% 111 75
Tewantin Town Centre 140 16 23,900 1,800 8% 113 80
Inc. Poinciana Place Shopping Centre 12 0 3,100 0 0% 0 0
Inc. Tewantin Plaza 22 3 1,300 100 8% 33 35
Noosa Outlook (Tewantin) 13 0 1,800 0 0% 0 0
Earl Street (Tewantin) 10 1 1,300 100 8% 100 88
Total Tewantin 163 17 27,000 1,900 7% 112 80
Sunshine Beach 31 0 3,300 ) 0% 0 0
Sunrise Shops 8&8 0 1,000 a 0% 0 0
Total Sunshine Beach 39 0 4,300 0 0% 0 0
Coolum Beach 154 10 20,200 900 4% 90 77
Inc. Coolum Village Shopping Village 20 1 5,500 200 4% 200 196
Coolum South & Coolum West 51 ti 11,300 800 7% 114 84
Inc. Coolum Park Shopping Village 14 3 4,000 200 5% 67 70
Inc. Mount Coolum Shopping Centre 13 Zz 1,500 100 1% 100 60
Total Coolum 205 17 31,500 1,700 5% 100 88
Peregian Springs 24 4 6,000 100 2% 100 49
Inc. Peregian Springs Shopping Centre 18 0 4,800 0 0% 0 0
Peregian Beach 74 6 9.200 800 9% 133 88
Total Peregian 98 7 15,200 900 6% 129 80
Cooroy 127 9 19,100 800 4% 89 63
Inc. Cooroy Village Shopping Centre 14 3 1,100 400 36% 133 70
Pomona 54 4 8,500 700 8% 175 85
Eumundi 52 7 6,300 700 11% 100 40
Kin Kin 0 1,400 0 0% 0 0
Cooran 9 0 1,300 0 0% 0 0
Total - Noosa Civic Trade Area 1,598 150 268,141 18,146 7% 121 80

   

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8 VACANCY ANALYSIS. NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

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2:2 VACANCY RATES

Information request:

‘The Retail Needs Assessment suggests reasonable overall vacancy rates for the centres
network within the identified trade areas but does not adequately assess the proposed
introduction of a large quantum of new floorspace’.

Response:

The introduction of new floorspace, as proposed with the Noosa Civic Expansion, is justifiable on the
basis of market growth, under-provision of floorspace in the local area, escape spending, market gaps
and low impacts. It is quite clear that local needs are not being met.

Moreover, the Noosa Civic expansion will account for only 18% of future retail floorspace deficiency over
the 2014-21 period (see page 103 of DA report). In this environment any existing vacant space that is
suited to the needs of retailers and service providers could be expected to be absorbed.

In our view the DA report appropriately considers the need, demand and impact issues relating to the
proposed development, and, in particular, thoroughly assesses the impact of the proposed development
on the network of centres throughout Noosa, and indeed the central and northern parts of the Sunshine
Coast.

2.3 CENTRES ANALYSIS

Information request:

‘The Retail Needs Assessment does not consider the extent to which the expansion of the
Noosa Civic might impact on other MRACs and the Maroochydore PRAC. Vacancies can
provide an indication of centre performance and need for any additional floorspace’.

Response:

The need for additional retail floorspace in the Maroochydore PRAC and Nambour MRAC will be
determined based on the needs of their catchment populations, both of which can be expected to be
distributed over a large geographic area.

Similarly, any well located vacant space in these centres would be expected to be filled based on the
market fundamentals and characteristics of each trade area and centre, and would not be influenced to
any significant degree by actions in Noosa which is some 25-30 km to the north.

In our view, as noted above, vacancies provide, not only an indication of overall centre performance, but
also an indication of where centres may have weaknesses in their layout, composition, carparking,
adjacencies, connectivity and the like. As a general rule, ultimately most vacancies tend to be in poor
locations as existing businesses trade up into superior space.

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NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2 VACANCY ANALYSIS: 9

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3 Intercept Surveys

3.1 NOOSAVILLE METHODOLOGY

Information request:

‘The location for the Noosaville surveys along Gympie Terrace would be more likely to over
sample visitors.... A more appropriate approach might have been to conduct intercept
surveys at both Gympie Terrace and in the immediate vicinity of Noosa Village Shopping
Centre’.

Response:

As indicated on page 44 of the DA report the Noosaville survey was restricted to the river precinct due to
private ownership issues. The survey results in Noosaville, therefore, only relate to the Noosaville River

Precinct.

This obvious bias has been acknowledged and accounted for in the DA report when examining the
distribution of trade and Noosaville’s overall market shares.

The adjustments made in our DA report for the fact that the Noosaville River Precinct would, in all
likelihood, include a higher proportion of visitors than the centre as a whole, was based on an iterative
approach, including use of transactions reported by Quantium, retail turnover estimates, and distributions
for other centres, particularly in relation to visitors. The adjustments made were also required to ensure
that the turnover allocation model balanced and was internally consistent.

