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January 2015 Martin Street Neighbourhood Activity Centre Function and Performance Report Stage 2 Report Prepared for Bayside City Council By Essential Economics Pty Ltd

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J a n u a r y 2 0 1 5

Martin Street

Neighbourhood Activity Centre

Function and Performance Report

Stage 2 Report

Prepared for

Bayside City Council

By

Essential Economics Pty Ltd

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Authorship

Report stage Author Date Review Date

Draft report Robert Buckmaster 25 August 2013 Sean Stephens 27 August 2013

Stage 1 Final report Robert Buckmaster 14 September 2013 Sean Stephens 14 September 2013

Stage 2 Draft report (incorporating community consultation)

Nick Brisbane 27 January 2015 Sean Stephens 29 January 2015

Disclaimer

Although every effort has been made to ensure the accuracy of the material and the integrity of the analysis presented herein, Essential Economics Pty Ltd accepts no liability for any actions taken on the basis of the contents of this report.

Contact details

For further details please contact Essential Economics Pty Ltd at one of our offices:

96 Pelham Street Carlton Victoria 3053 Australia PH +61 3 9347 5255 FAX +61 3 9347 5355

Level 26 / 44 Market Street Sydney New South Wales 2000 Australia PH +61 2 9089 8654

EMAIL [email protected] WEB www.essentialeconomics.com

ABN 92 079 850 427

Project Number: 13127

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Contents

Introduction ........................................................................................................................ 1

1 Project Background .................................................................................................... 2 1.1 Centre Location and Description ....................................................................................................................... 2 1.2 Policy Context .................................................................................................................................................... 5 1.3 Conclusion ......................................................................................................................................................... 9

2 Martin Street NAC Role and Function ....................................................................... 10 2.1 Overview of the Martin Street NAC ................................................................................................................. 10 2.2 Centre Composition ......................................................................................................................................... 11 2.3 Community Engagement ................................................................................................................................. 12 2.4 Issues and Opportunities ................................................................................................................................. 14 2.5 Role of Centre in Activity Centre Hierarchy ..................................................................................................... 15 2.6 Conclusion ....................................................................................................................................................... 17

3 Economic Analysis .................................................................................................... 18 3.1 Trade Area Definition ...................................................................................................................................... 18 3.2 Socio-Economic Profile .................................................................................................................................... 20 3.3 Population ....................................................................................................................................................... 22 3.4 Retail Spending ................................................................................................................................................ 22 3.5 Competition ..................................................................................................................................................... 24 3.6 Turnover and Market Share ............................................................................................................................. 26 3.7 Forecast Additional Floorspace ....................................................................................................................... 27 3.8 Gaps Analysis and Centre Development Opportunities................................................................................... 28

4 Recommendations for Objectives and Actions .......................................................... 30

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I N T R O D U C T I O N

Background

Bayside City Council (‘Council’) commissioned Essential Economics Pty Ltd to analyse the function and performance of the Martin Street Neighbourhood Activity Centre (‘Martin Street NAC’/’the Centre’) and to make recommendations on its future over the next 20 years.

Martin Street NAC is a major retail and services strip located in the northern part of Brighton. The Centre extends eastwards along Martin Street for approximately 300 metres from Hamilton Street to Nepean Highway and encompassing Gardenvale Railway Station, with some limited development on Asling and Spink Streets.

The work is intended to assist Council in developing policies and actions to maximise the future economic performance of the Martin Street NAC Structure Plan, currently being prepared by Council.

The results of community consultation undertaken by Council (‘Martin Street (Brighton) Neighbourhood Activity Centre Structure Plan – First and Second Round Community Engagement’, January, 2015) with regard to the Martin Street NAC Structure Plan during 2014 and 2015 are incorporated in this report.

Objectives

The analysis is intended to assist Council in developing policies and actions to maximise the future economic performance of the Martin Street NAC Structure Plan, currently being prepared by Council. The analysis is to be informed by input from community consultation (which is proposed to be undertaken by Council) and to provide recommendations as to the most viable future function and means to improve its economic performance over the next two decades.

This Report

This report contains the following Chapters:

1 Project background

2 Martin Street NAC Role and Function

3 Economic analysis

4 Recommendations for Objectives and Actions

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1 P R OJ EC T B A C KG R O U N D

This Chapter provides background to the project, including a description of the Martin Street NAC’s locational and strategic policy context.

1.1 Centre Location and Description

Martin Street NAC is located at the intersection of Martin Street and Nepean Highway in Brighton, approximately 200 metres north of the highway’s intersection with North Road. The centre’s location is shown in Figure 1.1.

The centre is the northern-most retail centre in the City of Bayside and is viewed by the community as a “friendly local convenient centre”. It is a compact retail and services cluster comprising businesses along both sides of Martin Street, and extending eastward from Hamilton Street to Nepean Highway in Brighton. The centre also has some limited retail frontage to the service road flanking the western side of Nepean Highway.

Nepean Highway is a major multi-lane arterial road connecting Melbourne’s southern suburbs to the CBD. Retailers fronting Nepean Highway include a post office, 7-Eleven convenience store, pharmacy and TAB. With the exception of Nepean Highway, which has attracted highway-oriented commercial uses, surrounding development is predominantly low-rise period dwellings flanking quiet, tree-lined residential streets.

Above: Martin Street shops, including a Foodworks small format supermarket serving a local catchment. The rail overpass for the Sandringham railway line is in background. Below: 7-Eleven and highway-oriented uses fronting the west side of Nepean Highway, serving passing traffic.

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Figure 1.1 Martin Street Neighbourhood Activity Centre Location Map

Source: Melway

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Strip retail development continues for a further 200 metres east of Nepean Highway, along Gardenvale Road (a continuation of Martin Street), in the City of Glen Eira.

This Glen Eira component, which falls outside the scope of this report, comprises a mix of shop-front office/medical uses, including insurance brokers, a chiropractor and physiotherapist. Retail uses are limited in this Glen Eira component and include a restaurant, bicycle shop, hair salon, carpet store and pharmacy. A former dry cleaning business at the intersection of Nepean Highway and Gardenvale Road is presently vacant.

Above: Aerial view of Martin Street NAC. Low intensity retail and commercial development continues along Gardenvale Road east of Nepean Highway.

