Port Macquarie Hastings Retail Strategy · PDF filePort Macquarie Hastings Retail Strategy Review Ref: C15223 HillPDA Page 6 | 53 retail mix is unknown. This could potentially add

Prepared for Port Macquarie Hastings Council

Updated October 2015

Port Macquarie Hastings Retail Strategy Review


Ref: C15223 HillPDA Page 2 | 53

QUALITY ASSURANCE

Report Contacts

ANETA MICEVSKA

Bachelors of Psyc (Hons) and Commerce (Economics), AHPRA

Consultant

[email protected]

Supervisor

ADRIAN HACK

M. Land Econ. B.Town Planning (Hons). MPIA

Principal Urban and Retail Economics

[email protected].

Quality Control

This document is for discussion purposes only unless signed and dated

by a Principal of HillPDA.

Reviewed by:

Dated

6/10/2015

Report Details

Job Ref No: C15223

Version: FINAL

File Name: C15223 Port Macquarie Hastings Centres Strategy Review

110915

Date Printed: 6/10/2015



CONTENTS

Executive Summary .................................................................................. 5 1

Introduction.............................................................................................. 8 2

Study Objectives ....................................................................................... 8

Methodology ............................................................................................ 8

Historical Overview ................................................................................ 10 3

Council Studies and Policies ................................................................... 10

NSW Policies ........................................................................................... 11

Section 79C of the EPA Act ..................................................................... 16

Retail Trends ........................................................................................... 17 4

Lifestyle Trends ...................................................................................... 17

1. Centralisation and Diversification in large centres ............................. 18

2. Larger supermarkets in smaller centres ............................................. 19

3. Increasing demand for residential uses in centres ............................. 20

4. The emergence of dark stores ............................................................ 21

5. Continued evolution of online retail .................................................. 21

6. Continued expansion of new and existing international retailers ..... 23

7. Ongoing renewal and reconfiguration of stores and centres ............. 23

8. The Trend in Out-of-Centre Retailing ................................................. 24

Retail Centres ......................................................................................... 28 5

Supply of Retail Floor Space ................................................................... 28

Port Macquarie Greater CBD .................................................................. 30

Local Centres .......................................................................................... 31

Development Proposals ......................................................................... 32

Demand for Retail Space ........................................................................ 34 6

Resident Projections ............................................................................... 34

Resident Spending .................................................................................. 35

Tourism and Regional Spending ............................................................. 37

Demand for Retail Floor Space ............................................................... 38

Forecast Supply and Demand ................................................................. 39

Out-of-Centre Retailing .......................................................................... 41

Long-Term Growth ................................................................................. 43

Retail Strategy ........................................................................................ 45 7

Objectives of the Strategy ...................................................................... 45

New Centres ........................................................................................... 46

Greater CBD ............................................................................................ 46

Out of Centre Retailing ........................................................................... 47

Draft Retail Policies ................................................................................ 49



TABLES

Table 1 - No. of Shop Front Establishments in Port Macquarie Hasting Shire ......................................................................................................... 29

Table 2 - Total Retail and Shop Front Floor Space by Retail Centre (sqm)* ..... 30

Table 3 – Population Forecasts for Port Macquarie Hastings .......................... 35

Table 4 - Forecast Household Expenditure Generated by Port Macquarie Hastings LGA ($m2014) ............................................................................ 36

Table 5 - Expenditure by Retail Store Type ($m2019) ...................................... 36

Table 6 - Forecast Total Expenditure in Hastings ($m) ................................... 38

Table 7 - Expenditure by Retail Store Type ($m) ............................................. 38

Table 8 - Demand for Retail Floor Space in Port Macquarie Hastings LGA (sqm GLA) ................................................................................................. 39

Table 9 - Increase in Supply (sqm GLA) ........................................................... 40

Table 10 - Centres Hierarchy – Floor Space to 2026 ........................................ 50

FIGURES

Figure 1 - Cumulative Supply and Demand for “In-Centres” Retail Floor Space to 2036 sqm GLA) .......................................................................... 40

Figure 2 - Cumulative Supply and Demand for Bulky Goods Retail Floor Space to 2036 sqm (GLA) ......................................................................... 43

LIST OF ABBREVIATIONS

ABS Australian Bureau of Statistics

CBD Central Business District

DoP NSW Department of Planning (as it was)

FSR Floor Space Ratio

GLA Gross Lettable Area

Ha Hectares

LEP Local Environmental Plan

LGA Local Government Area

NLA Net Lettable Area

SEPP State Environmental Planning Policy

SLA Statistical Local Area

Sqm Square metre

TZ Travel Zone



EXECUTIVE SUMMARY 1

This report has been prepared by HillPDA for Port Macquarie Hastings

Council as a review of Council’s Retail Strategy adopted in 2004. This

report presents the findings of an analysis of the future needs for retail

and commercial services in the LGA to the year 2036, as well as current

proposals and the implications on Council’s existing retail strategy.

This report feeds into the Local Growth Management Strategy.

Port Macquarie Hastings LGA has around 800 shop front premises

totalling some 142,000sqm of lettable floor space. Floor space is

spatially separated into a number of retail centres. The largest

concentration is the Greater Port Macquarie CBD which comprises

Settlement City, Port Macquarie Town Centre (which includes Port

Central and surrounding shop front spaces), Gordon Street precinct

and Munster Village. The Greater CBD comprises 93,000sqm (65% of

the LGA shop front floor space). The balance is distributed into 14

centres of varying sizes – Wauchope and Laurieton being the next 2

largest centres with approximately 12,000 and 11,000sqm respectively.

Of the 142,000sqm of shop front space around 117,000sqm is occupied

retail space (excluding retail space outside the centres). The balance is

vacant space and non-retail commercial uses.

Port Macquarie Hastings LGA had a population of 75,000 people in

2011 and is expected to reach 103,000 people by 2036. Population

growth (from 1.1% increasing to 1.2% per annum) as well as real

growth in retail spend per capita (expected to be around 1.0% per

annum) translates to growth in expenditure from $972m in 2014 to a

forecast of $1.6 billion in 2036. Tourism and spending in the Port

Macquarie Hastings centres from residents outside the LGA account

for a further $136m to $146m per annum. Demand for retail space in

the LGA is 197,000sqm in 2016 increasing to 274,000sqm by 2036 of

which one quarter is expected to be in “out-of-centre” or bulky goods

locations.

There are a number of mooted proposals or plans for expansion of

retail floor space – the main ones being, Thrumster (likely to be in two

stages up to 10,000sqm), St Joseph's School site (6,300sqm of

approved retail floorpsace in Stage 1) and Lake Cathie / Bonny Hills

(5,000sqm). Assuming all notional proposals are completed by 2026

then there will be 14,000sqm of undersupply of non-bulky goods retail

floor space in the LGA.

It is expected that the former “Food for Less” site and adjoining car

park would be developed well before 2026 although at this stage its



retail mix is unknown. This could potentially add a further 5,000sqm or

more retail space. Settlement City had approval to add a further

10,000sqm although that consent has now lapsed.

To ensure the viability of the Port Macquarie Town Centre it is

recommended the Retail Policy in the Port Macquarie Hastings LGA

adopt the following objectives:

1. Provide quantity, quality and convenience for consumers as well as

a wide range of shopping opportunities and commercial

experiences;

2. Provide for further growth in retail and commercial space to meet

growth in demand generated by population and household

growth;

3. Protect the integrity and viability of existing centres to the extent

that they continue to perform a valuable community function;

4. Protect current employment levels in retailing and hospitality

industries for the residents of the LGA and expand opportunities

for further employment;

5. Provide for adaptability and flexibility overtime to allow for

growth, changes in demographics, consumer needs, emergence of

new or innovative retail formats and retailers;

6. Include medium to high density inner city housing and shop-top

housing as a key driver of economic viability and growth.

7. To maintain and enhance the present hierarchy of retail centres

throughout the Port Macquarie Hastings Local Government Area.

8. Protect the integrity and viability of the Port Macquarie Town

Centre;

9. To encourage new retail development to occur within the existing

identified Commercial Business Districts of the LGA (Greater Port

Macquarie CBD, Laurieton and Wauchope); and

10. New retail centres to be restricted to Area 13 (Thrumster) and

Area 14 (Bonny Hills).

Growth in demand will continue post 2031. The majority of demand is

expected to be west of Port Macquarie. Solutions to growth include:

An enlarged Thrumster (20,000sqm or more to include a discount

department store or equivalent) or a new centre south of

Thrumster (post 2031). Moreover, the larger scale mixed use zone

at Thrumster could incorporate a larger scale retail offer in the

longer term assuming Councils opts to amend the planning control

for that area;

An expansion of Major Innes Road to say 10,000sqm. This would

be warranted given the expansion of population in the area with



more than 3,000 additional residents and 5,000 students over the

next 20 years;

Continued expansion of the CBD should be encouraged to

reinforce its role as the major centre for the Mid-North Coast. In

the long term higher density mixed use development and above

ground floor retail space may be possible and viable;

Some expansions may be warranted in Camden Haven and

Wauchope given some expected growth. Expansion of other

existing centres is unlikely to be warranted given modest growth

forecast in these areas;

Maintain the retail hierarchy, with the Greater Port Macquarie CBD

serving as the primary regional shopping destination and the

remaining centres operating as secondary centres; and

Local retail centres should be central to the populations that they

intend to serve.

The following table provides recommendations on the maximum

leasable retail floor areas by retail centre to 2036.

Classification Centres Appropriate Size (sqm GLA)*

Greater Port Macquarie CBD Includes Settlement City, Port Central and surrounding retail and Gordon Street

120,000

Town Centres Wauchope 12,000

Laurieton 12,000

Large Villages Lakewood 5,000

Lake Innes 10,000

Lake Cathie 5,000

Lighthouse Plaza 5,000

Bonny Hills (Future Centre) 5,000

Thrumster (Future Centre) 10,000

Small Villages North Haven, Kew, Kendall, Lighthouse Beach, Flynn's Beach, Waniora Parkway, Bonny Hills and Clifton

Various but around 2,000sqm per centre

TOTAL Approx 200,000

* Excludes non-retail shop front space such as real estate agents, medical, travel agents, etc

The strategy and above floor areas should be reviewed every 5 years.



INTRODUCTION 2

This report is a review of the Council's Retail Strategy for Port

Macquarie-Hastings Council (‘Council’) prepared previously in

December 2010. As part of this review HillPDA analysed the future

needs for retail and commercial services in the LGA to the year 2036,

as well as current proposals at the time and their implications on

Council’s existing retail strategy.

This review includes an update of the demand modelling based on

revised population projections and changes to the competitive

environment. This report will be used to inform the Port Macquarie-

Hastings Urban Growth Management Strategy (UGMS) 2011 which is

currently under review. The new Strategy will provide planning for all

forms of land uses to 2036.