3:2 MAROOCHYDORE PRAC

Information request:

‘The intercept surveys do not provide any new survey of Noosa Civic shoppers or intercept
surveys from Maroochydore PRAC. Updated intercept surveys of Noosa Civic would allow
direct comparison with the surveys of the four other centre localities. It is possible the 2012
customer surveys of Noosa Civic might provide similar insights but the presentation of
these results does not allow meaningful comparison’.

Response:

As indicated on page 25 of the DA report an exit survey of Noosa Civic shoppers was undertaken in
October, 2012. Focus groups were also undertaken at the time, all of which were part of a research
project for QIC to help understand the needs of customers and to provide input into the future direction for

the asset.

Since October 2012 neither Noosa Civic nor the competitive environment has changed to any significant
extent, and hence the 2012 surveys remain relevant and useful.

Please note that the Quantium analysis, which relates to 2014, includes all EFTFOS, credit, debit and
other card transactions at Noosa Civic over the entire year. It has therefore been used to supplement the
exit survey data.

In our view the two sources provide a reliable source of information relating to origin of trade, usage and
expenditure patterns. Direct comparison between Noosa Civic and the other locations where intercept
surveys were undertaken is available via the Quantium market share analysis which is summarised in
Appendix F of the DA report.

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10 wnercerr surveys NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

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This shows, for example, that for Food Retail, which includes supermarkets and fresh food shops,
retailers in postcode 4566, which includes Noosaville, capture 30.8% of expenditure by primary trade
area residents, whilst retailers in postcode 4565 (Tewantin) capture 18.1% and those in postcode 4567
(Noosa Heads and Sunshine Beach) achieve 9.6%. The 8 listed postcodes in Table F1 in Appendix F of
the DA report account for a 64% Food Retail market share from the primary trade area, which means that
36% of Food Retail expenditure is directed to a disparate number of other locations.

URBIS

NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2 INTERCEPT SURVEYS 1 1

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4 Transaction Data

4.1 QUANTIUM METHODOLOGY

Information request:

The Retail Needs Assessment utilises EFTPOS transaction data sourced from Quantium.
Such data should be treated with a degree of caution, given cash remains a significant
method of payment across a number of retail categories.

There are concerns with the direct applicability of the Quantium EFTPOS data to
convenience or supermarket based shopping trips and whether the impacts on the
Noosaville centre, which hosts a Woolworths and Aldi, have been fully identified.

Response:

Please note that the Quantium data is based on an enormous sample of transactions, but does not
include cash purchases. The DA report nevertheless allows for cash purchases and indeed all retail
purchases, including customers of other banks. The Urbis analysis relates to the total retail market,
including cash, aligning the derived market shares to the productivity levels achieved at the centres.

We therefore confirm that the DA report is based on all transactions. Adjustments have therefore been
made for cash purchases.

The adjustments and broader methodology used by Quantium and Urbis are provided below. A specific
calculation of impacts on supermarkets within the trade area is also provided, as requested.

4.1.1 QUANTIUM METHODOLOGY

= Terminals for each tenant in each location or ‘centre’ are identified in Quantium’s Market Blueprint
data by analysing electronic transaction descriptions. Market Blueprint has identified and classified 8
million terminals to individual brands and store locations.

= Customers transacting at least once with a terminal mapped to the centre over the twelve month
period under analysis are identified and classified as centre customers; residents of the Noosa Civic
trade area are also tagged.

® Each individual customer transaction made, either inside or outside the centres identified, is classified
as either in store or online.

= Each centre tenant is mapped into a category for reporting purposes. Categories are not product
based but rather based on grouping of retail brands or store types (e.g. department stores).

= The following metrics are then provided for each trade area sector:

— Share of electronic spend: Of all electronic spending by a customer in a retail category, how
much is spent at Noosa Civic, as well as at retailers in each Australian post code, online and
overseas?

- Distribution of trade: Of all electronic spending identified at Noosa Civic, where does the
resident live? The resident location is grouped by trade area sector as well as from beyond the
trade area at a broad geographical region (e.g. rest of QLD). This output mirrors that provided in
a traditional exit survey.

Furthermore, Quantium also process the Woolworths Everyday Rewards customer spending data (which
includes cash). This additional data source is used by Quantium to ensure any non-cash bias in the
output data is minimised. In relation to the DA report Woolworths Everyday Rewards data was called
upon to verify origin of trade data for Noosa Civic, which includes a Woolworths store.

URBIS.
12 transaction para NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

Page 17

4.1.2 URBIS METHODOLOGY

Urbis acknowledges that directly applying the Quantium distribution of trade metric to derive the market
share at Noosa Civic has the potential to be biased. Residents that are closer to the property are more
likely to do smaller more frequent cash transactions whereas residents further away may do larger less
frequent electronic transactions, biasing the distribution of spending away from the primary sector.

