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Bayswater Industrial Precinct Review

Department of State Development, Business and Innovation

(DSDBI)

Final Report

October 2014

APPENDIX A

DSDBI – Bayswater Industrial Precinct Review Final Draft Report

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Document Control

Job ID: 17419BNE

Client: DSDBI

Client Contact: Gaby Nime

Project Manager: Esther Cheong

Email: [email protected]

Telephone: 02 9283 8400

Document Name: Bayswater Industrial Precinct Review Final Draft

Last Saved: 20/4/2015 3:55 PM

Version Date Reviewed Approved

Draft 7/08/2014 EC MC

Final 14/10/2014 EC MC

Disclaimer:

Whilst all care and diligence have been exercised in the preparation of this report, AEC Group Pty Ltd does not warrant the accuracy of the information contained within and accepts no liability for any loss or damage that may be suffered as a result of reliance on this information, whether or not there has been any error, omission or negligence on the part of AEC Group Pty Ltd or their employees. Any forecasts or projections used in the analysis can be affected by a number of unforeseen variables, and as such no warranty is given that a particular set of results will in fact be achieved.

mailto:[email protected]


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Executive Summary

Background

The Bayswater Industrial Precinct is approximately 730 hectares and includes 4,500

businesses employing almost 40,000 people (in the broader catchment). Over 70% of the local employees live within one of the three local government areas (i.e. Maroondah, Knox and Yarra Ranges), demonstrating the local economic importance of the Precinct.

Figure E.1. Map of Bayswater Industrial Precinct

Source: AEC

AEC Group (AEC) was engaged to conduct a comprehensive review of the Bayswater Industrial Precinct and provide recommendations and activities to encourage the revitalisation of the precinct and to ensure it continues to provide an important economic contribution to the local area.

The Precinct Today

The Precinct is generally developed, with less than 10% of greenfield land remaining. On

average, 60% of allotments of vacant land are less than 1,000sqm with a further 26% of allotments between 1,000sqm and 5,000sqm. The Precinct is very large and includes a

diverse range of building typologies. Parts of the Precinct typify an older industrial area, with numerous older buildings occupying smaller lots and individually owned. Other parts of the Precinct look more like a modern business park with new, high quality buildings set amongst high end landscaping. Other parts of the Precinct have developed with more retail oriented activities (particularly along Canterbury Road). Overtime, many of the uses in the Bayswater Precinct have evolved, given the changing conditions across

numerous industries.


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Essentially, the Bayswater Precinct provides a functional home to a wide variety of

businesses and provides a critical function as a local employment hub. Compared to new greenfield developments, it is difficult for the Bayswater Precinct to compete, given its developed nature and competitive disadvantages versus current trends in the industrial

property market (i.e. move to more logistics oriented operations that require large, greenfield sites). Despite its disadvantages, the Bayswater Precinct has its own competitive advantages (i.e. strategic location, skilled workforce and excellent transport links), which allows it to still be a valuable location to many businesses.

Economic Profile and Current Trends

While manufacturing is the dominant industry (35% of total employment) in the catchment, no single manufacturing sector provides more than 7% of total employment. Retail and Wholesale Trade are also large employers (combined almost 20% of employment) as well as Construction (8% of employment), as Bayswater offers a strong base of operations for many construction contractors. The Precinct’s diversity is a product of time and the ongoing evolution of the Precinct over the last 50 years.

Figure E.2. % Employment by Industry (Main Sector, 1-Digit ANZSIC), 2011

Source: ABS (2012a)

While the foundations of the Precinct are very diverse, there are various macro-economic

trends that are impacting most industries in Australia. As globalisation continues to expand, local businesses are faced with ever increasing competition from overseas companies that often operate in a much lower cost environment. The recently high Australian dollar has made this competition even more difficult. At the same time, input

costs such as electricity, gas, etc. have been increasing in Australia, which erodes manufacturing profit margins further. As a result of many of these macro-level competitive factors, many businesses and industries struggle to compete. The Australian

automotive sector is an example of this situation and the departure of Ford, Holden and Toyota has already impacted the Bayswater Precinct with the announcement that Denso will cease production.