Study Objectives

In order to develop and evaluate a range of options for the planning

and management of retailing in the LGA it is necessary to have a clear

set of objectives. At the commencement of the study key objectives

were established – these being:

Provide quantity, quality and convenience for consumers as well as


experiences;

Provide for further growth in retail and commercial space to meet


growth;

Protect the integrity and viability of existing centres to the extent


Protect the integrity and viability of the Greater Port Macquarie

CBD; and

Protect current employment levels in retailing and hospitality


for further employment.

Methodology

The tasks undertaken in the preparation of this report included:

Forecast population growth, resident and tourism spend in the LGA

to 2036;

Forecast demand for retail floor space based on forecast retail

spending;

Identify areas of shortfall in supply by area and retail store type;

Identify proposals that will increase supply;



Review Council’s existing strategy in its ability to address current

and foreseeable issues; and

Make recommendations regarding the planning for, and control of,

retail provisions in the LGA; and



HISTORICAL OVERVIEW 3

Council Studies and Policies

Early Studies

The first major study on retailing in Port Macquarie Hastings was

undertaken by Plant Location International (PLI) in 1985. The study

included a series of recommendations including the recognition of Port

Macquarie as the major centre and the need for a discount

department store to reinforce this role. In 1990 the study was updated

by PLI.

1999 Review

In 1999 Council reviewed the earlier studies with two background

reports prepared by G. W. Smith of Design Collaborative including “A

Report on a Retail Policy Plan” for Hastings Council and a discussion

paper titled “Shopping After 2000”. The papers included recognition of

a hierarchy of centres, measures to protect the Greater CBD of Port

Macquarie and a number of other related issues. The reports did not

agree with the “Greater CBD” concept as the distances between

Settlement City, Port Macquarie central and Gordon Street were too

excessive for the Greater CBD to function as a single centre.

The report suggested that a better long term alternative to expansions

in the Greater CBD is a new “out-of-town” centre in the Sancrox-

Thrumster area to ultimately include a department store and a large

range of retailers. An area of at least 20 hectares was recommended

to be preserved for this option.

2004 Retail Strategy Review

In 2004 Leyshon Consulting prepared a “Retail Strategy Review” which

was largely adopted by Council for its centres policy. Council largely

dismissed the idea of a large regional or sub-regional centre outside

the existing Greater CBD. Instead it has maintained the hierarchy with

the Greater CBD as the main centre, Wauchope and Laurieton as the

district CBD (or town centres) and the remaining centres as villages or

neighbourhoods.

Only three new centres were identified – all being neighbourhood

centres in:

Major Innes Drive (now operating);

Area 13 (Thrumster); and




Each of these centres was to be capped in size to a retail floor space of

5,000sqm. The capped area for Thrumster was increased to 7,500sqm

following a review of the economic impacts by HillPDA in 2007.

Port Macquarie Hastings Retail Strategy Review 2010

In 2010 HillPDA prepared a 5 year review of the Council's Retail

Strategy. That report fed into the Local Growth Management Strategy.

The Report identified the following three Strategies:

Prohibit any new centres with the exception of Thrumster (with an

approximate capacity of 10,000sqm GLA) and Area 14 Lake Cathie /

Bonny Hills (with a maximum size of 5,000sqm);

In order to ensure the viability of the Port Macquarie Town Centre

it was recommended that any proposals for redevelopment and

expansion of retail space in the Town Centre be supported –

particularly proposals that will introduce new retailers and new

formats – even if it results in some oversupply of retail space; and

Discourage or prohibit out-of-centre retailing unless it (a) complies

with the definition of bulky goods retailing under the LEP or

Standard LEP Template and is located on Lake Road, Hastings River

Drive or the B5 Business Development zones on the Oxley Highway

at Port Macquarie, or (b) complies with the definition of a

neighbourhood shop and is no larger than 200sqm.

NSW Policies

Regional Strategies

The Mid-North Coast Regional Strategy identifies a hierarchy of centres

with Port Macquarie being a major regional centre (as well as Taree,

Grafton and Coffs Harbour), Kempsey as a major town, Laurieton,

Wauchope and Lake Cathie/Bonny Hills as town centres.

As a major regional centre Port Macquarie has the majority of growth

and employment opportunities and is the major centre for state and

regional services. These centres are also expected to have “a

concentration of medium to high density living, business employment

and professional services, higher order shopping, warehouses,

transport logistics and bulky goods operations”.

Town centres have more limited trade areas. They have a small to

medium scale concentration of retail, health and other services with

lower density residential. They are reliant on major regional centres

and major towns for high order services, retailing and employment.



Page 25 of the Strategy states that "Fragmentation and out-of centre

retailing should be resisted unless compelling reasons exist in order to

maintain the healthy retail and service functioning of particular centres

in the region." This is key strategy enabling Council to protect and

maintain the retail hierarchy and the viability of existing centres.

In June 2014 the NSW Government released new draft regional

boundaries for NSW. Once the boundaries are finalised for each

region, they will provide the basis for a new generation of strategic

plans called Regional Growth Plans.

The proposed North Coast Region will incorporate areas in the Far

North Coast and Mid North Coast as well as Great Lakes and

Gloucester. The major regional city centres include Port Macquarie,

Coffs Harbour and Tweed Heads.

A North Coast Regional Growth and Infrastructure Plan will facilitate

and deliver the growth needed on the North Coast

This process will review and build on the plans contained within the

2006 Far North Coast Regional Strategy and 2008 Mid North Coast

Strategy, and set an agreed government and community vision for the

region. Once finalised, the Regional Growth and Infrastructure Plan will

replace the regional strategy.

Until a Regional Growth Plan is prepared, the Mid-North Coast

Regional Strategy will continue to apply to the region.

NSW Draft Centres Policy

Recently there has been the growing awareness and investigation of

barriers to competition in Australia, particularly in the retail industry.

As a result of these investigations the Australian Government directed

state governments and planning authorities to review the flexibility of

planning regulations and policies regarding retail development. In

response the NSW Department of Planning released the draft Centres

Policy in April 2009.

The sensitivity of Australian households to retail prices is particularly

acute given that Australians spend between 12 and 14% of their after

tax income per annum on basic grocery items1. Coupled with the

pressures of the economy, Australians experienced an increase in basic

grocery prices over the previous five years. In fact the rate of grocery

1 Based on Household Expenditure Survey (ABS cat.no. 6530.0) and Census of Population and Housing (ABS cat. No. 2003.0) data



price increased significantly greater (an estimated 6%2) above the

headline Australian inflation rate and showed no signs of abatement.

The growth of grocery prices raised significant political interest and

debate over the course of 2008 and 2009. In response the Australian

Government instructed the Australian Competition and Consumer

Commission (ACCC) to undertake a full inquiry into factors potentially

affecting retail prices including the competitiveness of the retail

industry and barriers to the entry of new retailers.

Relevant to this study, the ACCC Inquiry identified the ‘very significant

barriers to entry for large-format, one stop shop supermarkets’ as a

prominent issue. The identified barriers included:

Access to retail units within shopping centres owing to restrictive

provisions on centre leases;

Tactics applied by major retailers to protect their interests against

prospective retail developments; and

Access to suitable development sites owing to land use zones.

To address the matter of access to sites for the retail industry, the

inquiry recommended that governments across Australia look at new

ways to incorporate competition into planning decisions. It stated that

“Particular regard should be had to whether the [development]

proposal will facilitate the entry of a supermarket operator not

currently trading in the area”.3

In response to the planning recommendations provided by the ACCC

Inquiry and the current economic climate, the NSW Department of

Planning prepared and released the Draft Centres Policy for

commercial and retail development in NSW.

The Policy, released in April 2009, recognised that the market is best

placed to determine the need for development and the supply of

available floor space to accommodate demand. The role of the

planning system is to accommodate this need whilst regulating its

location and scale.

In light of these fundamental principles, the Draft Centres Policy

focused around six key principles. The principles relate to:

1. The need to reinforce the importance of centres and clustering

business activities;

2 Urbis Retail Perspectives, June 2009 3 Report to the ACCC Inquiry into the Competitiveness of Retail Prices for Standard Groceries, July 2008, Australian Competition and Consumer Commission (Page xix)



2. The need to ensure the planning system is flexible, allows centres

to grow and new centres to form;

3. The market is best placed to determine need. The planning system

should accommodate this need whilst regulating its location and

scale.

4. Councils should zone sufficient land to accommodate demand

including larger retail formats;

5. Centres should have a mix of retail types that encourage

competition; and

6. Centres should be well designed to encourage people to visit and

stay longer.

The six key principles are discussed below.

Principle 1: Retail and Commercial Activity should be Located within Centres

The first principle of the Draft Centres Policy reinforces the

longstanding strategy to concentrate the predominant share of retail

and business floor space within town centres. The clustering of uses

within centres is justified for environmental and economic reasons. By

way of example, focusing uses within centres makes efficient use of

existing infrastructure including public transport, can improve business

efficiency and productivity and allow for a range of uses to be provided

to meet consumer needs.

Principle 2: Centres should be able to Grow and New Centres Form

The Draft Centres Policy identifies that areas experiencing significant

increases in population and real income must be dynamic and respond

to “prevailing market demands” through the extension of existing

centres or the growth of new ones.

Principle 2 of the Draft Centres Policy recommends the rezoning of

land in appropriate centre locations or locations adjacent to centres in

order to facilitate business expansion and to enable new businesses to

enter the market.

Principle 3: Market Determines Need for Development, Planning Regulates Location and Scale

The third principle of the Draft Centres Policy identifies that the market

is best placed to determine demand for retail and commercial

development. Accordingly, the role of the planning system is not to

assess the appropriateness of development on the basis of demand,

but rather to make an assessment as to the external costs and

benefits.



There have been a number of criticisms with the policy including

ambiguity with and potential inconsistency or conflicts between the

principles. We understand that the NSW Department of Planning is

currently working to remove these ambiguities and inconsistencies for

the final policy and that there may also be differences between

metropolitan and non-metropolitan policies.

Principle 4: Ensuring the Supply of Floor Space Accommodates Market Demand

The fourth principle of the Draft Centres Policy emphasises the

importance of competition between retailers. The key intention of this

principle is to create better quality, cheaper and more accessible goods

for all consumers through enhanced competition. To support

opportunities for greater competition, the Draft Policy requires

councils to ensure that there is sufficient zoned land to enable

additional (and new) large format retailers to enter the NSW retail

market.

Principle 5: Support a Wide Range of Retail and Commercial Premises and Contribute to a Competitive Retail Market

Principle 5 of the Draft Centres Policy states that, subject to meeting

the appropriate location and design criteria, the zoning and

development assessment process should not consider impacts

between existing and proposed retailers as a planning consideration.

Whilst the Principle seeks to extract the matter of individual business

impact from planning assessment (in keeping with the findings of

various Land and Environment Cases – refer to Section 79C below) the

effect of a proposed development to the function and vitality of

existing and planned centres will remain as an important local issue.