To account for this, the following market share methodology is applied with different approaches for
Noosa Civic and the other centres in the network due to the availability of superior data for Noosa Civic.

Noosa Civic
To assess the market shares and ensure no cash bias four approaches were assessed:

Ie Distribution of Spend approach. As detailed in the report, this approach uses Quantium data
and distributes turnover across the trade area sectors and beyond at the tenant level. The
distributed turnover is then divided by the market, as defined by Urbis, to attain market shares.

2. Market Share Approach. This approach accepts the Quantium market shares at the product
group level, which implicitly assumes that the share of ‘plastics’ is reflective of the share of total
wallet (e.g. if the average primary trade area residents spends x% of their electronic spend at
Noosa Civic, then they are assumed to spend the same x% of their total spend at the property
(i.e. including cash). This eliminates the potential bias in the distribution approach.

3. Balance against previous surveys: This approach follows the first but uses the 2012 exit
survey in place of the Quantium data. Noting the bias in exit surveys towards more frequent
everyday use customers.

4. Balance against total market: Combined with the analysis of competing centres as well as
inflows (tourist) and outflows (escape spending to Brisbane etc.), the total trade area market was
balanced (i.e. where does each dollar spent by each trade area resident end up). This was
undertaken to assess for any bias in the Quantium data that would be influencing market shares
and hence the impact analysis.

Approaches 1 and 2 resulted in a generally consistent market share for Noosa Civic, suggesting
that any cash bias is minimal. Furthermore, upon balancing the inflows and outflows of the
market (approach 4), the market share achieved by the centres and indeed the supermarkets
were found to be appropriate.

Finally, the 2012 exit survey was shown to have a lower share of turnover from beyond the trade
area. This is typical of a comparison between an exit survey and the Quantium turnover
distribution, due to the local bias of an exit survey. However, given the alignment of the other
three approaches, which include an assessment of the size of the tourist market (i.e. beyond
spending), the Quantium distribution approach is considered to be robust.

Other Centres

The key mechanism to derive the impact of the Noosa Civic expansion on other centres in the network is
the market share achieved by other centres. To derive this, Urbis initially used the Quantium market
shares by post code, as provided in Table F.1 of the DA report (i.e. the market share retailers in each
post code achieved from residents of each trade area sector, by product group) and then made
adjustments based on productivity, performance, and internal model consistency.

To assess the market shares and move the Quantium market shares from the postcode level to specific
centres, the following methodology was undertaken:

1. At a postcode level, derive the total turnover achieved by all retailers in that postcode, at a
product category level. This was done by multiplying out the Quantium Share of Electronic
Spend, by category, by the total market as defined in the report.

URBIS.
NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2 TRANSACTION DATA 1 3

Page 18

ids Based on the floorspace survey outlined in the DA report, as well as other sources, derive the
amount of floorspace in each activity centre, by post code and at the category level.

3. Combine steps 1 & 2 to derive the average trading levels at each activity centre/location.
Recalibrate iteratively to ensure they are in line with appropriate levels, having regard to
benchmarks and performance drivers, and are reflective of the composition and quality of
retailers in each precinct.

This methodology is obviously very detailed. Our overarching consideration has been to ensure that the
distribution of turnover estimated for each centre, and hence market shares, results in a ‘systems
approach’ to modelling the network of centres which is internally consistent.

Specific Supermarket Impacts

The Information Request calls for an analysis of the likely competitive impacts of the Noosa Civic
expansion on supermarkets located in Noosaville and Noosa Junction. Ordinarily, the direct competitive
effects of a proposal on an individual retailer, such as a supermarket would not be considered a matter
relevant to a planning application. This is, in effect, commercial competition.

Despite this, we have undertaken the analysis and provide the following outcomes:

« Given the localised catchments of supermarkets, the impacts on supermarkets at Noosaville and
Tewantin are likely to be 2-3% points greater than the levels shown in Table 8.5 of the DA report.

® The supermarkets in these locations are understood to trade strongly, and this level of impact is not
considered likely to affect the viability of these stores, or the availability of goods and services to the
communities they serve.

= The higher level of impacts on the supermarkets in these locations, in percentage terms, also means
that the impact on the remaining retailers in these centres would be lower than indicated in the DA
report.

; URBIS
1 4 TRANSACTION DATA NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

Page 19

5 Needs Analysis

5.1 TARGET CLOSURE

Information request:

‘5,400 sq.m of additional DDS floor space is proposed and has been indicated to be a
Target store. This will likely see the closure of the Target Country (1,360 sq.m) at Noosa
Junction and represent an adverse impact in the order of $4.5M-$5M on Noosa Junction.
The capacity for a centre to relet or reconfigure a large tenancy may be limited’.