While all of these trends will continue to impact and shape the industrial sector in Australia, many local firms adapt and innovate to generate a competitive advantage against overseas competition. Many of these firms seek to leverage high levels of

customer service, high levels of customisation, high technology and innovation to generate a competitive advantage. Many of these firms trade on a global market. The

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

Agriculture, forestry and fishing

Mining

Electricity, gas, water and waste services

Information media and telecommunications

Arts and recreation services

Financial and insurance services

Rental, hiring and real estate services

Public administration and safety

Administrative and support services

Transport, postal and warehousing

Accommodation and food services

Other services

Professional, scientific and technical services

Education and training

Health care and social assistance

Wholesale trade

Construction

Retail trade

Manufacturing

Study Area Broader Catchment Melbourne SD


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recent survey of Bayswater businesses highlights that many of the firms have no

intention of leaving, with 40% of firms intending to stay in their current location for the next 10 years and a further 55% of firms intending to stay for the next 5 years.

It is highly likely that the Bayswater Precinct (and the businesses within it) will evolve

and can adapt through this current wave of transition in a similar fashion as to previous periods of change (i.e. when tyre manufacturing left Australia).

Aligned Vision for the Precinct

In consultation with project partners, an aligned vision for the Precinct has been

developed:

In the future, the Bayswater Precinct will be a sustainable, resilient and desired destination for innovative and prosperous businesses. The precinct will be well serviced and connected, not only through a variety of hard and soft infrastructure, but in how its businesses collaborate and feed off each other. The precinct will become the premiere

business destination in Australia, desired for its adaptive and innovative culture as well as valued for its on-going economic contribution to the community.

This vision supports the continued importance and use of the precinct for economic and employment outcomes.

Future Industry Focus

Future of Current Industry

The Bayswater Precinct has a diverse range of current industries:

Automotive Related Industry: The transport equipment manufacturing sector provides for 6% of total employment within the catchment. Tier 1, 2, and 3 automotive suppliers that did not diversify their business are likely to depart with Holden, Toyota and Ford, as is the case with Denso. However, heavy truck manufacturing is a separate industry (to the automotive) and while similar and

impacted by all of the same global competitive pressures, it has its own separate local market. At this time, it is envisioned that PACCAR operations would remain.

Furniture Manufacturing: Currently, furniture manufacturing is responsible for 3% of total employment in the Bayswater precinct. While it is possible that much of this employment could be retained through adapting local operations to the global competitive environment, it is probable that this employment base will continue to decline locally (in line with national trends).

General Manufacturing: Much of the economic activity in the precinct would be could be grouped into general manufacturing. Many of these businesses have adapted their internal operations overtime, often switching from a pure production operation to more assembly and warehouse (in line with global competitive pressures). While many individual businesses may succumb to global pressures, many will continue to adapt their operations and remain. However, the nature of their activities may continue to shift.

Wholesale Trade and Transport Related Businesses: This segment of industry has performed well in recent past, however, generally requires large floorplate, greenfield areas. In the context of the Bayswater Precinct, smaller scale warehouses

that can accommodate their business to the facilities available in the Precinct are likely future tenants as some of the manufacturing operations are displaced. Many of these activities are expected to remain in the Bayswater Precinct.

Service Industry: There are numerous service industry businesses within the precinct that service a local market. These businesses are likely to remain viable and it is probably that they will remain in their existing locations, as most of these businesses are locally owned and operated small businesses. There will always be a role for local service industry to play in the Bayswater precinct, given the dynamics of the local market in Melbourne’s South East.

Retailer and Associated Bulky Goods: Over the last decade, a wide variety of

retail oriented businesses have developed operations within the precinct (particularly


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along Canterbury Road, given its access, catchment and visibility). As the population

of the surrounding area continues to grow, it is likely that these businesses will remain.

Industries to Target for Investment

Given the unique character and competitive advantages of the Bayswater Precinct, there are three main focal points for attracting future investment into the precinct, including:

Encouraging existing businesses to expand.

Attracting new property investors and developers.

Attracting new investment and employment from prospective future tenants.

Each of these areas will require specific marketing messages and unrelated activities as each group is unique and will have different drivers to their investment decision making.

Given the built out nature of the precinct and the fact that generally speaking in advanced economies (like Australia) 60%-80% of all new jobs and investment comes from existing businesses, the clear focus for future investment needs to be with existing

businesses already located within the Bayswater precinct. It is highly likely that they will also generate the most new jobs.