Principle 6: Contributing to the Amenity, Accessibility, Urban Context and Sustainability of Centres

Principle 6 of the Draft Centres Policy highlights the importance of

design quality, development layout, connectivity and integration. The

Policy recognises that good design supports the vitality and function of

a town centre as well as the viability and success of a retail

development. Accordingly good quality design is in the interests of

planning authorities, retailers and consumer alike.

Post 2010

The Draft Centres Policy was publicly exhibited and the then NSW

Department of Planning and Environment amended it with a Draft

Activity Centres Policy. However this policy was not publically



exhibited. To date there remains no adopted State wide centres

policy.

Section 79C of the EPA Act

Section 79C provides the matters for consideration by consent

authorities in the determination of development applications. This

includes an assessment of the likely economic and social impacts of a

development proposal. Judgements have provided some guidance in

determining which matters are relevant.

In Fabcot Pty Ltd v Hawkesbury City Council (97) LGERA, Justice Lloyd

noted "economic competition between individual trade competitors is

not an environmental or planning consideration to which the economic

effect described in s 90(1)(d) is directed. The Trade Practices Act 1974

(Cth) and the Fair Trading Act 1987 (NSW) are the appropriate vehicles

for regulating competition. Neither the Council nor this Court is

concerned with the mere threat of economic competition between

competing business…. It seems to me that the only relevance of the

economic impact of a development is its effect ‘in the locality’…”.

In Kentucky Fried Chicken Pty Ltd v Gantidis (1979) 140 CLR 675 at 687

Justice Stephen noted that “if the shopping facilities presently enjoyed

by a community or planned for it in the future are put in jeopardy by

some proposed development, whether that jeopardy be due to

physical or financial causes, and if the resultant community detriment

will not be made good by the proposed development itself, that

appears to me to be a consideration proper to be taken into account as

a matter of town planning... However, the mere threat of competition

to existing businesses if not accompanied by a prospect of a resultant

overall adverse effect upon the extent and adequacy of facilities

available to the local community if the development be proceeded

with, will not be a relevant town planning consideration.”

The LEC has stated that Councils should not be concerned about

competition between individual stores as this is a matter of fair

trading. But it should concern itself with impact on established retail

centres. These principles were reiterated by Justice Pearlman in

Cartier Holdings Pty Ltd v Newcastle City Council and Anor [2001]

NSWLEC 170. “It follows that Section 79C(1)(b) does not require the

consent authority to take an approach in consideration of the relevant

matter different from the approach formerly taken in the application

of 90(1)(d).”



RETAIL TRENDS 4

The retail industry is a dynamic one with a range of trends influencing

its shape, form and composition. The following Chapter explores some

of the trends likely to influence the nature of retail within Port

Macquarie-Hasting and the needs of the residents it serves.

Lifestyle Trends

Traditionally retailing followed a hierarchy from regional through to

district to small local centres. More recently that hierarchy has been

challenged by the following social and economic trends:

Increase in the proportion of working women;

Increase in the proportion of part-time and casual employment

and reduction in full-time employment;

Reduction in the proportion of households that match the

‘traditional family’ model and an increase in the number of single

persons and single parent households;

Increase disparity of household income, ranging from high double

income households to households that rely on welfare;

Ageing of the population; and

Increasing working hours for those in full-time employment.

Since 1980 the industry’s response to these changes has led to the

growth and introduction of:

The regional centre which incorporate a large diversity of shops,

including department stores, complemented by leisure activities

and other facilities with an extensive trade area;

‘Convenience community centres’ usually dominated by a

supermarket to meet daily and weekly shopping needs and

‘standalone supermarkets’ offering a just-in-time ‘one stop shop’

(petrol, video, pharmacy, groceries, fast food, etc.);

‘Convenience service centres’ being petrol stations on main

highways but offering a just-in-time shop with a range of groceries

and fast foods (e.g. 7 Eleven and Five Star);

‘Category killers’ that provide an extensive range and depth of

competitively priced merchandise within a single market segment

(– e.g. Bunnings, BabyCo, Harvey Norman, Freedom, Toys R Us,

etc).

Bulky Goods that integrate warehousing with retailing and ‘Power

Centres’ that incorporate multiple category killers and bulky goods

retailers in one large centre.



Factory Outlets usually in fringe industrial areas providing a cluster

of out of season clothing and homeware stock.

More recently internet shopping has allowed consumers to

research products and prices on line and to have goods delivered.

All the above demographic and employment trends point to the need

for more flexible trading hours to provide convenience for what is

termed the “time-poor” shopper. In other words, we are steadily

replacing the once-a-week shop with a series of small shopping trips as

and when we need to buy various goods. This is called “just in time”

shopping.

In terms of future retail trends, HillPDA has identified the eight most

significant trends likely to influence the retail sector over the next

decade. It is important to note that this is not an exhaustive list, nor

does it purport to comment on trends which would affect the in-store

experience (e.g. the increasing emphasis on personalised marketing).

Some of the key trends identified include the following:

1. Consolidation of demand within larger centres;

2. Larger supermarkets in smaller centres;

3. Increasing demand for residential uses in centres;

4. The emergence of ‘dark stores’;

5. Continued evolution of online retail;

6. Continued expansion of new and existing international retailers;

7. Ongoing renewal and reconfiguration of stores and centres; and

8. Increasing demand for out-of-centre sites to be developed for

retail purposes.

For the purposes of context, each of these trends are explored further

below. Some of these trends currently relate only to Sydney

Metropolitan, but we expect that some of the trends may appear in

large coastal towns – particularly those towns where high density living

and land scarcity

1. Centralisation and Diversification in large centres

Large retail centres are attractive to consumers because of their retail

choice, product range and the mixed-use nature of their offer which

extends well beyond purely retail. Larger centres are also more

attractive to retailers comparative to smaller centres due to their

larger catchment areas. It is anticipated that larger centres will

continue to strengthen their offer as a result of the expansion of new

international retailers in the NSW market (see below).

International retailers seek to locate in the largest centres with the

most extensive trade areas first, before potentially expanding to



smaller centres lower down the hierarchy. As consumers are becoming

more brand savvy and are increasingly looking for particular brand

names, it is expected that they will be increasingly attracted to the

larger centres which provide this retail offer.

As a result of these considerations we expect the largest quantum of

comparison floorspace growth over the next decade to be

consolidated in the largest centres in the Metropolitan centres

hierarchy. Notwithstanding the above, over time international retailers

(who we expect to shape the future retail landscape over the next

decade) will widen their scope to look for opportunities for smaller

stores in lower order centres and large regional towns. As such we

would expect a substantial lag in international retailers locating to the

Port Macquarie-Hasting region.

2. Larger supermarkets in smaller centres

A recent trend which is likely to continue to influence the market

relates to demand for larger supermarkets in smaller centres and inner

metropolitan locations. This trend will see an increase in proposals

seeking to develop supermarkets of up to 1,400sqm in neighbourhood

centres where previously smaller supermarkets or convenience stores

may have prevailed. Increasingly split level supermarkets will be used

as models to maximise the potential of available sites.

It is anticipated that this trend will continue owing to:

Growing demand for additional supermarket facilities in inner city

locations as a result of urban infill development;

The cost of land and scarcity of sites capable of accommodating

full-line supermarkets in inner city locations and existing centres;

Increasing consumer habits towards undertaking multiple smaller

convenience shopping trips;

Increasing desire from consumers for walkable, convenient access

to food and grocery shopping reflecting declining vehicle

ownership/ usage and expectations for access to retail facilities

outside of traditional trading hours; and

Strong activity from smaller supermarket operators including ALDI

and Harris Farm with Coles and Woolworths increasingly

competing at this end of the market.

For these reasons, it may be argued that the categorisation of centres

at different levels of the hierarchy should be limited, with particular

respect to the number and type of retailers they should contain

because this will evolve over time. Rather, a more effective

categorisation could relate to the role and function of a centre and the



manner in which it should operate. Development applications could

then be assessed against the extent to which they would accord with

the desired centre role and function.

We envisage this trend to continue in the inner metropolitan area but

also middle ring priority precincts to service future high density

housing as land becomes increasingly scarce.

We are yet to witness this trend in regional NSW including Port

Macquarie-Hasting LGA; this may be a longer term trend.

3. Increasing demand for residential uses in centres

Demand for housing within centres is increasing as a result of:

Historically low housing starts since 2003 and pent up demand for

residential stock followed by the recent housing boom;

Demand for smaller dwellings in accessible locations to support

affordable living; and

Lifestyle changes with residents increasingly favouring the

accessibility, retail and service provision of centres. This reflects

the increasing preference of young households to live in highly

accessible and well serviced locations, retirees seeking to remain in

in their local neighbourhoods and downsize accordingly and

continued immigration from the Asian demographic who

traditionally favour in-centre living.

As a result competition for land, and rising land values in many centres

have increased and will continue to do so. There is a need to recognise

this as a key dynamic influencing centre development and plan centres

carefully as a result. However this is not an issue for all centres, with

pressure from residential uses most acute in those in established urban

areas.

In Doncaster, Victoria, an application for a 10,500sqm multi-level

Bunnings store with 385 residential units above was approved on a 1.1

hectare site adjacent to Westfield Shoppingtown4. This demonstrates

that a range of retail store types could potentially be developed in

metropolitan locations for mixed-use purposes in the future.

In a number of coastal cities and towns we are seeing population

growth combined with an ageing population and a growing demand for

retirement. These people will increasingly desire proximity to retail,

commercial, health and personal services and rely less on private

motor vehicle travel and as such we would expect this trend to

4 Source: Council Agenda, Manningham City Council (28 May 2013)



accelerate over the coming decade, including in Port Macquarie-

Hasting .

4. The emergence of dark stores

As demand for supermarket and grocery store related floorspace

continues to grow with NSW’s population growth, we expect asset

owners and retailers to seek greater floorspace efficiencies from

existing stores. This may support a higher propensity for online

supermarket orders to be met by dark stores located in industrial/

employment areas rather than existing supermarkets. This trend has

been evolving in the UK and in time we expect to see it emerge in

Australia.

Dark stores effectively operate as dispatch warehouses that provide

products directly to customers without first being channelled through

a local store. This creates supply chain efficiencies and reduces the

demand for in-centre floorspace, the latter being a matter we were

told by Stakeholders during consultation to inform the Report in one

respect can be challenging to secure. Whilst dark stores comprise

warehouses they can in effect broaden the land use zones in which

supermarkets are able to operate. Conversely it could be argued that

dark stores allow existing in-centre floorspace to be better utilised to

serve the needs of in-store shoppers. This emerging trend may present

opportunities for Port Macquarie-Hasting in the future.

5. Continued evolution of online retail

A major topic of debate regarding the future of retail in Australia is the

continued growth of online retail and the impact this may have to

‘bricks and mortar’ retail.