Response:

The Target store at Noosa Junction is understood to have opened in June 2010 in order to get a foothold
in the Noosa area. The store is very densely stocked and performs well, despite its limitations. The store
is clearly under-sized for the market and Target has identified the need for a full line store in the area.

In the event that Target chose to not renew its lease the tenancy would obviously become available for
another retailer(s), or perhaps another use.

We note that the Target store is part of Noosa Junction Plaza, and has direct access to/from Lanyana
Way, a short distance from the Noosa Fair Shopping Centre, in the heart of the Junction.

Noosa Junction Plaza also has frontage to Sunshine Beach Road which is the main street in the Junction,
as well as Noosa Drive which is the primary access route to Noosa Heads. The general location therefore
has good attributes.

The nature of the centre and its location, together with the configuration of space, should not present any
re-leasing issues, if indeed Target chose to not renew their lease.

In relation to the question of whether a Net Community Benefit (NCB) would ensue if Target relocated
from Noosa Junction to the proposed development, we note that consumers would be provided with a
modern, full line Target store offering a far greater range than is currently available in Noosa. The
nearest full line Target DDS is in Maroochydore. Consequently, although there may be some customers
who are negatively affected, overall, the broader community would be better off due to the greater range
that would be available in the Noosa area.

URBIS
NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2 NEEDS ANALYSIS 1 5

Page 20

5.2 BENCHMARKS

Information request:

‘_.. retailer types are benchmarked to different regions. DDSs are benchmarked to Brisbane
levels, while supermarkets are benchmarked to non-metropolitan Queensland levels’.

Response:

Tables 7.1 and Table 7.2 in the DA report, have been updated to allow for a consistent Queensland
floorspace provision benchmark to be used. These new benchmarks, relating to DDS and supermarket
floorspace provision, are provided in Tables 5.1 and 5.2 below. The change in provision and
subsequently derived floorspace deficiency is relatively minor.

For DDSs the Queensland provision equates to 175 sq.m per 1,000 residents, slightly below the Brisbane
average of 186 sq.m. This results in a reduction in the notional floorspace deficiency from 9,880 sq.m to
8,830 sq.m in 2031. In our view, for an urbanised region such as the Sunshine Coast it is more
appropriate to use the Brisbane benchmark, and hence we stand by the analysis in the DA report.

The Queensland supermarket provision is 373 sq.m per 1,000 residents relative to the previously used

Queensland non-metropolitan provision of 370 sq.m. This higher provision results in an inconsequential
increase in the notional floorspace deficiency from 10,590 sq.m to 10,870 sq.m in 2031.

DDS Provision — Population Assessment 2014-2031

NOOSA.CIMIC/MAINCIRADE ARE soe: uate gece ears enema eee cones ABE ELO UL
Unit 2014 2016 2021 2026 2031

Main Trade Area Population ' No. 81,000 83,700 89,900 92,500 95,500

Existing DDSs

Big W - Noosa Civic sq.m 6,480 6,480 6,480 6,480 6,480

Target - Noosa Junction sq.m 1,400 1,400 1,400 1,400 1,400

Total sq.m 7,880 7,880 7,880 7,880 7,880

Main Trade Area DDS Floorspace Provision pe 97.3 94.1 87.7 85.2 82.5

Queensland DDS Floorspace Provision sq.m/ 1,000

(Brisbane = 186, Non-metro QLD = 165) pop die Ue 178 Wes 102

Supportable MTA F'space

@ Brisbane Provision of 175 sq.m/1,000 pop ay 14,480 TGs0 15,780 ie tg 16,710

Surplus/(Deficiency) sq.m (6,300) (6,770) (7,850) (8,310) (8,830)

URBIS

1 6 NEEDS ANALYSIS NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

Page 21

Supermarket Provision — Population Assessment 2014-2031

 

 

A CIVIC MAIN TRADE AREA . _ TABLE 5.2

Unit 2014 2016 2021 2026 2031

Main Trade Area Population ' No. 81,000 83,700 89,900 92,500 95,500

Main Trade Area Existing Supermarket Floorspace sq.m 24,750 24,750 24,750 24,750 24,750

Main Trade Area Supermarket Floorspace Provision ee 306 296 275 268 259

Queensland Supermarket Floorspace Provision sq.m/ 1,000

(Brisbane = 360, Non-Metro = 370) people Si3 ai3 sis sts 213

Supportable MTA Floorspace @ Non-Metro QLD

benchmark of 373 sq.m per 1,000 residents Sa. 30,210 31,220 33,530 34,900 $5,620

Surplus/(Deficiency) sq.m 0 (6,470) (8,780) (9,750) (10,870)

5.3 FLOORSPACE DEFICIT

Information request:

‘The Retail Needs Assessment estimates a 2014 retail floorspace deficit within the identified trade
areas. The analysis indicates the deficit will increase to 2021 but does not appear to consider the
potential for existing approvals to address some of the projected deficit’.