At the same time targeting property investors and developers in Melbourne is also likely

to generate future investment in redevelopment and renewal projects. There are opportunities for refurbishment of existing space, injecting a hybrid of uses on various larger land parcels as well as the creation of higher end business parks (either from existing greenfield lands or the redevelopment of older facilities).

Given the built out nature of the precinct, it is highly likely that for the majority of new, greenfield projects, the Bayswater precinct will not be competitive against other areas around the Metropolitan region. However, this does not mean that it is impossible to

attract investment (and jobs) from firms currently not represented in the precinct. Based on the local competitive advantages of the Bayswater precinct and the three local government areas as well as broader national trends, the following industries are likely to be attracted and interested in the area in the future:

Local service industry (due to catchment and existing operations).

Specialised, high-end and very niche manufacturing operations (which would typically have a significant amount of engineering and professional employees and focused on

export markets), which could include:

o Food and beverage manufacturing;

o Machinery and equipment manufacturing;

o Specialty chemical product manufacturing;

o High-end plastics manufacturing (i.e. medical applications, food industry, etc.).

Engineering or professional centres that support large, national/global manufacturing

operations.

Professional and technical services.

Attraction of higher knowledge based industries, such as specialised high-tech and scientific equipment manufacturing, scientific and laboratory operations, food production,

chemical and pharmaceuticals will be typical areas of opportunity.

Potential Future Investors

As highlighted above, many of the future investors and tenants will come from the

existing businesses within the precinct. Additionally, property investors and developers (such as Dexus, Goodman, Stockland, MAB, Pellicano, etc.) in Melbourne and Sydney would be natural targets for future investors for many of the redevelopment and renewal opportunities.

Finally, businesses active in the industries above would also be potential future tenants. Businesses in these industries would be generally located around the Melbourne


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Metropolitan Region with a higher concentration of prospective future tenants located in

surrounding industrial areas. At the same time, some businesses in these industries would be global companies with a large footprint across Australia and the world, however, these businesses would make up only a small percentage of future potential

tenants.

The best way to engage with these potential investors and tenants is through a combination of direct engagement and participating in industry focused events (where these businesses are likely to gather).

Barriers to Investment

There are numerous barriers to investment into the Bayswater precinct. Most of these barriers are out of the control of local government and based either on domestic market

fundamentals (in terms of property development) and/or global factors of competitiveness.

The barriers to investment in the Bayswater precinct include:

Fragmented land ownership patterns and small allotment sizes (deemed to be about

90% of the Precinct are sized at 5,000sqm or less) are serious challenges for land assembly.

Limited interest from large occupiers (e.g. logistics and transport operators) and consequently limited interest from institutional funds and investors.

Lack of large contiguous sites to meet the need of large industrial uses (warehouses and logistics facilities) who require large sites to accommodate single level buildings and hardstand area for outdoor storage, loading and parking.

‘Built up’ nature of the Precinct (around 90%), necessitating increased densities or intensified use to make redevelopment feasible. However the ability of industrial uses

to respond to density is limited, as compared to commercial or residential.

Global competitiveness of Australia across many industrial sectors.

Rising costs in terms of water, electricity, gas and labour, which all form input costs for industrial companies.

Lack of size and scale of the Australia market across most industry sectors (based on a relatively small population).

Regulatory environment (relative to other countries).

At a local and often State level, there very few options to mitigate against these barriers of investment. However, efforts should be made around improving local business competitiveness, adaptive capability and encouraging innovation as well as ensuring the most business friendly regulatory environment possible. Competing within Australia and within the Melbourne Metropolitan Region as effectively as possible will be the best way to encourage investment locally. A flexible and responsive planning framework to

business need will be critical (see further discussion below).

Within Australia and particularly overseas, competition amongst governments for jobs and investment is intense. Many jurisdictions, in developed and developing economies, provide a range of incentives to encourage investment and jobs. These incentives are generally geared at a cost incurred by companies and usually tied to government taxes collected from businesses. While incentives are not as common in Australia, various

governments around the country have provided various inducements to recruit certain

businesses and specific types of investments and jobs. This strong level of overall competition amongst governments at all levels and the use of incentives provides another barrier to investment.

Encouraging and Planning for Renewal

The Bayswater Precinct has a stable industrial property market with industrial renewal already taking place. There are currently several new developments that are ongoing in the Precinct and take-up is understood to be patchy with activity predominantly driven by demand for new warehouse/ office buildings and industrial strata units (generally priced between $400,00 and $800,000).