The latest data from National Australia Bank (NAB) indicates that in the

year to October 2013 online sales accounted for some 6.4% of

traditional retail spending overall, although market penetration rates

vary significantly across category types5. Retail analysts agree that this

will grow in the future although there is no consensus as to the

amount of growth that can be expected.

It is likely that the growth of online retail will change the way shoppers

interact with physical retail stores but current industry forecasts

suggest this may not lead to a significant decline in demand for high

street floorspace (with particular regard to supermarket and other

food retail floorspace) largely on account of the scale of forecast

population growth.

5 Source: NAB Online Retail Sales Index, October 2013 (December 2013); Mapinfo Anysite 2014; IBIS World Report



However in areas of inland regional NSW that are subject to stagnant

or even declining population, the evolution of online retail may present

more of a challenge. Defining a point of difference for physical centres

in these locations will be key as explored below.

Notwithstanding the fact that floorspace will not substantially increase

in the future within the Port Macquarie LGA, the following trends will

influence the nature of retailing in centres in the future as follows:

The evolution of stores as showrooms. Whilst shoppers may

research various options and purchase the final product online in

many cases they will still seek to touch, feel, weigh and operate

the items in store before purchasing. As such although the sale

may be conducted via an online median this trend is not expected

to lead to a direct decline in demand for high street

representation. Examples of this trend include the format of Apple

stores and the increasing trend for clothing store operators such as

G-Star, Glue and General Pants to direct customers to online sales

for dispatch. This would allow retail operators to make more

efficient use of existing stores with less requirement for store stock

to be kept on-site;

Increased need for engaging store experiences. Retailers will need

to work harder to attract shoppers into stores. Stores are less likely

to be able to compete on price comparative to the internet but by

promoting shopping as an experience through, for example,

outstanding in store service, engaging shopfronts/ storefronts,

fitouts and interactive design. Examples of this trend include

Hollister and Apple;

Engaging shopping centre experiences. Combined with the point

above, shopping centres will also have to focus more on in-centre

experiences to compete with online retail and with competing

retailers in other centres. With the continued growth of shopping

as a leisure activity rather than being purely functional and with

the increasing desire of customers to undertake shopping and

leisure activities at the same time, it is expected that investment in

food courts, entertainment facilities and in centre experiences will

continue;

Multi-media integration. This trend will see the merging of virtual

multi-media with the in-store and in-centre experience enabling

customers to check prices and product ranges on smartphones in

real time; and

Click and Collect. This trend refers to the process through which a

shopper pays for goods online but collects goods from a local store



or drop-off point. The growth of technology and multi-media

integration will see greater numbers of businesses offering ‘click

and collect’ and the positioning of centres as convenient hubs for

collecting goods ordered online. Westfield London has recently

been trialling Collect+ @ Westfield, a service in which shoppers try

products in store before committing to purchase them online. This

in-store service provides a lounge area, fitting room and one hour

free parking for customers and, if successful, is expected to emerge

in Australia.

6. Continued expansion of new and existing international retailers

Australia has experienced an influx of international retail brands over

the last few years, with this trend forecast to continue. International

brands have realised the potential of Australia for market share

expansion often pre-empted by sound online spending from Australian

based customers.

Sydney has already witnessed brands like Zara, TopShop, Pottery Barn,

Hollister and TM Lewin open flagship stores in higher order centres.

However, as these brands become established we expect aggressive

store roll-outs to occur in regional and subregional shopping centres.

This is a consumer benefit despite the potential for adverse impacts

upon existing retailers who will be forced to compete harder for trade.

The influx of new retailers into Australia will continue with brands

including H&M, Uniqlo, Victoria’s Secret and Forever 21 actively

seeking floorspace. Coupled with this we expect some retraction in the

department store market which will require the remodelling of existing

floorspace.

7. Ongoing renewal and reconfiguration of stores and centres

As a result of increased interest and demand in centres at the largest

and smallest ends of the retail spectrum, we expect that there may be

some challenges for middle-sized centres. This may require such

locations to redesign their offer and use more innovative approaches

towards retaining and gaining market share. Examples of this approach

in NSW include:

A new approach to Coles’ in-store retail offer in higher socio-

economic areas;

The remodelling of centres to place greater emphasis on the

provision for cafes and restaurants to support the evolution of

shopping as a leisure and entertainment activity; and



Reduction in floorspace accounted for by department stores and

an increase in the presence of branded designers to entice

shoppers e.g. Nike in Myer and the roll-out of local brands in David

Jones stores (e.g. Ginger & Smart, Zimmermann, Camilla, Ellery,

Willow, and Camilla & Marc).

International examples include:

Tesco Extra hypermarkets (large supermarkets of around

8,000sqm) which in response to declining market share and

profitability in the UK have sought to diversify their offer away

from purely convenience retail towards ‘lifestyle and leisure

centres’ which include children’s play centres, cafes and toy stores;

The growth of smaller supermarkets in accessible locations

responding to the demands of the growing cash-rich but time poor

demographic market sector in the UK, for example Marks and

Spencer Simply Food stores (500-1,500sqm) in rail stations;

Retail formats in the US have transitioned towards operating as a

showroom for particular brands and with an emphasis on fresh,

good quality food. In this manner they operate more as

showrooms and markets than a cohesive store. This is a trend we

expect to emerge in NSW as department stores adapt to stronger

competition from international retailers and changing consumer

tastes; and

In Hong Kong the evolution of entire shopping malls to target niche

market sectors such as the youth sector or the food and drink

sector. In doing so such localities seek to establish a point of

difference from traditional shopping malls and in this manner

capture market share.

As discussed above we would expect a substantial lag in

international retailers locating to the Port Macquarie-Hasting

region.

8. The Trend in Out-of-Centre Retailing

The continuing level of demand for floorspace from bulky goods

operators and other retailers such as Costco and supermarkets will

lead to continued pressure to develop on out-of-centre industrial and

employment sites for such uses given the constraints on in centre

development.

In this section we examine the trend in bulky goods retailing and the

requirements for successful bulky goods centres.



Bulky goods retailing is often described as low cost / high bulk retail

goods and ancillary products. Retailers of these goods and products

have identified financial benefits in lower occupancy costs and

economies of scale outside of established high-rent and high-cost retail

centres.

Bulky goods retailing first appeared as showrooms attached to

distribution and warehousing industries. Over time bulky goods strip

retailing and centres have attracted a number of furniture, appliance

retailers and hardware stores such as Harvey Norman, Domayne, Bing

Lee, BabyCo, Bunnings, bedding shops, lighting shops, etc. This is

despite the fact that these shops: ·

Do not necessarily use the same site for their head office,

distribution or warehousing; and

Sell many items that are not bulky.

This trend has occurred because these stores require or desire:

More floor space with cheaper rent;

Convenient and ample car parking; and

Convenient loading and unloading areas.

Many of these stores have become destination centres and therefore

do not require central location in traditional shopping centres. They

have become attractive destinations for shoppers that are searching

for lower prices and convenience of parking and loading.

More recently the bulky goods retail sector has been evolving from

former industrial premises to purpose built bulky goods retail parks

that allow brand awareness, enhanced economies of scale and

consumers the benefit of comparison shopping. Some recent examples

include the development of:

Large hardware houses;

Supacentas; and

Homemaker centres.

The hardware houses (Bunnings and Masters) sell an extensive range

of hardware, building supplies outdoor furniture and garden supplies

and some domestic appliances in one large building (4,000 to

14,000sqm). A Supacenta is a single building comprising multiple

tenants that trade predominantly in bulky goods. Examples include the

Moore Park, Caringbah and Auburn Supacentas. Homemaker centres

are similar except that there is a stronger emphasis on hardware and

building materials in addition to furniture and appliances. Furthermore



they have a significant proportion of trade to contractors (i.e.

wholesaling). Requirements for successful bulky goods centres include:

Having a large and extensive trade area of 100,000 or more

people;

being in a central position in the trade area or near the main entry

point of a large trade area (This is why Kotara for example has

been far more successful than Newcastle or Newcastle West-end);

Cheap and plentiful land (often zoned industrial) to enable

plentiful parking and loading and unloading facilities; and

Being located on a major road with high visibility and accessibility.

Desirable requirements include:

Having a trade area that is expanding as new homes generate

higher demand for bulky goods than established homes; and

Having a wealthy trade area with high disposable incomes. Higher

income households spend considerably more on bulky goods than

lower income households.

In a number of instances retail centres have been unable to

accommodate the emerging style of bulky goods retailing. Bulky goods

retailers require relatively large sites that are often not available within

existing retail centre zones. And, even where sufficiently large centre

zone sites exist, it is claimed by retailers that high rentals preclude

bulky goods retail developments.

The locational preferences of bulky goods retailers have therefore led

to some conflict with regulatory authorities on the basis that retailers

do not always desire to locate in centres.

Bulky goods retailing has experienced, and still is experiencing, a

period of considerable change both nationally and internationally.

Perhaps the most significant changes are:

The trend towards bulky goods retailers grouping together in large,

purpose-built bulky goods centres;

The emergence of 'category killer' superstores; and

Retailers looking to expand both within a city and nationally, once

a successful store format has been established. Many of these

retailers were not established 20 years ago.

In some overseas markets there has been a trend towards purpose-

built bulky goods centres evolving into more of a mixed use retail

format which includes non-bulky goods uses. For example,



complementary uses such as cafes, clothing retailing, brand direct

retailing etc, are locating with bulky goods retailers.



RETAIL CENTRES 5

Supply of Retail Floor Space

Since the 2010 update of the Retail Centres Study there has been

several additions to supply. The main additions were:

Construction of a new retail centre at 28 Hayward Street which

includes a 4,200sqm Coles supermarket and 2 specialty stores. The

new Coles replaced the former Coles store on Short Street which

has since been converted to Officeworks and JB Hi-Fi stores;

Construction of a 1,300sqm Dan Murphys on Horton Street;

Expansion of the IGA supermarket in Wauchope to 1,600sqm plus

3 additional specialty stores including liquor;

Some internal modification and tenancy changes in Settlement

City; and

ALDI Foodstore in Hastings River Drive (although this is outside the

defined centres).

Reduction in floor space includes the closure of the former Food for

Less supermarket and adjoining specialty stores.

Excluding the industrial areas Port Macquarie Hastings has almost 800

shop front premises distributed in around 18 centres of varying sizes.

Around 600 of these premises are being used for retailing of goods,

167 are being used for non-retail commercial purposes (such as real

estate, travel agents, finance, medical, etc) and 25 are vacant. The

number of businesses in the retail centres is provided in the table

below.