Above: Highway-oriented retail on the eastern (Glen Eira) side of Nepean Highway

Martin Street is a tree-lined local service road with a single traffic lane in either direction flanked by on-street parking. Wide pavements and a cluster of cafes, bakeries and patisseries have given rise to a vibrant al fresco street dining presence clustered around the railway

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station, which forms the retail core of the precinct. Intensity of activity diminishes westward, past Asling Street.

The centre includes a Foodworks small-format supermarket situated immediately west of the railway line. Cafes and specialist food retailers are also among the major attractors. The centre is well-served by public transport: Gardenvale Station on the Sandringham railway line is centrally located within the centre immediately north of Martin Street, and the 630 bus route runs along Martin Street, connecting Gardenvale to Elwood and Monash University.

The centre is visited often by surrounding residents, with a survey undertaken as part of the Structure Plan indicating that 72% survey respondents visit the centre daily or ‘a few times a week’. Almost two-thirds (74%) of respondents walked to the centre, while 55% drove (respondents were allowed multiple responses).

A mixed-use development comprising eight commercial/retail tenancies on the ground floor with apartment above is currently being constructed on the south-west corner of Martin and Asling Streets.

1.2 Policy Context

Land use and development in the Martin Street NAC is regulated and/or influenced by the following documents:

Bayside Planning Scheme

Bayside Planning Scheme Review (September 2011)

Bayside Housing Strategy September 2012

Martin Street Outline Development Plan, and

New zoning provisions.

Bayside Planning Scheme

The Bayside Planning Scheme, introduced in 2000, regulates development and land use in the City of Bayside and articulates a preferred development vision for the municipality.

The Scheme identifies Martin Street as one of four large Neighbourhood Activity Centres in the Bayside municipality. The Scheme supports the economic and social sustainability of activity centres (clause 21.07), while maintaining their ‘village feel’. It encourages their role and viability to be strengthened by residential development.

Zoning

Prior to the recent changes to Victoria’s planning zones, which came into effect on 1 July 2013, land in the Martin Street activity centre was zoned Business 1 (‘B1Z’) around the retail core, and Business 2 (‘B2Z’) towards the periphery of the centre (north and south of the Martin Street strip and west of Asling Street), as shown in Figure 1.2. The former zoning influenced

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and reflected the differential intensity of land use in the centre, with B1Z land accommodating the main retail activity and the B2Z accommodating non-retail or uses such as office suites, professional and trade services and residential uses.

Business 1 and Business 2 zones, together with Business 5, have been subsumed into a new Commercial 1 zone. The new Commercial 1 zone is intended:

To create vibrant mixed use commercial centres for retail, office, business, entertainment and community uses; [and]

To provide for residential uses at densities complementary to the role and scale of the commercial centre. (Clause 34.01 of the Bayside Planning Scheme).

As-of-right uses in this zone include:

Accommodation (other than prisons and subject to ground level frontage of no more than two metres),

Child care centres

Cinemas and cinema-based entertainment

Education centre

Exhibition centre

Home occupation

Informal outdoor recreation

Offices

Places of worship subject to a gross floor area of no more than 250 m2

Shops and Retail premises (Clause 34.01-1).

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Figure 1.2: Zoning Settings for Martin Street NAC

Source: Bayside Planning Scheme

Design Vision

Clause 21.11-7 of the Scheme sets out a vision “To create a vibrant shopping centre which recognises and builds on the character and streetscape features of the centre”.

Objectives include:

Maintaining the Edwardian design theme and exotic street trees

Promoting attractive, well designed development

Encouraging urban design improvements which offer variety, interest and convenience to shoppers.

Office, peripheral sales and other showroom uses are to be encouraged between Spinks Street and Nepean Highway.

Offices are to be encouraged along Nepean Highway, south of Martin Street at first floor level, within an eight metre height limit.

Strategic Intent

The Scheme intends that new medium-density housing be directed to Activity Centres, particularly those – like Martin Street – with good access to public transport routes (clause

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21.03). Increased housing densities and diversity of dwellings are to be delivered in activity centres by adding to or replacing single level buildings with new multi-storey buildings and the redevelopment of larger sites.

A retail core is to be retained and strengthened in activity centres and high quality commercial, residential and mixed use development is to be facilitated adjacent to the core.

Major retail developments serving a wider catchment are to be accommodated in the retail core of Major Activity Centres. Bayside’s Major Activity Centres include Bay Street, Church Street, Hampton Street and Sandringham.

Bayside Planning Scheme Review

The Bayside Planning Scheme Review was prepared by Bayside City Council in September 2011 to satisfy Council’s statutory obligation to review its planning scheme.

Martin Street Outline Development Plan

The Martin Street Outline Development Plan is a legacy document that predates the formation of the City of Bayside. The Plan recommends the maintenance of the Edwardian design theme for the centre, including paving, exotic street trees and street furniture elements and restriction on signage to minimise visual clutter.

Bayside Housing Strategy

The Bayside Housing Strategy guides the way in which residential development in Bayside is to be planned and managed over the next 20 years. It sets out a framework for Bayside to accommodate the projected household numbers set out in the State Government’s Victoria in Future 2012.

The Bayside Housing Strategy intends that future medium and high-density residential development will be directed to identified housing growth areas, which include the various activity centres and other strategic redevelopment sites. It further intends that the remainder of the established residential areas in the municipality experience minimal housing change and maintain their low-density residential character.

Martin Street, Brighton, together with Highett, Beaumaris Concourse and Black Rock, is identified in the Bayside Housing Strategy as a Large Neighbourhood Activity Centre. Under the strategy, such centres are earmarked for moderate residential growth and intended to assist in accommodating medium-density development. The Martin Street locality for ‘moderate’ residential development is highlighted in Figure 1.3.

Based on an average site coverage of 60%, the Strategy projects the NAC’s existing stock of dwellings to increase from 14 to 62 units by 2031, a net increase of 48 units, achieved by shop (and office) top housing.

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Figure 1.3: Martin Street, Brighton Strategic Framework Planning Area

Source: Bayside Housing Strategy

1.3 Conclusion

Martin Street NAC is a retail and commercial strip located at the intersection of Martin Street and Nepean Highway, Brighton.

Land in the centre is zoned Commercial 1, which provides for a wide range of commercial uses including retail, office, child care and accommodation.

The centre is identified in the Bayside Planning Scheme as one of Bayside’s four large Neighbourhood Activity Centres. As such, it is intended to accommodate new medium-density housing above ground-level retail and commercial uses. Planning strategy and controls intend that the centre remain a vibrant retail and commercial centre, while retaining its traditional Edwardian scale and design theme.