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Bayswater Business Park (Corporate Boulevard) and Eastern Business Park (Merrindale

Drive) are reportedly well received and the refurbished buildings on the former Vulcan site (Mountain Highway) generally enjoy good market acceptance, demonstrating demand for quality and functional space to lease and highlighting the type of

redevelopment that can be successful.

Given the limited availability of vacant lands in the Precinct, many of those developments that are ongoing are of lands formerly part of larger premises (i.e. former Vulcan site, Johnson Tiles site and former parcels of the GlaxoSmithKline site). The former Aspen and Sigma Pharmaceuticals site (96 Merrindale Drive) is expected to undergo refurbishment as well.

Outside of the current renewal projects, competitive land prices in Greenfield/vacant

industrial sites around Melbourne are sought after for new build developments, which makes large scale urban renewal or redevelopment of brownfield/ infill sites not very attractive for mainstream industrial users. The only viable way to compete is if a ‘higher and better use’ for the current site can be found, which usually involves increasing the density of built form on the site or an increase in the intensity of activity on the site.

Demand for industrial space in the Precinct appears to be stable, however, price growth

has notably been modest. As a consequence price levels do not as yet incentivise large scale redevelopment in the Precinct. Notwithstanding this, the ability to combine a range of uses to meet a range of intensification densities is key to facilitating renewal outcomes.

The price of land is a major determinant of development feasibility and in response to the relatively high cost of land in the Precinct, development types that could be pursued in order to encourage redevelopment include the refurbishment of existing space, allowing a

hybrid of uses (including high-tech industrial with larger office content, warehouse/ showroom, etc.) as well as creating a campus style business park.

Considering these development types and ensuring local planning controls allow for them would act as a potential incentive to encourage redevelopment and renewal.

The timing of take-up of development/renewal opportunities in the Precinct will largely depend on the cost of site assembly, a function of land cost. Vacant sites in contiguous ownership will be the cheapest to assemble and will be developed ahead of

brownfield/infill sites. It is therefore important that the Healesville Freeway Reserve be

investigated for its ability to contribute to the Precinct’s low stock of vacant industrial lands. The former Fibremakers site on the corner of Dorset and Canterbury Roads additionally offers a significant opportunity for development.

Development is generally site-specific and is subject to existing improvements and site conditions. It is therefore essential that planning and policy controls, particularly in this

transition period, encourage viable and competitive businesses to the Precinct to fill the gaps left by departing manufacturing businesses.

Planning for Renewal

While planning controls do not in and of themselves influence the viability and competitiveness of business, a flexible and responsive planning framework can make investment in the precinct more attractive from which economic benefits can flow. The following planning reforms can assist in encouraging the ongoing transition and allow the

Precinct to evolve as industry and economic conditions continue to shift.

Consistent with an overall vision and objectives for the Precinct, develop a precinct-

wide policy to be introduced into the planning scheme of each municipality.

Consider a structure plan for the Precinct to complement broad objectives outlined in the local policy by identifying improvements or upgrades in specific locations and providing a spatial and graphic representation of desired outcomes across the Precinct.

The Study highlights that in line with broader industrial sector trends there is likely to be a greater requirement for office content to accommodate greater levels of sales and professional services (scientific, engineering, other professional services) types of activities. Consider the benefits and implications of rezoning selected areas of land


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from Industrial 1 to Commercial 2 to attract investment in response to the trend

towards more office dominated development.

Establish a forum across the three municipalities to exchange information and seek to achieve greater consistency to the assessment of applications across the Precinct.

Adopt a more consistent approach to planning permit application documentation requirements across the Precinct, providing a greater level of certainty for permit applicants.

Adopt a more consistent approach to the application of planning scheme requirements across the Precinct in areas such car parking, landscaping, sustainability and urban design, providing a greater level of certainty for permit applicants and prospective investors.

Facilitate investment and development by prioritizing the processing of these planning permit applications within the Precinct.

Investigate the implementation of VicSmart provisions into each planning scheme to expedite the processing of minor development applications.