Table 1 - No. of Shop Front Establishments in Port Macquarie Hasting Shire

Retail Centre Super-

markets

Large

format

mini-

majors

Restau

rants Retail

Personal

Services

Total

Retail

Non

Retail Vacant Total

CBD 4 1 42 94 23 164 83 18 265

Settlement City 2 5 2 44 6 59 2 10 71

Gordon St 1 3 10 23 9 46 48 5 99

Munster Village 0 1 0 6 0 7 2 0 9

Total CBD 7 10 54 167 38 276 135 33 444

Bonny Hills 0 0 0 3 0 3 1 0 4

Clifton 0 1 2 5 3 11 3 0 14

Flynns Beach 1 0 4 2 1 8 0 2 10

Lake Innes 1 0 3 4 1 9 2 1 12

Lighthouse Shops 2 0 7 3 1 13 2 0 15

Lighthouse Plaza 1 0 3 6 1 11 3 3 17

Lord St 0 0 2 4 3 9 30 3 42

Waniora 1 1 1 2 3 8 0 0 8

Kendall 0 0 0 3 0 3 2 0 5

Kew 0 0 1 4 0 5 2 1 8

Lake Cathie 1 2 2 5 0 10 4 3 17

Lake Cathie Nth 0 0 2 4 0 6 0 0 6

Laurieton 3 1 15 44 10 73 24 3 100

Lakewood 1 2 1 3 2 9 1 0 10

North Haven 1 0 3 6 3 13 2 0 15

Timbertown 0 1 2 3 0 6 3 0 9

Wauchope 1 0 7 67 11 86 43 11 140

Total 20 18 109 335 77 559 257 60 876

Supply of retail floor space is measured by a combination of the

number of stores and floor space (square metres). Floor space is

measured by lettable area (the area leased or potentially leased to a

store operator and includes back of house storage and office) but

excludes common areas, plant rooms and loading docks. In the case of

indoor centres such as Settlement City and Port Central, it includes the

area leased to the shop owners but excludes common areas, car

parking, toilets, plant rooms, fire egress, etc.

Presently there is around 142,000sqm of shop front space in the LGA

of which around 117,300sqm is being used for retailing. Total Retail

floor space is shown in the table below:

Sources: Port Macquarie Hastings Council.



Table 2 - Total Retail and Shop Front Floor Space by Retail Centre (sqm)*

Centre Supermarkets & Grocery Stores

Other Retail Total Retail Non-Retail Shop Front

Total Shop Front Space

Greater CBD

Port Central 2,450 12,350 14,800 300 15,100

Other CBD 4,200 27,750 31,950 12,900 44,850

Settlement City 4,250 13,850 18,100 1,200 19,300

Adjacent to Settlement City 0 4,200 4,200 400 4,600

Gordon Street West 1,600 5,700 7,300 1,400 8,700

Munster Shopping Village 500 250 750 0 750

TOTAL CBD 13,000 64,100 77,100 16,200 93,300

Wauchope 1,600 7,650 9,250 3,000 12,250

Laurieton 2,400 5,450 7,850 2,800 10,650

Lakewood 3,250 600 3,850 450 4,300

Lake Innes 3,000 900 3,900 500 4,400

Lake Cathie 2,800 950 3,750 500 4,250

Lighthouse Plaza 3,000 1,000 4,000 0 4,000

North Haven 200 1,900 2,100 100 2,200

Kew 200 100 300 200 500

Kendall 200 700 900 200 1,100

Lighthouse Beach 100 650 750 150 900

Flynn's Beach 100 800 900 0 900

Waniora Parkway 300 700 1,000 0 1,000

Bonny Hills 0 450 450 250 700

Clifton 200 1,000 1,200 0 1,200

TOTAL 30,350 9,600 117,300 19,250 141,600

Australian Property Council Shopping Directory, Draft Retail Strategy Review (Leyshon Consulting), HillPDA Floor Space Source:Surveys 2007 and recent development applications. Excludes industrial zoned areas.

A description of the retail centres in the LGA is given below.

Port Macquarie Greater CBD

Port Macquarie Greater CBD has over 90,000sqm of shop front space,

of which 38% is in two large indoor shopping centres – Port Central

and Settlement City.

Port Central is located at 40 Horton Street in the CBD. The major

anchor tenants include Target (7,078sqm) and Ritchies IGA

Supermarket (2,458sqm). Port Central has 54 specialty shops and a

total area of 15,100sqm.

Port Central



Around Port Central the CBD has around 280 shop-front premises

totalling some 45,000sqm of space fronting Horton Street, Hay

Street, Clarence Street and William Street. Anchor tenants include

a new 4,200sqm Coles supermarket, JB Hi-Fi, Officeworks and The

Warehouse.

Settlement City is west of Port Central shopping centre. The major

tenants include Big W (6,618sqm) and Woolworths supermarket

(4,253sqm). There are 58 specialty shops and the centre has a total

area of 19,300sqm. Adjacent to Settlement City are some 22

retailers with around 5,000sqm of retail space. Anchor tenants

include McDonalds, Go-Lo and a large Rivers Clothing store.

Munster shopping centre is a small centre on the corner of

Munster Street and Gordon Street. It comprises a 500sqm Five

Star supermarket, fruit market, butcher and bakery.

There are a number of strip shops and an open court shopping

centre on Gordon Street between Gore Street and Hastings River

Drive. The centre is anchored by a 1,600sqm IGA supermarket, a

1,000sqm fruit and veg store and a 1,500sqm Rebel Sports store.

Total number of premises is around 40 with a total area of around

8,000sqm.

Local Centres

Wauchope

Wauchope is approximately 16km west from Port Macquarie town

centre. The shopping centre had 93 shop front premises of which 26

were being used for non-retail commercial services. Total leasable

floor space is just over 12,000sqm of which around 2,000sqm is

occupied by four hardware stores and 3,000sqm is occupied by non-

retail commercial services. There were no vacancies in 2007 at the

time of survey. Anchor tenants included two recently expanded IGA

supermarkets of 1,620sqm and the 1,300sqm Co-op Department Store

(excluding the hardware component). A 130sqm liquor store and three

50sqm specialty stores has also located near the IGA supermarket

since 2010.

Laurieton

Laurieton is the largest retail centre in the southern part of the LGA.

Its trade area includes North Haven, Laurieton, Dunbogan and Kew.

The centre comprises 84 shop front establishments of which 22 are

used for non-retail commercial services and four are vacant. Total

shop front space is around 10,500sqm of which 7,800sqm is used for

retail. The main anchor tenant is a 2,400sqm Coles supermarket

Settlement City

Wauchope Shopping Centre

Laurieton Main Street



Lake Cathie

Lake Cathie is approximately 15km South of Port Macquarie town

centre. The shopping centre is anchored by 2,800sqm Woolworths

supermarket and there are 1,100sqm of specialty retail shops. The

total centre is in the order of 4,000sqm. This is a popular centre for

shopping due to its high level of ample and convenient parking.

Lighthouse Plaza (Tacking Point)

Lighthouse Plaza is a village centre comprising 12 shops anchored by a

large 3,012sqm Coles supermarket.

Lake Innes (West Port Macquarie)

Lake Innes Shopping Centre on the corner of John Oxley Drive and

Major Innes Drive is the most recent addition to the hierarchy of

centres. It is a local village centre which includes a 3,000sqm Coles

supermarket and 12 specialty shops.

Lakewood

Lakewood is the second youngest centre and is located on Ocean

Drive. It comprises 4,300sqm of space anchored by a 3,250sqm

Woolworths supermarket.

Other Centres

Other centres in the local government area are generally small village

or neighbourhood centres of less than 1,500sqm. These centres,

including Flynns Beach, Lighthouse Beach, Shellys Beach, North Haven,

Kew, Kendall and Clifton Drive, are usually anchored by a small or mini-

supermarket – less than 1,000sqm in size.

Development Proposals

Current development proposals include the following:

A proposal for some expansion in Laurieton including a new Coles

Supermarket and the conversion of the former Bi-Lo supermarket

into a Target Country store was approved more than 5 years ago.

Consent has now lapsed.

A development application for a pharmacy of approximately

420sqm along Bold Street in Laurieton was granted development

consent.

Approval was given to Settlement City for expansion of around

12,300sqm of which 4,117sqm was for additional retail, 2,924sqm

Woolworths Lake Cathie

Lighthouse Beach Shopping Centre



was for additional commercial and 5,223sqm was for recreational

facilities including a cinema. Approval has since lapsed.

Council has rezoned the land at Warlters Street, adjoining

Settlement City, to B3 Core Business. Subsequently a Kmart

discount department store with additional specialty retail totalling

6,300sqm (GLA) has been approved on part of this site.

Sovereign Hills (Thrumster Area 13) will ultimately have a centre

capacity of around 10,000sqm to service the future 10,000-11,000

residents of Thrumster. Approval for a Woolworths based centre

for the first stage comprising 2,500sqm supermarket, 1,100sqm of

specialty shops and 800sqm market hall has lapsed and has not

been assumed in this analysis.

Development consent was granted for Stage 3 of Timbertown to

include seven retail shopfronts and three commercial shopfronts

totalling 974sqm. The project has substantially commenced.



DEMAND FOR RETAIL SPACE 6

This section forecasts demand for retail space in the Port Macquarie-

Hastings LGA during the period from 2006 to 2036. Demand comes

from three main sources of expenditure:

Residents of Hastings;

Residents of surrounding local government areas; and

Tourists and visitors.

Resident Projections

The increase in availability of private motor transport over this post-

war period resulted in significant demand for residential development

in coastal areas away from traditional rail-based inland townships. The

primary housing market role that Port Macquarie-Hastings played

during the post-war period was to attract families and retirees from

areas further south, in particular the Sydney region. There has also

been demand for housing resulting from the children of those families

setting up their own households. This pattern is likely to continue into

the future, driving development on the outskirts of Port Macquarie

and in the Camden Haven.

In 2011, the total population of Port Macquarie-Hastings Council area

was estimated to be 74,955 people. It is expected to increase by over

16,300 people to 91,276 by 2026 (at an average annual growth rate of

1.32%) and to 102,926 persons by 2036. This is based on an increase of

over 7,100 households during this period.



Table 3 – Population Forecasts for Port Macquarie Hastings

Locality 2011 2016 2021 2026 2031 2036

Camden Haven East 5,941 6,023 6,156 6,250 6,347 6,451

Camden Haven West 3,084 3,205 3,673 4,015 4,407 4,753

Flynns Beach 2,144 2,181 2,231 2,244 2,267 2,301

Hastings River Canals 2,513 2,762 2,891 2,895 2,884 2,880

Inner West Port 2,343 2,337 2,439 2,590 2,814 3,033

Innes Peninsula 3,110 4,109 5,151 6,276 7,030 7,318

Lake Cathie - Bonny Hills 6,024 6,559 7,433 8,341 9,219 10,143

Lighthouse Beach - Greenmeadows 11,805 11,950 12,441 12,825 12,979 13,016

Lord Street 1,739 1,862 1,963 2,124 2,357 2,592

Port Macquarie Rural Fringe 3,386 3,596 3,866 4,119 4,664 5,320

Rural 6,564 6,801 7,024 7,258 7,478 7,675

Shelly Beach - Bellevue Hill 11,060 11,242 11,371 11,452 11,556 11,693

Thrumster 162 754 2,362 3,958 5,647 7,682

Town Beach - CBD 900 1,118 1,241 1,384 1,484 1,611

Wauchope 6,911 7,290 7,661 8,063 8,446 8,883

Westport 7,268 7,354 7,378 7,481 7,493 7,575

Total 74,955 79,144 85,280 91,276 97,072 102,926

Source: Forecast.ID

Resident Spending

In addition to population growth there has been real growth in retail

spend resulting from increasing affluence and economic materialism.