Response:

The DA report outlines two approaches for considering Future Demand for Retail Floorspace. These are
referred to as Method 1 and Method 2 on page 102 of the DA report and concludes as follows:

Method 1

The proposed expansion of Noosa Civic is expected to add a further 21,980 sq.m of retail
floorspace to the trade area. Based on the assessment above, in 2021 the proposed expansion
of Noosa Civic will only account for around 20% of the deficiency in retail floorspace within the

trade area. (p102)
Method 2

Given that the proposed expansion of Noosa Civic, would add 21,980 sq.m of retail floorspace to
the trade area, it is apparent that this will only satisfy approximately 18% of the retail floorspace
deficiency in 2021. There would still be a significant level of unsatisfied demand within the trade
area, and a continuation of the high level of escape spending. (p1 03)

Given this conclusion it is readily apparent that existing approvals, which are considered in the DA report
(see p62), are highly unlikely to be compromised.

In particular, the Peregian Village Market development and Noosa Fair supermarket expansion, which are
both within the trade area, would account for only 1.6% of the retail floorspace deficiency in 2021; the
Masters proposal is not affected as it is a hardware and home improvement store operating in a different
market space; and, Sunshine Plaza is the region's largest regional centre which is supported by a
substantial trade area population and tourist market that is substantially bigger, and draws more broadly,
than the Noosa trade area.

URBIS
NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2 NEEDS ANALYSIS 17

Page 22

6 Impact Analysis

6.1 PROPOSED DEVELOPMENTS

Information request:

‘The Retail Needs Assessment cites a number of approved and proposed developments that
might influence activity within the identified trade areas, including the expansion of Sunshine
Plaza, expansion of Noosa Fair and the approved Masters Home Improvement Centre.

The impact analysis does not include these proposed developments. Impacts must be assessed
for existing, approved and designated centres and include the extent to which a proposed
development might impede the uptake of existing approvals’.

Response:

Please refer to sub-section 5.3 above.

Moreover, please note the following paragraph from the DA report:

‘The impact analysis in this report does not include these approved developments. In the
analysis which follows we are seeking to isolate the impacts resulting from the proposed Noosa
Civic development, rather than calculating cumulative impacts. In any event, given the nature,
location and scale of the approved developments, it is unlikely that the impacts resulting from the
Noosa Civic expansion will be significantly different from the calculated impacts outlined later in
section 8’. (p62) [underlining added]

In addition we offer the following considerations:
= Peregian Village Market — As indicated in the DA report:

‘This new development will serve some of the top up needs of the local Peregian Beach catchment,
as well as local tourists, in an area which currently has a very low provision of food retailing
floorspace. Consequently, due to its limited scale and local orientation,it will not affect the analysis of
need for proposed Noosa Civic expansion, and Noosa Civic would not affect the scope for the

Peregian development’. (p62) [underlining added]
= Noosa Fair supermarket expansion — As indicated in the DA report:

‘This extension will do little to correct the anticipated future shortage of supermarket floorspace in the
trade area ... but it will provide a slightly improved range for Noosa Junction shoppers’. (p62)

2 Masters Home Improvement — As indicated in the DA report:

‘The Masters complex will compete with the Noosaville Bunnings store and other bulky goods
retailers in the Noosa Industrial Estate and throughout Noosa. It will be of only limited relevance to
the proposed Noosa Civic expansion’. (p62)

= Sunshine Plaza —Due to delays is commencing the Sunshine Plaza expansion, the DA report does
not assess the impact of the Noosa Civic proposal on an expanded Sunshine Plaza. The Sunshine
Plaza development is now expected to be completed after the Noosa Civic proposal has commenced.
Suffice to say that if the Sunshine Plaza expansion could be completed by 2018, the percentage
impact of the proposed Noosa Civic development on the Maroochydore PRAC would be lower that
indicated in Table 8.5 (p117).

In conclusion, it is highly unlikely that the subject development proposal would impede the uptake of
existing approvals.

URBIS
1 8 IMPACT ANALYSIS NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

Page 23

6:2 PRODUCTIVITY

Information request:

‘The retail analysis suggests that turnover productivity among food retailers is expected to
decline sharply, while turnover productivity for non-food retailers is expected to increase
due to the Noosa Civic expansion.

Turnover productivity in non-food retail is not considered likely to increase as a result of the
development’.

Response:

Table 4.6 on page 59 shows current retail trading levels for Noosa Civic in 2014, and Table 7.6 on page
105 shows the data required to calculate the post development average trading levels for the expanded
Noosa Civic centre.