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2 M A R T I N ST R E E T N A C R O L E A N D F U N C T I O N

This Chapter describes the role and function of the Martin Street NAC, taking into account a summary of the results of a floorspace survey undertaken in the centre in July 2013 and community consultation.

2.1 Overview of the Martin Street NAC

Despite its relatively small size, the Martin Street NAC serves a number of important functions for the community. These can generally be described as follows:

Convenience and Top-Up Shopping

Martin Street contains a number of traders, most notably the small Foodworks supermarket, that provide convenience and top-up shopping facilities to residents of the surrounding area and other visitors, including commuters using the adjacent Gardenvale station. Customers visit the centre frequently, although tend to make smaller purchases compared to other neighbourhood centres anchored by major supermarkets.

Passing Trade

Due to the exposure to the busy Nepean Highway at the eastern end of the centre, the Martin Street NAC has a role in providing convenience goods and services to passing trade. Accessibility to Martin Street for this passing trade is assisted through the provision of traffic lights. Furthermore, at-grade car parking is provided directly outside the strip of shops fronting the Nepean Highway and this provision allows for safe, quick-stop shopping trips to be made by passing traffic.

Café and Specialised Retail

Martin Street provides a small number of high quality cafes and specialist retailers, including traders selling sporting memorabilia and collectibles, as well as a café specialising in food for people with allergies. These traders give the Martin Street centre a greater sense of ‘destination’ for people living beyond the immediate surrounds of the centre but who visit the centre for these particular features.

The community has expressed a “preference for the retention of small scale niche shops and businesses” (‘Martin Street (Brighton) Neighbourhood Activity Centre Structure Plan – First and Second Round Community Engagement’, January, 2015).

Non-Retail and Professional Services

Also notable in the Martin Street NAC is the presence of non-retail uses, including a small dedicated office building in Spink Street and various professional services located in shopfront tenancies. The western end of the centre has a particularly strong provision of non-retail uses. These non-retail uses attract workers to the centre on a daily basis, who in turn support local traders in the centre.

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Business Mix

Martin Street is one of the smallest centres covered by the Bayside Business Monitor regularly undertaken by Council, and is the most ‘compact’ in geographic terms at approximately 300 metres in length.

According to the most recent Monitor (Street Ryan, May 2012), the centre contains a total of 82 businesses. This compares with 191 businesses identified at the nearby Bay Street centre.

Between 2006 and 2012, the Bayside Business Monitor has identified strong growth in the number of health care and social assistance-related businesses, as well as personal service businesses in the Martin Street NAC.

Approximately 40% of Martin Street’s shop-fronts were occupied by what the Business Monitor defines as “Core Retail” uses (apparel, food retailing, general retail and personal services). This compares with approximately 50% of business shop fronts occupied by Core Retail uses across the nine centres covered by the Business Monitor.

2.2 Centre Composition

Estimates of retail provision in the Martin Street NAC presented in this report are based on a floorspace survey undertaken by Essential Economics in July 2013.

Analysis of retail floorspace, as opposed to the number of tenancies counted in the Bayside Business Monitor, is required in order to generate an accurate understanding of the total retail sales and market share of available spending generated by the Martin Street NAC.

A summary of the floorspace data is shown in Table 2.1.

The retail categories defined for the floorspace survey are:

Food, Liquor and Groceries (FLG): supermarkets, fresh food, groceries and take-home liquor

Food Catering: takeaway food, cafés and restaurants

Non-Food: apparel, home wares, bulky merchandise and general merchandise

Services: dry cleaners, hairdressers and other service-oriented shopfront retailing.

At present, the Martin Street NAC has an estimated total provision of approximately 14,010m2 of floorspace, with 6,200m2 or 44% occupied by retail tenants.

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Table 2.1: Floorspace by Use, Martin Street Neighbourhood Activity Centre (Ground Floor), 2013

Category Floorspace No. of

Premises Share of

Floorspace Share of Premises

Food, Liquor & Groceries 1,140m2 8 8% 9%

Food Catering 1,460m2 10 10% 11%

Non-Food 2,160m2 11 15% 12%

Services 1,440m2 15 10% 16%

Total Retail 6,200m2 44 44% 48%

Non-Retail 7,590m2 45 54% 49%

Vacant 220m2 3 2% 3%

Total Floorspace 14,010m2 92 100% 100%

Sources: Essential Economics Pty Ltd; Bayside City Council rate base

Approximately two-thirds (65%) of the retail floorspace is in FLG, Food catering, and Services, and this total is typical for a small NAC.

However, in general terms the share of retail floorspace at the Martin Street NAC at 44% of total floorspace is relatively low for a centre of this type, and reflects the strong provision of both dedicated office space and a wide range of medical and professional services occupying shopfront tenancies. These non-retail uses account for 54% of floorspace in the centre.

Vacant floorspace is estimated to be just 220m2 or 2% of total floorspace. This is well below the typical vacancy rate achieved by a strongly-performing strip-based retail centre of between 4% and 6%. On this basis, the Martin Street NAC can be described as virtually ‘fully-tenanted’.

Note, since the floorspace survey was undertaken, the construction of a mixed-use development on the south-west corner of Martin and Asling Streets has commenced. This development, known as ‘Verdis’ will include eight commercial tenancies, including a restaurant, two shops and five office tenancies.

2.3 Community Engagement

Community Engagement Process

Bayside City Council have undertaken two rounds of community consultation as part of the preparation of the Martin Street NAC Structure Plan. Community engagement comprised the following:

First Round Community Engagement (November 2013-January 2014)

Distribution of brochures to approximately 2,500 properties which included a survey.

Establishment of an online discussion forum

Informal discussions with Martin Street traders and commuters at Garden vale Station.

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In total, 203 written comments were received during the first round of community engagement.

Second Round Community Engagement (November 2014-January 2015)

Two community ‘drop-in’ sessions where held, with Council’s strategic planners available to answer questions and have informal discussions regarding the Structure Plan.

Distribution of brochures to approximately 2,500 properties which included an invitation to attend the ‘drop-in’ sessions and a community workshop. The brochures also provided an opportunity to lodge feedback on the Structure Plan.

Establishment of Council’s Have Your Say website which provided information about the project and provided an opportunity for community engagement via an online forum. A total of 283 unique visitors visited the page, with 6 visitors actively contributing to the discussion.