From 1991 to 2005 growth in retail spend per capita was around 1.9%.

There have been periods however where growth has been negative

such as 1986 to 1991 and during 2007 to 2008 when rising interest

rates and petrol prices saw households reducing spend. The GFC and

worsening job security had some negative impacts but government

stimulus measures combined with a lowering of petrol prices and

interest rates maintained levels of retail spend. The average per

annum growth rate in retail spend per capita since 1986 has been

around 1.0% and the long term trend has been around 1.3%. For the

purpose of forecasting we have adopted a rate of 1.0%.

Household expenditure was sourced from Anysite 2014 data which

provides household expenditure by broad commodity type.

The tables below show that Port Macquarie - Hastings LGA will

generate considerable growth in expenditure to 2036.



Table 4 - Forecast Household Expenditure Generated by Port Macquarie Hastings LGA ($m2014)

YEAR 2014 2019 2024 2031 2036

Food & Groceries 312.9 351.5 396.4 464.6 517.8

Liquor Take-Away 99.7 112.0 126.3 148.0 164.9

Take-Away Food 33.4 37.5 42.3 49.6 55.3

Apparel 70.5 79.2 89.3 104.6 116.6

Homewares & Manchester 34.0 38.2 43.1 50.6 56.3

Bulky Goods 119.1 133.8 150.9 176.9 197.1

Other Goods 190.0 213.4 240.7 282.1 314.4

Selected Personal Services 31.7 35.6 40.1 47.1 52.4

Liquor Consumed On Premises 25.6 28.8 32.5 38.0 42.4

Meals in Pubs, Clubs and Restaurants 54.9 61.7 69.6 81.6 90.9

Total 971.9 1,091.8 1,231.3 1,443.0 1,608.2

* Allows for 1.0% real growth in expenditure per annum per capita in line with historic trends.

Source: Pitney Bowes Anysite 2014 and HillPDA

As shown in the above table there is a significant level of growth in

household expenditure – equivalent to 12% from 2014 to 2019 and

65% over the next 22 years to 2036.

The ABS Retail Survey (1998-99 Cat No. 8624.0) provides a cross

tabulation of commodity type by store type (defined by ANZIC).

Multiplying the percentages in the cross tabulation by total dollars

spent generates household expenditure by retail store type. This is

provided in the following table.

Table 5 - Expenditure by Retail Store Type ($m2019)

YEAR 2016 2021 2026 2031 2036

Supermarkets & Grocery Stores 344.4 387.5 443.8 488.1 544.0

Take-away Liquor Stores 73.8 83.1 95.1 104.6 116.6

Specialty Food Stores 38.5 43.3 49.6 54.6 60.8

Fast-Food Stores 48.8 55.0 62.9 69.2 77.2

Restaurants, Hotels and Clubs* 84.4 94.9 108.7 119.6 133.3

Department Stores 67.5 76.0 87.0 95.7 106.7

Apparel Stores 67.9 76.4 87.5 96.2 107.2

Bulky Goods Stores 148.3 166.8 191.1 210.2 234.2

Other Personal & Household Goods 151.0 169.9 194.5 214.0 238.5

Selected Personal Services** 33.2 37.4 42.8 47.1 52.4

TOTAL RETAILING 1057.9 1190.2 1363.1 1499.3 1671.0

* Turnover relating only to consumption of food and liquor (excludes all other types of revenue such as accommodation, gaming and gambling) ** Selected Personal Services includes hair and beauty, laundry, clothing hire and alterations, shoe repair, optical dispensing, photo processing and hire of videos

Note that the total expenditure amount in the two tables above do not

equate. This is because some expenditure is captured by non-retailers

(such as internet shopping) and some turnover captured by retailers is

not household expenditure related (such as wholesaling and hiring of



equipment). Note also that the above tables show turnover generated

by household expenditure. It does not show where that turnover is

captured.

Tourism and Regional Spending

Port Macquarie is known to capture some expenditure from the

neighbouring LGAs of Greater Taree and Kempsey. In 2011 Greater

Taree had around 46,541 residents and Kempsey had around 28,000

residents. Previously Taree had only one discount department store

and Kemspey had only a Target Country store. The retail offer in Port

Macquarie was considerably stronger.

However there have been some recent expansions in Greater Taree

and Kempsey. Taree City Centre constructed in 1997 added a second

discount department store (Big W) and full-line supermarket

(Woolworths) as well as a further 43 specialty shops. Big W and a new

Woolworths supermarket are now also in Kempsey. These additions

have probably arrested some of the escape expenditure to Port

Macquarie.

Estimating the level of expenditure from Taree and Kempsey into Port

Macquarie is vexed and there is a danger of over estimating from

double counting since these day trippers are also included in tourism

statistics.

The National Visitor Survey is the major source of information on the

characteristics and travel patterns of international, domestic overnight

and day tourists.

By year ending 2014 the Port Macquarie LGA attracted over 698,000

domestic overnight visitors to the region, consisting predominantly of

the leisure market. Visitors to GPM represent 3% of the visitors to NSW

annually.

Total spend was $346m from overnight tourists and $77m from day

trippers. Food and drink, shopping and entertainment make up 41%6 of

overnight visitors’ expenditure. Assuming the retail centres capture

65% of this expenditure7 then this equates to around $90m to $100m

of overnight tourism expenditure per annum being captured by the

retail centres of Port Macquarie Hastings LGA – mostly the Greater

CBD.

Average spend per day tripper is $109. Assuming the centres capture

60% of this then this amounts to a further $46m captured by Port 6 Regional Tourism Profile 2012/13 7 Some expenditure is captured by motels, tourist attractions, highway convenience centres and other facilities outside the retail centres.



Macquarie-Hastings. This is consistent with earlier advice by HillPDA

based on capture rates from the adjoining LGAs. Hence total spend by

non-Port Macquarie residents and captured by the retail centres of

Port Macquarie amounts to between $136m and $146m per annum.

Demand for Retail Floor Space

Between 5% and 10% of resident expenditure escapes Port Macquarie

mostly in the form of “tourism out” expenditure. Assuming this rate is

maintained and assuming tourism in expenditure increases at half the

rate of resident expenditure then total retail spend captured in the

LGA is forecast as follows.

Table 6 - Forecast Total Expenditure in Hastings ($m)

YEAR 2014 2019 2024 2031 2036

Resident Spend 1,009.8 1,134.4 1,279.3 1,499.3 1,671.0

Less escape expenditure -75.7 -85.1 -95.9 -112.4 -125.3

Tourism and Regional Spend 140 148.6 158.1 171.7 181.6

TOTAL 1,074.1 1,197.9 1,341.5 1,558.6 1,727.2

* HillPDA Forecast .

Expenditure by Retail Store type is forecast as follows:

Table 7 - Expenditure by Retail Store Type ($m)

YEAR 2014 2019 2024 2031 2036

Supermarkets & Grocery Stores 365.3 408.1 463.8 507.4 562.4

Take-away Liquor Stores 78.3 87.5 99.4 108.8 120.5

Specialty Food Stores 40.8 45.6 51.9 56.7 62.9

Fast-Food Stores 51.8 57.9 65.8 72.0 79.8

Restaurants, Hotels and Clubs* 89.5 100.0 113.6 124.3 137.8

Department Stores 71.6 80.0 90.9 99.5 110.3

Apparel Stores 72.0 80.4 91.4 100.0 110.8

Bulky Goods Stores 157.3 175.7 199.7 218.5 242.1

Other Personal & Household Goods 160.1 178.9 203.3 222.4 246.5

Selected Personal Services** 35.2 39.3 44.7 48.9 54.2

Total Retailing 1,122.0 1,253.4 1,424.4 1,558.6 1,727.2

* Excluding hotels, pubs, clubs and bulky goods retailing outside the commercial centres ** Selected Personal Services includes hair and beauty, laundry, clothing hire and alterations, shoe repair, optical dispensing, photo processing and hire of videos

Estimating required floor space is calculated by dividing turnover by

industry benchmark levels. The benchmark turnover levels adopted

were:

Supermarkets and grocery stores $10,000/sqm

Take-away Liquor Stores $11,000/sqm

Specialty Food Stores $10,000/sqm



Fast Food Stores $8,000/sqm

Restaurants, Hotels and Clubs $5,000/sqm

Department Stores $3,500/sqm

Clothing Stores $6,000/sqm

Bulky Goods Stores $3,400/sqm

Other Personal & Household Goods $4,500/sqm

Selected Personal Services $3,000/sqm

These are considered to be industry average turnover levels for non-

metropolitan areas sourced from ABS Retail Survey 1998-99, Urbis

Retail Averages, Shopping Centre News and various consultancy

studies. For the purpose of the forecast we have escalated the target

turnover rates by 0.5% per annum in line with historic trend. Based on

these turnover levels the following forecast of demand for retail floor

space was estimated as follows:

Table 8 - Demand for Retail Floor Space in Port Macquarie Hastings LGA (sqm GLA)

YEAR 2016 2021 2026 2031 2036

Supermarkets & Grocery Stores 35,851 39,063 43,300 46,211 49,950

Take-away Liquor Stores 6,986 7,612 8,438 9,005 9,734

Specialty Food Stores 4,008 4,367 4,841 5,167 5,585

Fast-Food Stores 6,355 6,925 7,676 8,192 8,855

Restaurants, Hotels and Clubs* 17,567 19,141 21,218 22,644 24,476

Department Stores 18,748 20,428 22,644 24,166 26,121

Apparel Stores 12,286 13,387 14,839 15,837 17,118

Bulky Goods Stores 50,063 54,549 60,465 64,530 69,751

Other Personal & Household Goods Retailing

34,921 38,050 42,177 45,013 48,654

Selected Personal Services** 9,874 10,758 11,925 12,727 13,756

Total Retailing 196,659 214,281 237,524 253,491 273,998

* Excluding hotels, pubs, clubs and bulky goods retailing outside the commercial centres.

The above table suggests that with around 118,000sqm there is

currently some undersupply of non-bulky goods retail floor space in

the commercial centres. By 2021 the undersupply will be around

45,000sqm if there were no additions to supply.