Overall, the subject centre is forecast to experience a slight decrease in the average trading level
following the proposed development, from $6,926 per sq.m in 2014 to $6,865 per sq.m in 2018. This
comprises the following changes, assuming that the mini-major tenants are all non-food stores, and that
the mini-major store mix is such that the average trading level shown in Table 7.6 of the DA report is
achieved:

CATEGORY 2014 2018 CHANGE
Food $11,751 $9,084 -22.7%
Non-Food $5,392 $5,956 +10.5%
Total $6,926 $6,865 -0.9%

In our view it is quite reasonable to expect that the average trading level of non-food stores will increase
following the development, and conversely that the average trading level of food stores will decline. This
is simply due to a combination of competitive influences, particularly amongst the higher trading
supermarkets, the improved range and variety of non-food stores, the lower weighting attributable to the
lower trading DDSs, and the possibility of higher trading mini-majors.

6.3 CENTRES NETWORK

Information request:

‘Table 8.5 of the Retail Needs Assessment estimates an overall impact of $129M across
identified centres but estimates the increase in turnover for Noosa Civic from the expansion
as $149.6M, leaving approximately $30M of unallocated impacts’.

Response:

The assessed $129 million overall impact, is equivalent to the uplift in turnover forecast for the Noosa
Civic development in the development year of 2018. As outlined on page 106 of the DA report, this is
based on an assume ‘do nothing’ case (i.e. Case 1) with turnover forecast at $167 million , as compared
with a post development scenario (i.e. Case 2) with total centre turnover forecast at $296 million (in

constant $2014).

URBIS .
NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2 IMPACT ANALYSIS 1 9

Page 24

The derived uplift of $149.6 million noted in the Information Request is the uplift relative to current
turnover in 2014 (i.e. $147 million). The difference of $30 million is due to the growth forecast over the
period 2014-2018, population growth (1.7% p.a.) and real spending growth (1.6% p.a). In other words,
the centre would be expected to experience natural growth over the pre-development period and this is
captured in the ‘do nothing’ forecast.

3 URBIS
20 neact anatysis NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

Page 25

i Consumer Travel

7.4 NON-STANDARD PARAMETER VALUES

Information request:

‘The Retail Needs Assessment assigns monetary values to travel time and environmental
benefits associated with reduced trip length and/or generation associated with an expanded

Noosa Civic.

There are concerns relating to the application of non-standard parameter values to the
travel time and travel distance savings. For example, the individual travel time of $28.95 per
hour is based on the average hourly earnings of employed persons in Queensland.

Standardised parameter values for the value of an individual's travel time as commonly
used in transport evaluations are estimated by Austroads at approximately
$15/hour...reflecting the need to balance the value of leisure related time against the value
of work related time, and the fact that not all time savings can be utilised.

The assessment calculates a benefit associated with fuel savings using a retail fuel price as
the parameter value as opposed to the adjusted resource cost of fuel. Austroads offers a
range of vehicle operating cost parameter values for use in transport economic
assessments that can be adjusted for inflation’.

Response:
The statement above that:

Standardised parameter values for the value of an individual's travel time as commonly
used in transport evaluations are estimated by Austroads at approximately
$15/hour...reflecting the need to balance the value of leisure related time against the value
of work related time, and the fact that not all time savings can be utilised.

does not accord with accepted theory and other studies relating to the value placed on leisure time, and
in our view is not the approach that should be adopted. It is certainly true though that individuals may
actually place a higher value on their leisure time, so the Austroads approach is actually very
conservative and there are plenty of alternative examples to support the approach and values used in the

DA report.

In the event that Council would prefer a sensitivity analysis we would suggest that at $15 the benefits
shown in the DA report could be halved for the downside; but similarly it would be appropriate to
recognise that a higher value is actually more likely, and an upside outcome could be 50% higher than

that indicated in the DA report.

URBIS
NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2 CONSUMER TRAVEL 2 1

Page 26

8 Employment Effects

8.1 NATIONAL ACCOUNTS INPUT-OUTPUT DATA

Information request:

«There has been significant change in industry structures over the past 1 5-20 years....AS
such the estimates based on 1996-97 input-output data are not applicable. More recent
input-output multipliers can be calculated from input-output tables supporting the National
Accounts’.

Response:
Itis acknowledged that more up to date input-output tables are available from the ABS and that there
have been structural changes in the retail market over the period since 1996/97. However, the ABS no

longer publishes |-O multipliers and these would need to be derived/estimated based on the input-output
tables. This is fraught with difficulty and would undoubtedly still be open to challenge.

In our view:

« the likely changes to the multipliers since 1996/97, due to structural changes, would still be within the
margin of error on the estimates published; and

* the published multipliers are at the national level, and consequently their precise influence at the
local level is difficult to ascertain.

For these reasons it should be recognised that the multiplier analysis relating to employment effects in the
DA report is a guide. It is nevertheless true that the proposed expansion:

» will result in the creation of ongoing jobs in the centre;

= these new jobs will create further ‘spin off employment throughout the broader regional and state
economies due to multiplier effects;

= construction of the development will result in construction jobs; and

=» these new jobs will create further ‘spin off employment throughout the broader regional and state
economies due to multiplier effects for a period of time.