One community workshop was held of which approximately 20 people attended, who provided valuable and detailed feedback for the Structure Plan.

Bayside City Council prepared the document titled ‘Martin Street (Brighton) Neighbourhood Activity Centre Structure Plan – First and Second Round Community Engagement’ (January, 2015) which summarises the finding of the community engagement process.

Relevant Findings of Community Engagement

The following identifies a number of the issues, opportunities and themes most relevant to this Function and Performance Report:

Martin Street NAC is viewed as a ‘community friendly convenient local centre’.

There is a preference to retain the centre’s friend, small scale, village atmosphere, which is valued by the surrounding community.

A perception exists that parts of the centre are visually unattractive, with many comments relating to the railway bridge and the Elsternwick Creek Canal.

Opportunities exist for landmark developments at the entrance to the centre with frontage to Nepean Highway.

Maintaining and encouraging mixed-use development is supported, with a preference for ground-floor retailing.

People enjoy the convenience and speciality shops offer at the centre and would like this small business focus to be retained.

It is important to maintain the heritage values and mix of buildings; any new development should respond sympathetically to the neighbourhood character.

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2.4 Issues and Opportunities

On the basis of the floorspace survey and the consultant’s understanding of the Martin Street NAC which has been informed by Council’s community engagement findings, the following issues and opportunities have been identified that will require an appropriate response in the Structure Plan.

Issues

1. Lack of a Major Anchor Tenant

Martin Street NAC lacks a major retail ‘anchor’ tenant such as a full-line supermarket that would contribute significantly to the centre’s drawing power and provide a consistent level of customer activity throughout the day. The Foodworks Brighton store located immediately west of the railway line serves as a convenience supermarket only, and local residents will regularly travel to other nearby centres such as Church Street and Elsternwick in order to access major supermarket facilities. A full-line Coles supermarket has recently been construction in Bay Street, Brighton just 1km south of the Martin Street NAC.

2. Physical Constraints

The Martin Street NAC is located in a highly established urban area that effectively limits re-development opportunities in the centre – including potential increases in retail and commercial floorspace. Apart from the site to the south of Martin Street and west of Asling Street where construction of a mixed-use development is currently occurring, no other obvious re-development opportunities exist within the centre. However, the community has identified an opportunity for ‘landmark’ developments at the at the entrance to the Martin Street NAC and with frontage to Nepean Highway. Many of these properties in this locality are fragmented and it is likely consolidation of a number of properties may be required in order to facilitate any major redevelopment.

3. Nepean Highway

The Nepean Highway provides strong exposure to traders at the eastern end of the centre, in particular the strip of shops benefiting directly from highway frontage. However, the Highway is also a major physical, and perceived, barrier that limits the accessibility for residents living to the north and east due to the need to cross eight lanes of traffic to reach the centre. This is the case for those travelling by car, bicycle or on foot.

4. Variable Quality of Shopfronts

The Martin Street centre is generally characterised by a high quality built-form. However, in some notable instances the quality of shopfronts and the general presentation of the centre are not ideal. The variability between the quality of shopfronts and streetscape means that the centre lacks a consistent ‘look and feel’ or ‘sense of place’ as a customer moves along the strip.

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Opportunities

5. Strong Café and Specialised Food Offer

Martin Street has a strong café and specialist food offer that appears well-patronised. The café strip ambience is complemented by the tree-lined streets, wide pavements, low-rise Edwardian architecture and limited through traffic.

6. Accessibility

The centre benefits from the trade generated by a regular flow of rail patrons accessing the Gardenvale railway station that is centrally located within the strip. Accessibility to residential areas to the west and south of the centre is also strong. However, the Nepean Highway to the east is a physical and perceived barrier to movement from the east and north. The 630 bus route linking Elwood and Monash University also passes through the centre.

7 Niche Retailing

The centre has an advantage in the number of traders operating in particular market niches that are usually not present at other similar centres. Examples include the allergy-free restaurant, collectibles shops and specialty patisserie. The presence of these niche traders means that the centre can attract customers from a broader geographic area than would otherwise be the case. This has a positive influence on the trading levels of the more traditional retailers in the centre.

8 Diverse Business Base

Martin Street NAC has a significantly more diverse range of traders than most centres of its size. This reflects the fact that the centre is used by a range of different customer types as earlier described, and means that the centre is able to achieve and maintain a very high occupancy rate, despite the lack of a major retail anchor (such as a major supermarket).

2.5 Role of Centre in Activity Centre Hierarchy

State Government Activity Centre Hierarchy

Although now replaced by Plan Melbourne as the document guiding the future planning of metropolitan Melbourne, Melbourne 2030 established a useful hierarchy of activity centres which assists in defining the different roles of different centres. The hierarchy established in Melbourne 2030 included the Central Activities District (Melbourne CBD), Principal Activity Centres, Major Activity Centres, Specialised Activity Centres and Neighbourhood Activity Centres.

Four Major Activity Centres were identified within the City of Bayside; namely Church Street (Brighton), Bay Street (Brighton), Hampton and Sandringham. These centres are intended to remain a major focus for retail, employment, and a wide range of recreation and community facilities.

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In Melbourne 2030, Neighbourhood Activity Centres such as the Martin Street centre provide an important community focal point. Generally comprising less than 10,000 m2 of retail floor space, they are dominated by small businesses and shops and a limited mix of uses meeting local convenience needs. Higher-density housing is to be encouraged in and around Neighbourhood Activity Centres.

Plan Melbourne described a similar activity centre hierarchy which is summarised below:

Expanded Central City, in the Melbourne CBD

Metropolitan Activity Centres, comprising major suburban centres including Ringwood, Dandenong, Frankston, etc

Activity Centres, comprising all the former Major and Principle Activity Centres. Under Plan Melbourne, Church Street (Brighton), Bay Street (Brighton), Hampton and Sandringham are classified as Activity Centres.

Neighbourhood Centres, which are designated by local government and which will include Martin Street (refer below).

City of Bayside

Clause 21.03-1 of the Bayside Planning Scheme names Martin Street NAC as one of four Large Neighbourhood Activity Centres in Bayside, the other three being part of Highett, Beaumaris Concourse and Black Rock. The presence of “numerous” small Neighbourhood Activity Centres is also identified in the Planning Scheme.