Ongoing Challenges and the Role of Government

Many of the industry challenges that are facing Australia, most visibly observed today in the automotive sector, are generally outside the scope and influence of State and local governments. Many of the trends and drivers are macro-economic in nature and relate to the overall global competitiveness of Australia in a globalised world where competition across borders is intense, often with businesses in very low cost environments. These

challenges will remain and it will be the ability of the local businesses in Australia to adapt, innovative and overcome these challenges.

From this perspective, State and local governments still have an important role to play in the ongoing economic development of the community, namely through facilitating economic outcomes through connecting local businesses, existing regulatory frameworks, infrastructure investment and generally developing an environment conducive to business and investment. Specifically, State and local governments have the following

roles in economic development:

Connecting local businesses to share ideas, find local (and better) suppliers and cooperate more.

Ensuring that local regulatory and planning frameworks are conducive to investment as well as ensuring that the overall development approval process is efficient and customer focused.

Investing in local infrastructure (i.e. roads, intersections, telecommunications,

utilities, etc.).

Encouraging businesses to adapt new technology and embrace innovation.

Providing inducements or incentives (where needed) in order to meet strategic or policy objectives.

Implementation Plan

The following implementation plan has been devised to create a series of practical actions

and activities that can be undertaken over the short-term to encourage change, investment and employment over the long-term.

The plan seeks to establish a common platform amongst local governments and State government as well as ensuring that the needs, wants and desires of local businesses are

well understood. It then pursues to create an environment conducive to innovation, investment and jobs through delivering infrastructure on the ground as well as creating a culture of pro-business support and innovation. Lastly, the plan seeks to promote and market the Bayswater Precinct as an innovative, vibrant and connected business precinct that generates significant value for businesses, employees and the community.

Largely, the future success of the Precinct will involve the ability of individual businesses to adapt, innovate and transform in order to remain competitive.


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Figure E.3. Implementation Plan Overview

Source: AEC

Table E.1. Implementation Plan Overview and Timing

Bayswater Action Plan Timing

1. Planning for the Future 2014-15 2015-16 2016-17

1a Acknowledge the Economic Importance of the Precinct

Adopt the aligned vision for the precinct

Create and endorse a common press release

1b Deliver Planning Reforms

Statutory Planning Initiatives

Planning Policy Initiatives

Review Potential Zoning Changes

Prepare and Submit Changes to Planning Schemes

1c Engage with Local Businesses

Develop Internal Reference Panel of Private Stakeholders

Conduct Half Day Forum to Set Business Agenda

Identify Key Priority Areas for Business/Investment

2. Building the Environment

2a Deliver Infrastructure

Conduct Improvements to Transport Infrastructure

Investigate Potential Improvements to Broadband

Conduct Improvements to Precinct Amenity (streetscape, food, services)

2b Create an Environment Conducive to Investment

Form Local Business Group

Build Innovation Hub

Provide Robust Local Framework

3. Selling the Message

3a Branding the Estate

Conduct Branding Process for the Precinct

Develop Brand and Style Guide

3b Develop Governance Structure

Review Potential Models for Bayswater

Identify Best Model for Bayswater

Create Structure or Model

3c Marketing, Promotion and Investment Attraction

Develop Marketing Material

Develop and Implement Marketing and Investment Campaign Source: AEC


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Table of Contents

DOCUMENT CONTROL .......................................................................................... I

EXECUTIVE SUMMARY ........................................................................................ II

TABLE OF CONTENTS........................................................................................... X

1. INTRODUCTION .......................................................................................... 1

1.1 BACKGROUND .................................................................................................. 1 1.2 THE ISSUE ...................................................................................................... 1 1.3 SCOPE AND PURPOSE ......................................................................................... 1

2. PRECINCT OVERVIEW ................................................................................. 3

2.1 LOCATION ...................................................................................................... 3 2.2 PRECINCT CHARACTERISTICS ................................................................................. 3 2.3 STRENGTHS AND WEAKNESSES .............................................................................. 9 2.4 PLANNING AND POLICY CONTEXT .......................................................................... 10

3. ECONOMIC PROFILE OF THE PRECINCT ..................................................... 12

3.1 EMPLOYMENT ................................................................................................. 12 3.2 IMPORTS AND EXPORTS ..................................................................................... 16 3.3 CURRENT COMPETITIVENESS OF PRECINCT ............................................................... 21 3.4 EMPLOYMENT AT RISK ....................................................................................... 23