In our view the multiplier effects shown in Table 8.8 on page 123 of the DA report are reasonable
estimates and a useful guide, even though structural changes may have resulted in minor changes since
the |-O multipliers were last published by the ABS

URBIS

Ze EMPLOYMENT EFFECTS NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

Page 27

9 Catalyst for Future Diversified Development

Information request:

‘The application suggests the Noosa Civic expansion would act as a catalyst for future
diversified development of the NBC but does not elaborate on how the proposal provides
real drivers for such development ...’

Demonstrate how the expanded retail centre would ‘serve as a catalyst for future
development of the SBC’, as stated in the Town Planning report.

Response:

9.1 RETAIL AS A DRIVER OF ACTIVITY

Successful Town Centres, and indeed broadly based ‘activity centres’ in general, are characterised by a
wide range of drivers and factors which contribute to the overall vibrancy and viability of the centre. A
diverse range of uses, design and layout, accessibility and transport, and physical integration of the
various uses and spaces are all important to making an activity centre work effectively.

A masterplanned approach is most effective, especially if it is possible to layout the Town Centre on a
greenfield or brownfield site. Examples of Town Centres implemented around a masterplan include
Joondalup and Ellenbrook in Perth, Robina (Gold Coast), Springfield (Brisbane), Rouse Hill (Sydney) and
Craigieburn and Point Cook (Melbourne).

While the broad mix of uses in these Town Centres all contribute to the activity in the centre, retail is the
most important generator of activity. By extension it is generally acknowledged that retail is the main
catalyst for further investment and development as a Town Centre goes through its development and
growth phases. In the absence of definitive evidence of cause and effect, Robina is an excellent case
study in this regard.

The Robina Town Centre was a key part of a large masterplanned development that began in 1981 when
the first house block was sold. The commencement of residential development was followed by
construction of the lake in 1982, the opening of Bond University in 1985, the golf course in 1990 and the
high school in 1995. The Robina Town Centre opened in 1997, and at this stage it was predominately a
shopping centre. Over the following 15 years or so, as shown in Figure 9.1 on the following page, the
Town Centre has changed dramatically, so much so that the retail component of the centre in 2015 is a
much lower proportion of Town Centre GLA.

As shown in Figure 9.2, the Robina Town Centre and environs has developed into a broadly based
activity centre and employment hub since the original seeds were sewn in the late 1990s. There is now
around 75,000 sq.m of office space, in addition to the shopping centre, showrooms/bulky goods outlets,
medical and entertainment facilities.

URBIS. —
NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2 GATALYST FOR FUTURE DIVERSIFIED DEVELOPMENT 2 3

Page 28

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Page 29

Robina Town Centre Evolution

FIGURE 9.2

 

 

1995-2015
1995-2000 Auto Mall KE High School
Robina Shopping Centre =| Train Station
rf Hospital
2001-2005 w ~20,000 sq.m Office Space
iit. | Self-Storage
s& Bond University Institute of Health & Sport
2006-2010 Robina Shopping Centre REI ~40,000 sq.m Office Space
Expansion (including Myer)
Mixed Use Developments (including residential)
2011-2015 Robina Shopping Centre ~13,000 sq.m Office Space

Urbis Pty Ltd

Market Hall Expansion

2
+
fi

Health Precinct

Bond University

In our view, based on both Australian and overseas experience, the following concepts and principles are

instructive:

= Every major city’s CBD is built around a core retail area, and this is also common for all broadly
based suburban activity centres. The importance of retail uses within a Town Centre and role they
have in providing a hub from which other uses benefit is reflective of the high level of activity
generated by retail businesses.

2 As shown in Figure 9.3, retail generates by far the most footfall in broadly based activity centres. In
general, retail businesses attract 10 times more visits than commercial office space and 20 times
more activity than residential uses, per unit of floorspace. The cross-usage and synergy benefits are
therefore readily apparent. Retail uses are clearly the most important element in ensuring vitality and
in many respects viability as well, in a Town Centre.

URBIS

NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

CATALYST FOR FUTURE DIVERSIFIED DEVELOPMENT 25

Page 30

Footfall

ANNUAL VISITS RELATIVE TO FLOORSPACE FIGURE 9.3 _
170 visits
PER SOM

= 100 visits

5 PER SOM

= D 50 VISITS

= PER SOM

15 VISITS
a AS

ak 5

\y \S \ \ \
@& we Ws Ww ws

KS
© ww NS we

= It is notable that all of the modern masterplanned Town Centres around Australia, several of which
are listed above, have commenced development with a major retail component. There is no example
in Australia of a successful broadly based Town Centre that has been based on a foundation other
than a major retail centre.