The Bayside Housing Strategy (September 2012) differentiated between Large and Small Neighbourhood Activity Centres. Martin Street NAC, together with Highett, Beaumaris Concourse and Black Rock are identified in the Housing Strategy as Large Neighbourhood Activity Centres.

Small Neighbourhood Activity Centres are identified as small centres with limited retailing that provide a local convenience role to their immediate area. Centres within this category contained either a small supermarket or milk bar and a small number of other retail premises. These centres are identified as locations where additional small scale residential development can be accommodated, in the form of shop-top housing that respects the local built form context.

Implications for Martin Street

The current function and operation of the Martin Street NAC, as described in Section 2.1 is in general terms consistent with the designation of a Small Neighbourhood Activity Centre in that the emphasis of the centre is on local top-up, convenience retailing. Nonetheless, the Martin Street NAC is generally larger than the Small Neighbourhood Activity Centres identified in the Housing Strategy, and contains a relatively wide range of traders and land uses (including office and non-retail uses).

It may be appropriate for Council and the Structure Plan to consider re-classifying the Martin Street centre to a Small Neighbourhood Activity Centre status given the focus of the centre on

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top-up, convenience shopping and the strong physical constraints limiting development opportunities. Alternatively, the Large Neighbourhood Activity Centre classification could be retained, with explicit recognition of the practical differences in functional role and development outlook between Martin Street and the other identified Large Neighbourhood Activity Centres.

2.6 Conclusion

Martin Street is a popular neighbourhood activity centre with a tenant mix that successfully blends retail and non-retail activities such that the floorspace vacancy rate is a significantly low 2%.

The centre has a number of issues which may be appropriately addressed through the forthcoming Structure Planning process. These issues are associated with the lack of a major anchor tenant (which limits the centre’s drawing power), physical constraints that limit re-development opportunities, the lack of a consistent ‘sense of place’ throughout the centre due to variability in the quality of shopfronts, and the ‘barrier to movement’ created by the 8-lane Nepean Highway at the eastern end of the centre.

However, the centre has a number of positive attributes which include its particular retail niches (such as al fresco cafes and the specialist food offer), good accessibility within the centre, including railway station access, and the diverse business mix which extends beyond the essentials of day-to-day convenience retailing.

It is appropriate for Council (and the Structure Planning process) to re-consider the classification of Martin Street as a Large Neighbourhood Activity Centre. In functional terms, the centre has a primary focus on destination and top-up convenience retailing for both local residents and visitors, and has significant physical constraints to future development relative to the other Large Neighbourhood centres identified by Council policy. However, Martin Street is generally larger and contains a greater diversity of uses than the Small Neighbourhood Activity Centres identified in the Bayside Housing Strategy.

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3 E C O N O M I C A N A LYS I S

This Chapter defines the trade area served by the Martin Street NAC, assesses current and forecast market shares, and provides an assessment of the potential for future retail and commercial floorspace development.

3.1 Trade Area Definition

In essence, the trade area describes the geographic area within which a centre (Martin Street NAC in this case) is an important destination for people wishing to visit the type of retail and other facilities offered by that centre. Typically, around 70% to 90% of retail turnover at an activity centre (such as Martin Street NAC) is derived from residents of the main trade area (MTA), with the balance in trade coming from people living beyond this area.

The consultant has defined a trade area for the Martin Street NAC having regarded to:

the range and type of retail offer represented in the centre, noting its lack of a major supermarket anchor

the size and composition of nearby centres, including Bay and Church Streets, Brighton and other competing centres including Glenhuntly Road, Elsternwick

physical barriers to movement, such as main roads and Port Phillip Bay.

The trade area, shown in Figure 3.1, is generally contained within a 1.5 kilometre radius of the centre.

Boundaries of the trade area are as follows:

To the North: Head Street and Glenhuntly Road

To the East: Elizabeth Street, Hawthorn and Kooyong Roads

To the South: Bay Street

To the West: Port Phillip Bay and St Kilda Street

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Figure 3.1: Martin Street NAC Trade Area and Competing Centres

Source: Essential Economics with MapInfo and StreetPro

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3.2 Socio -Economic Profile

Table 3.1 presents a comparative socio-economic profile of residents in the MTA for the Martin Street NAC against that of the wider Melbourne metropolitan area, based on the 2011 Population and Housing Census. Relevant features include the following:

The MTA is comparatively affluent, with median individual and household incomes substantially higher than the metropolitan median, and a substantially higher proportion of individuals earning in excess of $1,000 per week.

The occupational profile of the resident population is characterised by a comparatively strong representation of managers and professionals.

The MTA has a comparatively mature age profile, with a median age of 40 years compared with the metropolitan median of 36 years, and higher proportions of the population in all age groups 35 years and over.

The area has proportionally more Australian-born residents and a higher proportion of overseas-born originating from major English-speaking countries than the wider metropolitan area.

Consistent with its inner-middle suburban location and mature settlement pattern, a higher proportion of households reside in semi-detached dwellings, units or apartments than the metropolitan mean.

A higher proportion of households own their homes outright but the proportion of renters is in-line with the metropolitan mean. Median monthly mortgage costs are 37% higher.

The resident population is comparatively mobile, with a higher proportion of households possessing two or more vehicles compared with the metropolitan average. Consequently, residents in the MTA have less reliance on public transport than indicated by the metropolitan average. Just 7.9% of MTA households did not possess a car.

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Table 3.1: Comparative Socio-economic profile

Category Martin St NAC MTA

Greater Melbourne

Income Median individual income (annual) $42,270 $30,810 Variation from Greater Melbourne median 37.2% 0.0% % of persons (15 years or older) earning $1,000pw or more 43.1% 29.2%

Age Structure 0-4 years 6.4% 6.5% 5-19 years 18.3% 18.3% 20-34 years 16.5% 22.9% 35-64 years 43.2% 39.1% 65-84 years 12.8% 11.3% 85 years and over 2.9% 1.8% Median Age (years) 40 36

Country of Birth Australia 72.4% 66.8% Other Major English Speaking Countries 10.8% 7.6% Other Overseas Born 16.8% 25.6% % speak English only at home 82.5% 69.5%

Dwelling Structure (Occupied Private Dwellings) Separate house 58.1% 72.7% Semi-detached, row or terrace house, townhouse etc. 17.2% 11.6% Flat, unit or apartment 24.2% 15.3% Other dwelling 0.4% 0.4%