Forecast Supply and Demand

For the purpose of the supply and demand modelling we have

assumed the following increases in supply:



Table 9 - Increase in Supply (sqm GLA)

Assumed Year

Centre Status Increase in Floor Space

2021 Port Macquarie (Food for Less site)* Notional 5,000sqm

2021 Thrumster Stage 1 Mooted 5,000sqm

2031 Thrumster Stage 2 Notional 5,000sqm

2026 Expansion of Settlement City** Notional 10,000sqm

2021 St Josephs School Site Stage 1 Approved 6,300sqm

2026 St Josephs School Site Stage 2 Mooted 11,000sqm

2021 Bonny Hills Centre Notional 5,000sqm

TOTAL 52,300sqm * The retail mix, size (sqm) and timing of development is uncertain at the time of reporting. ** Assumes Settlement City will resubmit plans for expansion at some stage over the next 5 to 10 years .

The cumulative supply and demand chart is depicted below:

Figure 1 - Cumulative Supply and Demand for “In-Centres” Retail Floor Space to 2036 sqm GLA)

The chart shows that the above proposals, mooted and notional

expansions can be accommodated without necessarily detrimentally

affecting existing centres or over-supplying the market. In the

previous review there was the potential for some oversupply in the

market. However many of the proposals at that time still have not

commenced and in some cases development consent has lapsed

and/or plans have been abandoned. This includes the expansion of

Settlement City, St Josephs School Site, Thrumster, Bonny Hills and the

former Coles proposal in Wauchope.

There was some expansion in the Port Macquarie Town Centre with

the new Coles and Dan Murphys stores. However the net increase was

not significant given the closure of the former Food for Less building.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

220,000

2016 2021 2026 2031 2036

GLA

(Sq

uar

e M

ete

rs)

DEMAND

SUPPLY



The former Food for Less and adjacent car park (which is Crown Land)

is subject to redevelopment. On the one hand the site could be

developed for a full line Woolworths supermarket however Council

prefers land uses that are more fine grain and address the foreshore.

There is a possibility that the site could be redeveloped by say 2021

which may result in the supply line in the above chart almost reaching

the demand line.

Out-of-Centre Retailing

Bulky goods is defined under The Port Macquarie-Hastings Local

Environmental Plan 2011 as:

“Bulky goods premises means a building or place the principal

purpose of which is the sale, hire or display of bulky goods, being

goods that are of such size or weight as to require:

(a) A large area for handling, display or storage, and

(b) Direct vehicular access to the site of the building or place by

members of the public for the purpose of loading or unloading

such goods into or from their vehicles after purchase or hire,

and including goods such as floor and window supplies, furniture,

household electrical goods, equestrian supplies and swimming

pools, but does not include a building or place used for the sale of

foodstuffs or clothing unless their sale is ancillary to the sale or

hire or display of bulky goods.”

Specifically bulky goods could encompass the following retailing types:

Household goods retailing

Furniture retailing

Floor coverings retailing

Houseware retailing

Manchester and other textile goods retailing

Electrical, electronic and gas appliance retailing

Computer and computer peripheral retailing

Other electrical and electronic goods retailing

Hardware and building supplies retailing

Garden supplies retailing

Table 8 above suggests that the demand for bulky goods by 2021 will

be around 50,000sqm. However from Council survey in September

2013 it is believed that the total supply is around 58,000sqm. A

summary of the results are provided below.



Carpets, Rugs and Floor Coverings 4,450

Furniture and Electrical Appliances 20,700

Hardware, Building and Garden 22,700

Fabrics and Soft Furnishings 4,300

Sports and Camping Goods 6,000

TOTAL (approx.) 58,000

There are several limitations in comparing current supply with demand

which are listed as follows:

Firstly Port Macquarie bulky goods retailers are capturing some

expenditure from outside the LGA. Port Macquarie is the main

centre serving the mid-north coast sub-region and Taree and

Kempsey residents carry out some of their “higher order” and

comparative goods shopping in Port Macquarie. If Port Macquarie

captures 25% of Taree and Kempsey expenditure on bulky goods

then demand increases to just under 60,000sqm in 2021.

Secondly defining bulky goods is problematic. A number of

businesses do more than retail – particularly in the hardware and

home improvement area. This includes wholesale and trade

related business, hiring of equipment and providing contract

services. This is why many businesses such as floor coverings,

tiling, blinds, etc can be difficult to classify. Also many of these

businesses can trade profitably on lower trading levels well below

average.

A large component of the apparent oversupply is in “sports and

camping goods retailers (BCF and Anaconda)”. These stores also

sell apparel and food items. These stores like many others have

become “category killers” selling a wide range of products

(clothing, furniture, foods, etc) within a market segment.

Forecast supply and demand for bulky goods is shown in the figure

below. The demand forecast assumes that Port Macquarie Hastings

captures 25% of expenditure in bulky goods from Kempsey and

Greater Taree households.



Figure 2 - Cumulative Supply and Demand for Bulky Goods Retail Floor Space to 2036 sqm (GLA)

The above chart includes an allowance for a further 15,000sqm of

bulky goods retailing on the B5 site at the corner of Oxley Highway and

John Oxley Drive, which may be completed before 2021 subject to

development consent.

The chart shows a condition of over-supply in 2021 of around

10,000sqm diminishing to zero by 2031.

Long-Term Growth

The widening of the gap between demand and supply post 2026

(excluding bulky goods) would appear concerning. However there is

time to plan for additional space for the longer term (post 2026). The

majority of growth is expected to be west of Port Macquarie, so longer

term growth in the west is sensible. Possible solutions include the

following:

An enlarged Thrumster – say 20,000sqm or more to include a

discount department store or equivalent. It will be important to

ensure that such a centre is not developed too early such that it

undermines the role of the CBD. Moreover, the larger scale mixed

use zone at Thrumster could incorporate a larger scale retail offer

in the longer term assuming Councils opts to amend the planning

controls for that area.

An expansion of Major Innes Road, particularly given the expansion

of population in the area with more than 3,000 additional

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

2016 2021 2026 2031 2036

GLA

(Sq

uar

e M

ete

rs)

BG Demand

BG Supply



residents over the next 20 years and the expansion of Charles Sturt

University with an expected 5,000 students by 2030. Students

have lower spending levels than long term residents but

nevertheless they will generate some demand – probably

equivalent to an additional 2,500 residents.

In the long term a centre of around 10,000sqm will be warranted

in the Lake Innes area.

The other area of significant expansion will be Lake Cathie - Bonny

Hills. However the 5,000sqm proposed for this area will satisfy

demand.

In the long term as the area south of Thrumster to Lake Innes Drive

develops this area will require a commercial centre. If Thrumster

remains a local centre and does not develop into a larger town or

sub-regional centre then this area presents an opportunity for a

larger centre with a trade area that extends to the western

localities of Port Macquarie.

Obviously expansion of the CBD should be encouraged. Whilst

expanding the retail space vertically (above ground) is not feasible

in the current and short-term, it may be prove possible in the

longer term (post 2026). Any expansion of the CBD will reinforce its

role as the major centre – not just for the LGA but for the Mid-

North Coast Region.

Some expansions maybe warranted in Camden Haven and

Wauchope post 2026 given some expected growth. Expansion of

other existing centres is unlikely to be warranted given modest

growth forecast in these areas.

Maintain the retail hierarchy, with the Greater Port Macquarie CBD

serving as the primary regional shopping destination and the

remaining centres operating as secondary centres; and

Local retail centres should be central to the populations that they

intend to serve.



RETAIL STRATEGY 7

Objectives of the Strategy

In order to develop and evaluate a range of options for the planning

and management of retailing in the LGA it is necessary to have a clear

set of objectives. The objectives below are a summary of the existing

objectives in Council’s retail policy that were established in 2010:

Provide quantity, quality and convenience for consumers as well as


experiences;

Provide for further growth in retail and commercial space to meet


growth;

Protect the integrity and viability of existing centres to the extent


Protect the integrity and viability of the Greater Port Macquarie

CBD; and

Protect current employment levels in retailing and hospitality


for further employment.

Further goals for Council to consider include the following:

Provide for adaptability and flexibility overtime to allow for



Include medium to high density inner city housing and shop-top

housing as a key driver of economic viability and growth; and

Reference ‘Key employment industries’ (i.e. the leading industries

in chronological order include; Health and Social Assistance, Retail

Trade, Construction, Accommodation & Food Service and

Education & Training) rather than focussing on retail and

hospitality to provide for flexibility over time.

An important objective of any retail strategy is to achieve the right

level of shop front retail and commercial floor space. An undersupply

of floor space creates the following problems:

It undermines the objective of residents having the widest possible

range of shopping opportunities and commercial services;

It undermines the objective of providing quantity, quality and

convenience for consumers;

It results in longer travel times for shopping and increased car use;



It results in increased congestion, parking difficulties and loss of

convenience; and

It results in more “out-expenditure” escaping the LGA and less “in-

expenditure” from other LGAs.

An oversupply of shop front retail and commercial floor space results

in:

High vacancies, low rents and neglect of retail centres;

A poor performing and unsustainable centre;

Inefficient use of land and other resources; and

An uninviting appearance and ambience with lack of users.

In many cases an oversupply of shop front space occurs as a result of

intense competition in the retail industry with competitors trying to be

first. In high growth areas oversupply is only a short term problem.

However in areas of stagnant population growth, oversupply is an issue

that is more difficult to address.

Notwithstanding the above, retail space is often increased in quantum

leaps due to the sizes of majors or anchor tenants and the need to

include a component of specialty stores to ensure viability of

development.

Given the population growth anticipated within the Port Macquarie-

Hastings region, coupled with the current and future supply of shop

front space, the region is unlikely to experience an oversupply of shop

front space in the short to medium term.

New Centres

New centres are proposed to service Areas 13 (Thrumster) and 14

(Lake Cathie / Bonny Hills). These centres should be contained to a

size of 7,500sqm and 5,000sqm respectively. These centres should be

allowed to develop ahead of their respective population numbers to

ensure delivery of services in advance.

Greater CBD

The next significant expansion of the Greater CBD is likely to be the

expansion of Settlement City or development of the St Joseph school

site. Whilst Settlement City and the school site are part of the Greater

CBD they are some 1.5km from Port Central and the break in continuity

of retail and commercial uses along Buller Street means that very few

people walk between these centres. As a result there is some danger

that Port Macquarie Town Centre will be outperformed by the newer

Settlement City end.



In order to ensure the viability of Port Macquarie Town Centre it is

recommended that any proposals for redevelopment and expansion of

retail space in the Town Centre be supported – particularly proposals

that will introduce new retailers and new formats. This is the case

even if it results in some “oversupply” of retail space throughout the

LGA.

The next likely expansion of the Port Macquarie Town Centre is the old

Food for Less site and adjacent car park. However there are no specific

proposals yet for the site. Currently Woolworths own the site and do

not have a supermarket presence in the town centre. Future

development at the site is uncertain at this point of time.