4. CURRENT TRENDS AND FUTURE INFLUENCES ........................................... 25

5. FUTURE INDUSTRY FOCUS ........................................................................ 28

5.1 FUTURE OF CURRENT INDUSTRY ........................................................................... 28 5.2 INDUSTRIES TO TARGET FOR INVESTMENT ................................................................ 29 5.3 POTENTIAL FUTURE INVESTORS AND TENANTS ........................................................... 30 5.4 BARRIERS TO INVESTMENT ................................................................................. 31

6. OPPORTUNITIES FOR RENEWAL ............................................................... 32

6.1 DEVELOPMENT TODAY ....................................................................................... 32 6.2 CHALLENGES FOR RENEWAL ................................................................................ 32 6.3 DEVELOPMENT/RENEWAL OPPORTUNITIES ................................................................ 33

7. ALIGNED VISION FOR THE PRECINCT ....................................................... 35

8. PLANNING CONSIDERATIONS & RECOMMENDATIONS .............................. 36

8.1 STATUTORY PLANNING ...................................................................................... 36 8.2 LOCAL LAND USE POLICY ................................................................................... 37 8.3 POTENTIAL LAND USE POLICY CHANGES .................................................................. 38 8.4 OVERALL RECOMMENDATIONS .............................................................................. 40

9. ENCOURAGING INVESTMENT .................................................................... 42

9.1 DISTINCT CHALLENGES AND THE ROLE OF GOVERNMENT ............................................... 42 9.2 OPPORTUNITIES FOR FUTURE INVESTMENT AND EMPLOYMENT .......................................... 42

10. IMPLEMENTATION PLAN ........................................................................... 44

10.1 OVERVIEW .................................................................................................... 44 10.2 PLANNING FOR THE FUTURE ................................................................................ 45 10.3 BUILDING THE ENVIRONMENT .............................................................................. 47 10.4 SELLING THE MESSAGE ..................................................................................... 51

REFERENCES ..................................................................................................... 55

APPENDIX A: PRECINCT ASSESSMENT .............................................................. 56

APPENDIX B: GLOBAL TRENDS & OPPORTUNITIES ........................................... 59


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1. Introduction

1.1 Background

The Bayswater/ Bayswater North/ Kilsyth Industrial Precinct (referred to in this report as

the Bayswater Industrial Precinct, the Precinct or the Study Area) is located in eastern Melbourne at the confluence of three municipalities - Knox, Maroondah and Yarra Ranges.

The industrial area is approximately 730 hectares and accommodates over 4,500 businesses. Traditionally, the Bayswater Industrial Precinct has accommodated a high number of automotive manufacturing and related business as well as other manufacturing-type businesses. The area has gradually evolved to accommodate less

manufacturing activity and increased warehousing, storage and distribution type activities.

1.2 The Issue

The Australian manufacturing sector is undergoing a period of significant change and

transition. Globalisation, high labour and operational costs and fierce import competition in Australia has contributed to traditional manufacturing operations relocating offshore, with the Australian automotive industry being the latest casualty of intense global competition. The outcome of this is a need for manufacturing in Australia to move to a ‘smarter’ and ‘knowledge’ based rather than process-based model.

The changing trends of the Australian manufacturing sector pose an immediate threat to jobs and business in the Bayswater Industrial Precinct, which has traditionally been

dominated by these key sectors under threat.

In anticipation of these changes to composition likely to occur in the Bayswater Industrial Precinct, and potential for loss of jobs for the region, the Knox, Maroondah and Yarra Ranges Councils, together with State Government, have undertaken a proactive response to change for the region and see this as an opportunity to reposition and revitalise the Bayswater Industrial Precinct.

1.3 Scope and Purpose

The aim of this project is to set the future direction of the Precinct, promoting a sustainable and resilient business presence in the Bayswater Industrial Precinct, thereby revitalising the precinct.

Specifically, the project will use economic analysis as the foundation for the development

of a practically focused Implementation Plan for the industrial area that will clearly identify:

An aligned vision for the Precinct by the three Councils.

An aligned approach towards planning in the Precinct by the three Councils.

Land use policy changes that may be required to ensure suitable use of available or underutilised land.

The future of current industry in the Precinct and how to capitalise on opportunities that may be apparent.

Industries to target for investment in the Precinct, including those that may already be operating therein.

Where potential investors can be found and how to best engage with them.