Average household size 2.5 2.6

Tenure Type (Occupied Private Dwellings) Owned outright 39.5% 33.5% Owned with a mortgage 31.7% 37.7% Rented 28.0% 28.0% Other tenure type 0.9% 0.8%

Housing Costs Median monthly mortgage repayment $2,530 $1,840 Variation from Greater Melbourne median 37.5% 0.0% Median mortgage as a share of median household income 31.3% 31.8% Median weekly rents $380 $310 Variation from Greater Melbourne median 22.6% 0.0%

Share of occupied dwellings connected to the internet 87.4% 82.0%

Car Ownership per Dwelling None 7.9% 9.4% One 36.9% 36.1% Two 41.2% 38.0% Three of more 14.1% 16.5%

Occupation Managers & professionals 58.3% 37.4% Clerical & sales workers 30.7% 34.7% Technicians & trades workers 7.2% 13.7% Machinery operators & drivers 1.0% 6.0% Labourers & related workers 2.8% 8.1%

Source: Australian Bureau of Statistics 2011 Census

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3.3 Population

In 2013, the MTA has an estimated resident population of 18,740 persons.

The population of the MTA has increased by an estimated 130 residents annually over the last two years at a modest annual growth rate of 0.7%. This is slightly below half the metropolitan growth rate of 1.6% per annum for the same period and reflects the relatively established settlement pattern in the MTA.

Population growth in the MTA is dependent on isolated infill residential opportunities or the creation of more intensive housing development on existing residential sites. Some limited examples of ‘shop-top’ housing are apparent in the Martin Street NAC and this will make a limited contribution to future population growth in the MTA.

Population projections prepared by the Victorian Government (Victoria in Future, 2012) forecast a total increase of 570 new residents in the MTA over the next five years, or an average annual growth rate of 0.6%. Beyond 2018, more modest rates of population growth of 0.4% per annum are expected over the remaining period to 2031.

Overall, population growth in the MTA is forecast to be below the growth rate forecast for metropolitan Melbourne over the forecast period to 2031.

In total, the MTA is forecast to have an additional 980 new residents (net) over the decade to 2023 (a total increase of 5.2%) and 1,690 new residents (a total increase of 9.0%) over the eighteen years to 2031.

Table 3.2: Historic and Forecast Main Trade Area Population Growth, 2011 to 2031

2011 2013 2018 2023 2031

Population (No.)

Main Trade Area 18,480 18,740 19,310 19,720 20,430

Average Annual Growth (No.)

Main Trade Area 130 110 80 90

Average Annual Growth (%)

Main Trade Area 0.7% 0.6% 0.4% 0.4%

Metro Melbourne 1.6% 1.5% 1.3% 1.2%

Source: Essential Economics Pty Ltd, Australian Bureau of Statistics, Victoria in Future 2012

3.4 Retail Spending

Estimates of per capita retail spending by MTA residents are based on the “MarketInfo” micro-simulation model; this model – which uses data from the ABS Household Expenditure Survey, ABS Population and Housing Census and a range of other socio-economic indicators – provides estimates of retail spending on a small area basis.

As shown in Table 3.3, per capita retail spending by MTA residents is approximately 19% above the Melbourne average.

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This is a reflection of the relatively high socio-economic profile of the MTA compared with the metropolitan average. For example, spending on Food, Liquor and Groceries is generally relatively stable across the metropolitan area, while higher income is reflected in relatively higher ‘discretionary’ spending on categories such as Food Catering.

On this basis, per capita retail spending in the MTA of $16,270 reflects a relatively strong level of retail spending by residents and this will be reflected in the sales being achieved by retailers in the Martin Street NAC.

Table 3.3 MTA Per Capita Retail Spending, 2013 ($2013)

Expenditure Category Main Trade Area Metro Melbourne MTA Variance

Food, Groceries & Liquor $5,750 $5,380 +6.9%

Food Catering $2,530 $1,870 +35.3%

Non-Food $7,240 $5,900 +22.7%

Services $750 $540 +38.9%

Total Retail $16,270 $13,690 +18.8%

Sources: Marketinfo; Essential Economics Pty Ltd

Total retail spending by MTA residents in 2013 is estimated at approximately $305.0 million, and this figure is forecast to increase to approximately $428.5 million by 2031 as a result of growth in population and real spending (and expressed in constant 2013 prices).

Table 3.4 summarises this situation, taking into account the population estimates and forecasts prepared in Table 3.2 and the per capita retail spending estimates in Table 3.3, and with allowance for real growth in per capita spending of 1.2% per annum which reflects the long-term historical average in Australia.

Table 3.4 MTA Retail Spending by Category, 2013 to 2031 ($2013m)

Expenditure Category 2013 2018 2023 2031 Average Annual

Increase 2013 to 2031

Food, Groceries & Liquor $107.8m $113.8m $119.2m $128.5m +1.0% pa

Food Catering $47.5m $52.0m $56.5m $64.7m +1.0% pa

Non-Food $135.7m $154.1m $174.3m $212.8m +1.8% pa

Services $14.0m $15.9m $18.1m $22.5m +1.8% pa

Total Retail ($m) $305.0m $335.9m $368.2m $428.5m +1.9% pa

Sources: Marketinfo; Essential Economics Pty Ltd

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3.5 Competition

The Martin Street NAC is located in a highly competitive retail market, with two significantly larger centres located within 1.5km, namely:

Bay Street Brighton, and

Elsternwick.

A number of other centres also attract regular patronage from residents of the MTA served by the Martin Street NAC.

Bay Street Brighton

The Bay Street Brighton centre is located approximately 1km south of Martin Street.

The retail strip extends approximately 800 metres along Bay Street, between Male Street and Cochrane Street. At present, the centre contains approximately 11,800m2 of retail floorspace, including an eclectic mix of predominantly discretionary retail traders in apparel, specialist food, cafes and restaurants, and services such as travel agencies, hair salons and day spa/massage.

A Palace cinema complex is located in the mid-section of the centre, immediately west of the Brighton Beach railway line. The centre is served by the North Brighton railway station and four bus services which operate along Bay Street.

A new Coles supermarket and Liquorland store was recently constructed on the corner of Male and Bay Streets at the eastern end of the centre. Total retail floorspace of this development is estimated at approximately 4,000m2.

Figures 3.2: Bay Street Brighton – Coles development (left); Shops (right).