Out of Centre Retailing

Demand for Bulky Goods

Requirements for a successful bulky goods centre / homemaker centre

or large format retail cluster include the following:

Large land area preferably on the fringe of a major or regional

shopping centre;

Main road frontage or strong visual exposure from a main road

that carries considerable traffic;

Having a large trade area and being located in the middle of, or

near the entry of, the trade area;

Preferably having a trade area that is affluent and/or experiencing

household growth.

Advantages with bulky goods is that they can provide a buffer between

main roads and residential. Furthermore they are low traffic

generators on working days with the majority of their trade being on

weekends.

In the Port Macquarie market the usual form for bulky goods retailing

is low cost single storey construction with outdoor at grade car

parking. Parking under the retail level in a semi-basement car park is

possible but the feasibility becomes questionable in non-metropolitan

areas. Since parking is provided outdoors the FSR is usually less than

0.4:1.

Assuming the site at the corner of Oxley Highway and John Oxley Drive

is developed for bulky goods then supply will be sufficient for short to

mid-term. However by 2026 or 2031 demand for bulky goods in Port

Macquarie will increase at around 1,000sqm (GLA) every year which

translates to a required land area of around 1ha every four to five



years. Around 20,000sqm GLA and 5 to 6 hectares of land is required

over the next 20 years to meet growth in demand.

Notwithstanding that demand increases gradually, supply often steps

up in quantum increases due to the large formats of bulky goods

retailers. A super centre with one or two anchor tenants and 15 to 20

specialties could be say 20,000sqm. A scenario like this would have

strong impacts on existing bulky goods retailers but the impacts on

existing centres would be insignificant. A super centre of this scale

would also attract more expenditure from Kempsey and Greater Taree

which could have some minor positive benefits with day trippers doing

dual shopping in the Port Macquarie CBD.

Furthermore a single retailer such as a large format DIY /hardware

store requires a significant floor area of 10,000sqm to 15,000sqm and

a site area of around 2.5 to 3.5ha. A large proportion of the building is

used for storage of home building supplies and a significant proportion

of trade relates to wholesale trade. This is a model which blurs the

boundary between retailing and industrial use.

An ideal model is a super centre with a hardware house (10,000 to

15,000sqm), a large furniture retailer (3,000sqm) and around 15

specialties including bedding stores, electrical appliances and home

entertainment, outdoor furniture and barbeques, indoor furniture

stores, floor coverings, curtains, kitchens, lighting, tiles, etc. Total floor

area would be around 25,000sqm. The supercentre need not be in

single ownership but it should be in a cluster thereby enabling or

encouraging shoppers to walk, rather than drive, between stores.

Around 6-8ha would be required to accommodate this option.

There are very few, if any, remaining opportunities in Lake Road and

Hastings River Drive for future bulky goods. There are two sites for

future expansion being the B5 zone near Thrumster town centre and

the 4.8 hectares of B5 zoned land on the corner of Oxley Highway and

John Oxley Drive, near Wrights Road. The latter site has considerable

visual exposure from the road and accessibility is very good.

15,000sqm of bulky goods is proposed on this site. These two sites will

satisfy demand for next decade or so, but post 2026 additional land

should be planned for to meet future long term growth.

Around 16 hectares of land on two sites between Oxley Highway and

John Oxley Drive are under investigation. These sites could

accommodate bulky goods however they may come under pressure

from hospital and university related employment uses due to proximity

to these uses and a lack of opportunities elsewhere.



Control of Bulky Goods

The Retail Strategy Review by Leyshon Consulting in 2004 went into

some detail about options for controlling bulky goods retailing in out of

centre locations. The recommendations or suggestions in the review

were made to reduce risk of “inappropriate” out-of-centre retail

development which could result in unacceptable impacts on the

existing centres. To date however there hasn’t been any strong

evidence that the Standard Template definition is failing, or will fail, in

its role to protect the viability of existing centres.

The main reason why out-of-centre bulky goods retailing has not, or

does not, strongly impact the viability of existing centres is because

bulky goods retailing is not prevalent in the existing centres.

Draft Retail Policies

Retail Policy Objectives

The retail policy has been prepared to meet the following objectives:

1. Provide quantity, quality and convenience for consumers as well as


experiences;

2. Provide for further growth in retail and commercial space to meet


growth;

3. Protect the integrity and viability of existing centres to the extent


4. Protect current employment levels in retailing and hospitality


for further employment;

5. Provide for adaptability and flexibility overtime to allow for



6. Include medium to high density inner city housing and shop-top

housing as a key driver of economic viability and growth.

7. To maintain and enhance the present hierarchy of retail centres

throughout the Port Macquarie Hastings Local Government Area.

8. Protect the integrity and viability of the Port Macquarie Town

Centre;

9. To encourage new retail development to occur within the existing

identified Commercial Business Districts of the LGA (Greater Port

Macquarie CBD, Laurieton and Wauchope); and



10. New retail centres to be restricted to Area 13 (Thrumster) and


Retail Centres Policies

The following policy provisions will achieve the above objectives. Most

of these policies relate to short to medium term – say to Year 2026

whilst recognising that there are several options for meeting longer

term growth:

1. Centres Hierarchy

Council should recognise that centres should be allowed to expand but

generally within the total floor areas shown in the following table

unless:

Demand for additional floor space is warranted;

The retail hierarchy is not undermined; and

The viability of other centres is not threatened.

Table 10 - Centres Hierarchy – Floor Space to 2036

Classification Centres Appropriate Size (sqm GLA)*

Greater Port Macquarie CBD Includes Settlement City, Port Central and surrounding retail and Gordon Street

120,000

Town Centres Wauchope 12,000

Laurieton 12,000

Large Villages Lakewood 5,000

Lake Innes 10,000

Lake Cathie 5,000

Lighthouse Plaza 5,000

Bonny Hills (Future Centre) 5,000

Thrumster (Future Centre) 10,000

Small Villages North Haven, Kew, Kendall, Lighthouse Beach, Flynn's Beach, Waniora Parkway, Bonny Hills and Clifton

Various but around 2,000sqm per centre

TOTAL Approx 200,000

* Excludes non-retail shop front space such as real estate agents, medical, travel agents, etc

2. Out of Centre Retailing

Bulky goods retailing outside the defined centres to should be

restricted to Lake Road, Hastings River Drive, Oxley Highway and

Area 13.

Council should prohibit retailing, cafes and restaurants (other than

bulky goods) in the industrial areas unless the predominant or

major proportion of any store’s trade is derived from workers in

the immediate employment zone generally within a 1km radius



and provided that the size of any one store, café or restaurant is

less than 200sqm.

2. Employment

Council should encourage the growth of retail and services in the

Port Macquarie-Hastings CBD and town centres (being Port

Macquarie Greater CBD, Wauchope and Laurieton).

3. Planning

Applications made to create new commercial centres in the Port

Macquarie-Hastings LGA should be rejected except those relating

to new local centres required to service settlement in new urban

areas (Area 13 Thrumster and Area 14 Bonny Hills).

Additional department store, discount department store or other

large format retailer other than supermarkets and bulky goods

greater than 3,000sqm in size should only be located only in the

Greater Port Macquarie CBD.

4. Assessment

Council should ensure rigorous assessment of new retail development

and re-zoning applications by requiring:

Demonstration of a need for the retail services in terms of:

o any identifiable shortfalls in the supply of retail services within

the LGA in general or relevant parts of the LGA in particular; or

o providing a positive net benefit to the community in terms of

retail offer, price competition, convenience, travel cost savings

and all other quantifiable and non-quantifiable costs and

benefits; and

Any development application or planning proposal should include

an assessment of the impact of the proposal on existing and

proposed/approved retail centres.

5. Review

This strategy should be reviewed every five (5) years from the date of

its adoption.



Disclaimer

1. This report is for the confidential use only of the party to whom it is addressed

("Client") for the specific purposes to which it refers and has been based on, and

takes into account, the Client’s specific instructions. It is not intended to be relied

on by any third party who, subject to paragraph 3, must make their own enquiries

in relation to the issues with which this report deals.

2. HillPDA makes no representations as to the appropriateness, accuracy or

completeness of this report for the purpose of any party other than the Client

("Recipient"). HillPDA disclaims all liability to any Recipient for any loss, error or

other consequence which may ari se as a result of the Recipient acting, relying

upon or using the whole or part of this report's contents.

3. This report must not be disclosed to any Recipient or reproduced in whole or in

part, for any purpose not directly connected to the project for which HillPDA was

engaged to prepare the report, without the prior written approval of HillPDA. In

the event that a Recipient wishes to rely upon this report, the Recipient must

inform HillPDA who may, in its sole discretion and on specified terms, provide its

consent.

4. This report and its attached appendices are based on estimates, assumptions and

information provided by the Client or sourced and referenced from external

sources by HillPDA. While we endeavour to check these estimates, assumptions

and information, no warranty is given in relation to their reliability, feasibility,

accuracy or reasonableness. HillPDA presents these estimates and assumptions as

a basis for the Client’s interpretation and analysis. With respect to forecasts,

HillPDA does not present them as results that will actually be achieved. HillPDA

relies upon the interpretation of the Client to judge for itself the likelihood of

whether these projections can be achieved or not.

5. Due care has been taken to prepare the attached financial models from available

information at the time of writing, however no responsibility can be or is

accepted for errors or inaccuracies that may have occurred either with the

programming or the resultant financial projections and their assumptions.

6. This report does not constitute a valuation of any property or interest in

property. In preparing this report HillPDA has relied upon information concerning

the subject property and/or proposed development provided by the Client and

HillPDA has not independently verified this information except where noted in

this report.

7. In relation to any valuation which is undertaken for a Managed Investment

Scheme (as defined by the Managed Investments Act 1998) or for any lender that

is subject to the provisions of the Managed Investments Act, the following clause

applies:

This valuation is prepared on the assumption that the lender or addressee as

referred to in this valuation report (and no other) may rely on the valuation for

mortgage finance purposes and the lender has complied with its own lending

guidelines as well as prudent finance industry lending practices, and has

considered all prudent aspects of credit risk for any potential borrower, including

the borrower’s ability to service and repay any mortgage loan. Further, the

valuation is prepared on the assumption that the lender is providing mortgage

financing at a conservative and prudent loan to value ratio.



ABN 52 003 963 755

Sydney

Level 3, 234 George Street

Sydney NSW 2000

GPO Box 2748 Sydney NSW 2001

t: +61 2 9252 8777

f: +61 2 9252 6077

e: [email protected]

Melbourne

Suite 114, 838 Collins Street

Docklands VIC 3008

t: +61 3 9629 1842

f: +61 3 9629 6315


Brisbane

Level 27 Santos Place, 32 Turbot Street

Brisbane QLD 4000

GPO Box 938 Brisbane QLD 4001

t: +61 7 3181 5644


mailto:[email protected]

Documents

Port Macquarie Hastings Retail Strategy · PDF filePort Macquarie Hastings Retail Strategy Review Ref: C15223 HillPDA Page 6 | 53 retail mix is unknown. This could potentially add