Urbis’ multi-disciplinary experience with the success drivers for Town Centres and mixed use
developments in Australia and overseas suggests that a diverse mix of uses and functions is necessary in
order to achieve the necessary degree of self-sufficiency, whereby the centre’s ability to attract a critical
mass of people and activities enhances a centre's viability.

9.2 SYNERGY OF USES

It is important to identify uses that are not only viable in their own right, but which also maximise cross
usage between various components of a Town Centre. Some uses are destinational and some benefit
from linked trips more than others. While there are specific location and market factors that determine the
success of each type of use, it is useful to understand the synergies that exist between different uses.

Based on Urbis’ multi-disciplinary experience, as noted above, Figure 9.4 summarises the overall
economic and amenity synergies that exist between uses. The primary use is listed in the first row, with
an assessment of how each use drives that primary use in each of the rows down the table.

This assessment reveals that retail as the primary use generates strongest benefits to food and
beverage, cultural/civic, medical and childcare as well as office use. In reverse, retail is a major
beneficiary of residential and office development (i.e. uses which generate daytime and permanent
populations and their demand for retail goods and services).

: URBIS
26 CATALYST FOR FUTURE DIVERSIFIED DEVELOPMENT NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

Page 31

Synergy of Uses

 

ECONOMIC & AMENITY SYNERGY BETWEEN USES FIGURE 9.4
MEDICAL
CULT'/ stu’ / CHILD
PRIMARY USE OFFICE RES’ HOTEL ENT’ F&B = RETAIL «ss CIVIC. ~— EDUC’, —» ACCOM'—s CARE GYM
OFFICE n/a £ woes cet ven a zs = bi :
RESIDENTIAL S n/a ‘ a ee “= a + - = fa

n/a x Me * im * * * *

+ +e + * a ee *
n/a =

ENT’

_ ae

i

F&B

z
-
| ee

ReTAL | = _ a a He ‘ a = a a

i

CULTURAL / * Ȥ apes nia * * os x
civic | {
EDUCATION = oy i i n * % n/a = x =
STUDENT * * * we ” + * ia * *
ACCOMM
MEDICAL, | ### ee * * . ” : a Ala a
CHILDCARE | Sal |
uo a . 2 ee a ESE,
Weak synergy ** Moderate synergy

| ** Strong synergy ze Very strong synergy
Source: Urbis/ULI

= Ultimately the synergy between uses is driven by the consumer experience at mixed use centres.
Urbis consumer research suggests that as well as the direct relationship between co-located uses, at
a local level, the range of uses influences the consumer choice on which centre they visit. Even
smalier non-retail uses can act as a trigger to visit a centre. In this way, mixed use development is
about building a destination that enables consumers to save time, multi-task and provide a vibrant
centre of activity.

» Businesses and workers gravitate to locations which offer the best amenities and public transport
infrastructure. A quality and sufficiently extensive retail offer and environment is essential to
providing the platform to attract employment uses and in particular the higher density office uses.
Workers want good retail amenities near where they work. This is demonstrated by findings from
Urbis’ Office Worker Survey, which indicates that (while at work) workers typically spend around
$11,000 per year on retail goods and services, including food & beverages. The level of retail
expenditure is higher where workers have better access to retail uses.

URBIS.
NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2 CATALYST FOR FUTURE DivERsiFiED Devetopuent 2

Page 32

While retail is often the primary driver of activity, which then supports future diversified development,
there are secondary rounds of benefits as office and residential development generates further demand
for other support facilities and the virtuous cycle is effectively created. In a private sector led strategy, it is
a critical mass of retail that is the primer for this process.

URBIS
28 CATALYST FOR FUTURE DIVERSIFIED DEVELOPMENT NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

Page 33

10 Conclusions

10.1. EFFICACY OF ORIGINAL RETAIL NEEDS ASSESSMENT

In conclusion, the Request for Further Information, together with our further analysis of the issues raised,
has not resulted in any need to change our original ‘Noosa Civic - Retail Needs Assessment’ report which

was lodged with the application.

We trust that this Response report has adequately addressed the matters raised, and confirm the efficacy
of our original report.

CONCLUSIONS 2 9

URBIS.
NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

Page 34

Disclaimer

This report is dated 150412 and incorporates information and events up to that date only and excludes any information arising, or
event occurring, after that date which may affect the validity of Urbis Pty Ltd’s (Urbis) opinion in this report. Urbis prepared this
report on the instructions, and for the benefit only, of QIC (Instructing Party) for the purpose of Development Application (Purpose)
and not for any other purpose or use. To the extent permitted by applicable law, Urbis expressly disclaims all liability, whether direct
or indirect, to the Instructing Party which relies or purports to rely on this report for any purpose other than the Purpose, and to any
other person which relies or purports to rely on this report for any purpose whatsoever (including the Purpose).

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

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

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

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

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

URBIS.

30 DISCLAIMER NOOSA RESPONSE REPORT - RETAIL ECONOMICS JUNE 2015 V2

Page 35

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