The addition of a full-line supermarket and large liquor store at Bay Street is anticipated to substantially increase the centre’s market share of the food, grocery and liquor expenditure from the surrounding region, including from the MTA served by Martin Street. However, the

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direct competition of this new development with Martin Street is relatively limited, and trading impacts on Martin Street traders are expected to be relatively minor.

Elsternwick

Elsternwick is a large retail centre located approximately 1.5km to the north of Martin Street NAC. The centre extends eastward for approximately 1,200 metres along Glenhuntly Road from its intersection with Nepean Highway in the west to Shoobra Road in the east.

The centre, which is anchored by a relatively small but very strong performing Coles supermarket, has a strong cafe/wine bar and bistro offer complemented by a diverse mix of convenience and comparison retailers and services.

The centre is well-served by public transport, incorporating Elsternwick railway station and the route 67 (Carnegie) tram line along Glenhuntly Road. However, given a single traffic lane in either direction, shared with the tramline, the strip is subject to traffic congestion issues in peak periods.

Church Street Brighton

Church Street Brighton is situated approximately 2.4km south of Martin Street NAC and is classified as a Major Activity Centre.

Anchored by a 2,360m2 Safeway and 1,100m2 Coles catering to weekly food and grocery needs, the centre has high volumes of customer traffic and centre activity. The two supermarkets support a range of other fresh food specialties, including bakeries, take-away liquor, and fruit and vegetable stores.

The centre has a strong presence of non-food retailers, with a high number of apparel stores, including a number of “name” national brands including Country Road and Laura Ashley, as well as homewares traders, including House and Bed, Bath and Table.

Other Centres

A number of other centres are located within a 3kmradius that are similar to Martin Street NAC in terms of scale, retail offer and function. Given the localised role that these centres serve, they are not necessarily directly competitive with the Martin Street centre despite their relative proximity.

One example is Elwood, located approximately 2.5kmnorth-west of the Martin Street NAC. The Elwood activity centre includes the Village centre focussed on Ormond Road and shops located a short distance further west that are centred on the ‘Elwood Junction’.

Elwood has a strong representation of cafes, specialist food, personal, professional and business services traders. The Elwood Village is anchored by a small-format FoodWorks supermarket and includes several bank branches; Elwood Junction primarily relies on a cluster of well-known cafés to generate patronage.

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Elwood is an example of a centre that contains a large number of traders, but which does not rely on a single ‘anchor tenant’ to generate customer traffic. Similar to Martin Street, the Elwood centre relies on a diverse range of traders and the ability to provide various functions to the surrounding community as the basis for its trading success.

Figures 3.3: Elwood Junction (left) and Elwood Village (right)

Summary

A summary of the key competing centres to the Martin Street NAC is shown in Table 3.5 below.

Table 3.5 Martin Street NAC Competing Shopping Centres

Competing Centre

Anchor Retail Tenants

Occupied Retail Floorspace

Other Major Tenants

Distance from Martin Street

Martin Street NAC Foodworks, 7-Eleven 6,200m2 -

Bay Street Brighton 2 small IGA supermarkets,

Coles 15,810m

2

Brighton Bay Cinema

1.0km

Church Street Brighton Woolworths and Coles 19,360m2

Dendy Brighton Cinema

2.5km

Glenhuntly Road, Elsternwick

Coles 18,200m2 2.5km

Balaclava Road Coles, Woolworths 21,000m2 4.0km

Source: Essential Economics Pty Ltd

3.6 Turnover and Market Share

The Martin Street NAC is presently turning over annual retail trade worth approximately $32.4 million (or $5,230 per square metre of occupied retail floor space), which is consistent with its current function as a neighbourhood centre. This estimate is based on an assessment of the centre’s composition, retail mix and apparent trading performance.

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On the basis of this retail performance, the Martin Street NAC is achieving a market share of approximately 9.6% of the total available retail expenditure from the MTA.

A market share of 9.6% is relatively low for a NAC, and reflects the lack of a major supermarket anchor in the Martin Street centre. Foodworks and 7-Eleven serve a predominantly ‘top-up’ shopping function catering to the convenience needs of commuters and passing trade – with major food and grocery shopping trips undertaken at other centres.

A substantial share of the trade area’s available food and grocery expenditure is presently directed to Bay Street, Glenhuntly Road and other surrounding centres containing major supermarket operators.

3.7 Forecast Additional Floorspace

In the future, any increase in retail demand within the MTA is expected to primarily result in the improved trading performance of the existing tenancy mix, with only limited scope for additional retail floorspace growth. The key reason is that the physical constraints present in the Martin St NAC limit the capacity of the centre to accommodate new retail floorspace as a response to increased demand.

Implications of new Supermarket Development in Bay Street

In view of the lack of an existing full-line supermarket in Martin Street, the centre is unlikely to experience a significant negative impact on trading performance associated with the opening of a large new Coles supermarket at the neighbouring Bay Street centre. Customer visitation and sales at the new supermarket in Bay Street are more likely to be re-directed from other supermarket-based centres, such as Glenhuntly Road, Elsternwick and Church Street, Brighton.

However, over time the additional patronage drawn to Bay Street by the new Coles development may attract additional café and other retailers to that centre which increase the competitive pressure on Martin Street. The potential increase in competition for café and convenience retailing from Bay Street is the most significant competitive threat to the future trading success of the Martin Street centre.

It is a key objective of the Structure Plan to ensure that over time Martin Street evolves and responds to any competitive changes, and retains the existing share of spending by MTA residents that is directed to the centre.

Retail Floorspace Forecast

A forecast of retail floorspace at the Martin Street NAC that is supported by forecast population and spending growth is shown in Table 3.6. The analysis is based on the centre maintaining its current market share of MTA spending (9.6%) and sales sourced from residents living outside the MTA (10% of total sales).

Allowing for an increase in sales at existing retailers of 1% per annum, the analysis shows that by 2031 the Martin St NAC could potentially support an additional 1,100m2 of retail floorspace.

