John Henshall and Nick Brisbane, Partner & Director Essential Economics


I spoke with John Henshall and Nick Brisbane about the economic sustainability of new town centres in growth areas.

How does Essential Economics help in the planning and strategic growth of new communities?

Nick: Essential Economics works with many different stakeholders. Our economic modelling has helped the MPA develop precinct structure plans by identifying preferred locations for activity centres in growth areas, floor space and the allocation of land to create employment opportunities and affordable housing provision. We also work with developers and land owners to formulate responses, identify needs and support applications for infrastructure, facilities and community services.

What sort of catchment do you need to support the ‘20 minute neighbourhood?

John: The 20 minute neighbourhood must take into account competition, accessibility and so on; however, it is a sensible plan that coincides with the sort of catchments centres in growth areas are serving. For a full-line supermarket you need a population of about 8,000 to 10,000 people; generally working on 350 square meters of floor space per 1,000 people. These rules form part of the building blocks that help attract investment and support decisions regarding catchment boundaries and how big a town centre might become.

Nick: The 20 minute neighbourhood is desirable, but it’s hard to measure in kilometres. Generally it comes down to the size and distribution of the catchment. Housing may have a catchment of 2 kilometres or 3 kilometres, where a school may actually be attracting people from 10 kilometres away. This means your attracting levels of turnover from beyond your actual residential catchment.

Although each centre is individual in terms of its catchment and geography, we use benchmarks to identify non-retail components which is based on our research from working in established and developing neighbourhood centres.

Non-retail allocations range from 10% of the floor space in typical enclosed shopping centres up to 50% in specific locations where there may be a need for small offices. Typically when planning strip centres in growth areas you should allocate 20% to 30% of the total floor area to non-retailing commercial activity.

What do you consider when planning Community Services and Facilities?

Nick: Usually when it comes to community facilities a social planner will be involved in the team who identifies education services, community housing, libraries and other elements of social infrastructure. I know social planners prefer to locate schools close to major town centres; Caroline Springs is an example where the high school and library are close to the major town centre, meaning you can share recreation space and facilities.

John: With the assistance of your social planner you can start to see what you require; and depending on what your requirements are, helps decide where things go. There might be good reasons to put the school next to the town centre, or there could be good reasons to separate them, so you don’t have a conflict between shoppers and parents picking up and dropping off kids.

Is there a relationship between commercial viability and employment creation?

John: For a small neighbourhood centre, in addition to the retail components, you typically have a medical centre, consulting rooms and maybe a local real estate agent. A larger centre you’re going to have an accountant, tax agent and travel agent etc. An even bigger centre again will start to attract your sub-regional services like Medicare, until you eventually build up to a CBD. This hierarchy is very important in helping determine what level of retail and office floor space will be sustainable and the number of jobs it can support.

Nick: Much of it is market driven; however, the role of planning is to ensure there is the best opportunity for centres to generate employment. Access to a major road or arterial road and high levels of accessibility is really important in capturing passing traffic. From a planner’s point of view, if you’re locating town centres away from these locations then you’re not giving them the best opportunity to generate employment.

Do parks have a positive commercial benefit?

Nick: There’s two aspects I suppose. If you’re looking from a residential point of view, different research suggests around 10 to 15 percent uplift in value if you’ve got a dwelling overlooking a good park. However, if the park has terrible security and lighting then it also has the chance of decreasing the property’s value.

How can you build future flexibility into the masterplanning process?

John: With growth area planning you’re initially planning neighbourhoods and small town centres, while at the same time you must make provision for long term growth. The actual plan must have regard for the hierarchy of surrounding centres and how that centre will grow over the 20 or 30 years. In 20 years’ time the original town centre might be a sub-regional centre so you’ll need to keep some land in reserve for that greater role down the track. That takes a lot of forecasting and it’s got to be practical.

Do community facilities improve the commercial viability of areas?

Nick: There’s no doubt providing community facilities early on is beneficial to the rate and value of sales for residential developers. However, without a catchment it is hard to attract a commercial operator to run those facilities. Some developers are taking it upon themselves to provide a general store, café or medical services which might temporarily be operating from a display home. Once the neighbourhood centre is developed these providers transfer into the town centre and are operated by commercial businesses.

Does ‘walkability’ have a commercial return?

Nick: Walkability is important to town centres because it encourages people to spend more time within the centre. Walkable retail centres have higher rates of incidental spending as opposed to driving retail interactions where there is a smaller chance of incidental spending occurring. The more time people are spending in a centre for whatever reason, there’s more chance of incidental spending. This may be as simple as public seating for people to sit down and rest.

Are there advantages to Mainstreets over the Mall?

John: Philosophically and as a personal view I support the traditional strip centre approach. We recognise the shopping mall or self-contained free standing shopping mall has its advantages, but it’s not an attractive type of development. The strip centre can still be owned by the one entity if you wish to develop it like that. Having a manager who keeps every tenancy occupied and knows exactly what their retail and non-retail mix needs to be is an advantage with the free standing centre or mall.

Nick: Enclosed centres are basically just retail centres, whereas if you’ve got strip-based centres you’ve got an opportunity to integrate a whole lot of other community facilities and uses, like education.

Do you think there is a growing demand for ‘office incubators’ and ‘home offices’ in growth areas?

John: There is a rule of thumb in growth areas that 5% of households are candidates for a home-based business. Perhaps if people moving to the fringes are given the support you might be able to attract them into a shared building where the rents are relatively low and they’ve got access to everything they need. We certainly do not promote out-of-centre development and think Australia has generally done pretty well through planning regulations and zoning to make sure our centres are consolidated.

Nick: I think what we need to be mindful of is we’re planning these areas for the next 30 years. We can be sure that the way we do things now is going to be different in 30 years’ time, so there needs to be that level of flexibility. There might be more opportunities for working at home, even though your base is in the CBD.

If you could change one thing about the way we currently create communities what would it be?

Nick: We would encourage a broad mix of cultures and people with different interests to live in our communities. This will create demand for different housing types, higher densities and a wider mix of uses. There is greater economic sustainability in communities that provide opportunities for people to come together and meet new people.

John: Importantly, coordinate your transport planning with your land use planning, but don’t try and be all things to all people. Naturally, urban planners and transport planners want to have activity centres at transport hubs but it’s very important they are planned carefully so you avoid a complete disconnection where activity is straddled across a dissecting rail line.


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