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Table 3.6: Estimate of Supportable Additional Floorspace ($2013)

2013 2018 2023 2031

Main Trade Area Retail Spending $305.0m $335.9m $368.2m $428.5m

Martin Street Turnover from MTA Residents $29.3m $32.2m $35.3m $41.1m

Martin Street Turnover from beyond MTA $3.1m $3.4m $3.8m $4.4m

Total Martin St Retail Turnover $32.4m $35.7m $39.1m $45.5m

Martin Street Forecast Retail Floorspace

Average Trading Performance $5,230/m2 $5,500/m

2 $5,780/m

2 $6,250/m

2

Supportable Retail Floorspace 6,200m2 6,500m

2 6,780m

2 7,300m

2

Additional Floorspace +300 m2 +580m

2 +1,100m

2

Source: Essential Economics Pty Ltd

On this basis, the forecast growth in population and retail spending in the MTA has the potential to support an increase in the retail floorspace provision in the Martin St NAC from approximately 6,200m2 at present, to approximately 7,300m2 in 2031. Note that the mixed-use development on the corner of Martin and Asling Streets will absorb a portion of this forecast demand for additional retail floorspace.

3.8 Gaps Analysis and Centre Development Opportunities

Gaps Analysis

As indicated earlier, Martin Street NAC does lack a major retail ‘anchor’ tenant, such as a full-line supermarket which would assist the centre in competing with other nearby centres. However, there appears to be limited opportunities for the centre to accommodate such a tenant, due to the physical constraints of the centre which limit redevelopment opportunities.

Apart from a major anchor tenant, Martin Street NAC contains a range and mix of tenancies that would be expected in a small neighbourhood activity centre. The strong café and specialised food offer, the presence of a number of niche retailers and a variety of non-retail services provides a point of difference for the centre which will enable Martin Street NAC to continue to compete with other centres and remain a vital hub of activity for the local community. Community engagement undertaken by Council indicates that the local community value the strong café/specialised food and niche retailing offer provided by the Martin Street NAC.

No obvious gap exists in retail and non-retail uses in the Martin Street NAC; however, as the centre evolves over time it will be important that the centre continues to provide a range and level of services (retail and non-retail) that meet the local needs and expectations of surrounding residents.

Overview of Development Opportunities

Development opportunities at Martin Street NAC are expected to be primarily focussed on the incremental intensification of existing land uses, rather than any expansion in the ‘footprint’ of the centre.

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The only obvious redevelopment site, located at to the south of Martin Street and west of Asling Street is currently being developed. However, several single-level retail and commercial buildings in the Martin Street NAC have the potential to be redeveloped for more intensive uses. Opportunities for higher density residential development, including shop-top housing, may also arise. Where appropriate, increasing residential densities in and around the centre will have positive implications for local traders.

Theoretically, Martin Street could be the subject of an application for the development of a major new trader such as ALDI, which is currently not represented in Bayside. The addition of a major retailer would potentially increase the role of Martin Street to that of a Large Neighbourhood centre. However, this outcome is considered unlikely due to:

The physical constraints present in the centre

The potential for land use conflicts with surrounding residential areas

Parking and traffic implications

The availability of other more appropriate sites in larger centres.

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4 R EC O M M E N DAT I O N S FO R O B J EC T I V E S A N D A C T I O N S

This Chapter presents a framework to guide the ongoing operation of the Martin Street NAC in a manner which reflects community views and is consistent with strategic policy goals. Objectives for Martin Street are identified, together with appropriate actions.

These objectives and actions may be addressed in the forthcoming preparation of a Structure Plan for Martin Street. It is expected that the Structure Planning process will identify, where appropriate, planning mechanisms to achieve the broad objectives and actions recommended below.

Having regard for the analysis contained in this report, the following key objectives and actions are identified for a Martin Street NAC Structure Plan.

Objective 1: To support the appropriate growth and development of the retail and commercial sector in the Martin Street NAC

Situation:

The Martin Street NAC has strong heritage values, a high level of amenity and significant physical constraints to future growth. No significant opportunities for infill development have been identified in the centre.

As a result, only incremental growth in retail, commercial and residential activity in the Martin Street NAC is expected over coming years. In terms of retail activity, growth in sales is most likely to be reflected in higher trading levels for existing retailers rather than any significant increase in total retail floorspace. Opportunities for increases in commercial and residential floorspace are expected to be primarily above shops.

Action:

1.1 Council should support appropriate opportunities for intensification of retail, commercial and residential activities in the existing area within the Commercial 1 Zone.

Objective 2: To improve the built environment in the Martin Street NAC

Situation:

The existing built environment is attractive, but opportunities exist to engender a greater ‘sense of place’ in the centre.

Actions:

2.1 Identify opportunities for improvements to the built environment, including ongoing street works, implementation of traffic and parking changes as required, encouragement of re-investment and refurbishment of existing buildings, and encouragement of high-quality shopfronts.

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2.2 Encourage property owners to meet minimum standards of shopfront presentation in order to enhance overall centre appeal and ensure that the centre amenity is not compromised by sub-standard individual tenancies.

Objective 3: To introduce shop-top housing where appropriate

Situation:

It is a strategic intent that activity centres be a focus for new medium-density residential development in the City of Bayside. Some opportunities for shop-top housing have already been developed in the centre.

Actions:

3.1 Recognise that Martin Street NAC has a role in accommodating a share of this residential development.

3.2 Support further appropriate residential development above shops or as part of mixed-use redevelopments of existing sites in the centre, or sites that become available for such development in the future.

Objective 4: To ensure retail function of the Martin Street NAC is supported

Situation:

Despite the appropriate focus on mixed-use development outcomes for the Martin Street NAC, retail will remain the land use that creates the greatest level of activity and determines the role and function of the centre to the surrounding community. The Structure Plan and Council policies should support outcomes that contribute to the ongoing trading success and viability of retail traders in the centre. A successful retail sector in the Martin Street NAC will contribute to the achievement of a wide range of policy objectives for land use and development.

Actions:

4.1 Ensure that the impact of any new or expanded development on individual retailers and the overall function of the centre as a retail destination is explicitly taken into account during Council decision-making.

4.2 Encourage the refurbishment or expansion of key traders and tenancies, in particular the existing Foodworks supermarket which – despite its small size – is an important attractor to the centre that helps support other traders by attracting shoppers to the centre on a regular weekly or more often basis.

Objective 5: To promote centre design improvements

Situation:

The NAC is a pleasant place to visit, but opportunities exist to enhance its physical environment and attractiveness to shoppers and other visitors, its visibility to passing trade, and parking arrangements.

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Actions:

5.1 Introduce prominent but sensitive centre signage at the intersection of Martin Street and Nepean Highway to increase centre visibility to passing traffic on Nepean Highway.

5.2 Ensure that adequate levels of on-street parking supply are maintained within the centre and that any changes to existing parking arrangements are undertaken with appropriate due diligence.