The barriers that may prevent investment in the region, and solutions on how to eliminate or minimise the implications of these barriers.

Opportunities (including infrastructure needs) that would make the region more attractive to potential investors.


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Consideration of a collaborative networking mechanism that can coordinate business

and government efforts to implement the vision and actions developed in the Implementation Plan.

This project has been carried out in two parts:

A Background Paper which provides a review of the economic structure of the Study Area, patterns of land use, supply and demand of employment lands within the Study Area, as well as the nature of activities currently undertaken. The Background Paper also identifies the strengths and weaknesses, opportunities and threats of the Study Area.

Recommendations for an Implementation Plan to inform the strategy and future

planning of the Study Area which is the subject matter of this report.

Purpose of This Report

This report provides an overview all of research, analysis and consultation for this project and includes all findings and recommendations.

This report is supported by a Background Paper which clearly identifies the current situation and opportunities for the Precinct, providing a robust evidence base for all

findings.

This report should be read in conjunction with the Background Paper.

Bayswater Business Survey

A survey of 200 businesses was conducted at the end of this project (and was an original recommendation from this project). These results have been considered in subsequent revisions of this report and are provided in grey text boxes (similar to this

one) throughout the report where necessary and valuable.


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2. Precinct Overview

This Chapter provides an overview the study area, its characteristics and general strengths and weaknesses.

2.1 Location

The Bayswater Industrial Precinct covers an estimated 730 hectares of land located across the municipalities of Maroondah, Knox and Yarra Ranges. The Study Area straddles the suburbs of Bayswater, Bayswater North, Croydon South, Boronia, Kilsyth and Kilsyth South.

Located within the City’s East subregion, the Study Area is well connected and is located

40 minutes by road from the Melbourne CBD. The Precinct has access to major road connections including Melbourne’s Eastlink, approximately 5km to the west.

Figure 2.1. Map of Bayswater Industrial Precinct

Source: AEC

2.2 Precinct Characteristics

The Study Area is characterised by a mix of uses and built forms of varying sizes, quality, layout and age, which together have underpinned the growth and evolution of the area

over time.

Survey Results

Just over half of survey respondents have been in the precinct for over 10 years, demonstrating the well-established nature of the precinct. At the same time, almost 75% of survey respondents identified that their current lease would expire within the next 5 years, highlighting the potential for future turnover of space.


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Overall, 90% of industrial land in the LGAs of Knox, Maroondah and Yarra Ranges is built

upon, leaving 10% available for development. In the absence of specific information in the Study Area, by implication this is assumed to represent the situation in the Study Area.

On average, more than 60% of allotments of vacant land in the three municipalities are less than 1,000sqm in size with a further 26% of allotments sized between 1,000sqm and 5,000sqm. Again, this proportion is taken to be representative of the Study Area.

Large proportions of the Study Area is characterised by small allotments which is a constraint for development opportunities due to the highly built out nature of the precinct and fragmented ownership patterns.

Figure 2.2. Map of Sub-areas within Bayswater Industrial Precinct

1 - Bayswater North, bound by Canterbury Road in south

2 - Bayswater/Bayswater North, between Canterbury Road and Mountain Highway 3 - Bayswater, bound by Mountain Highway in the north

4 - Boronia, bound by Mountain Highway in the south 5 - Croydon South, bound by Dorset Road in the west 6 - Kilsyth/Kilsyth South, east of Colchester Road

7 - Bayswater, Mountain Highway focused around Stud Road Source: AEC

In order to understand the nature of the Study Area’s composition, it is necessary to consider separately the distinct sub-precincts. Seven sub-precincts are delineated based

on road accessibility, general use and physical characteristics. Key physical characteristics of each precinct are summarised below (refer to Figure 2.3 for zoning map):

Area 1: Bayswater North, bound by Canterbury Road in the south

Primarily zoned Industrial Zone 1 (IN1) with a mix of old and new buildings. Newer

areas are well presented and aesthetically pleasing. Building types include:

o 1-2 storey warehouse/ offices.

o Large storage sheds.

o Big box retail sheds.


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Lots are generally between 2,000 and 3,000 square metres with 16 lots greater than

2.5 hectares in size (west of Colchester Road).

Land uses include:

o Warehouse, distribution and storage.

o Car yards/sales.

o Retail or bulky goods.

o Industrial supplies.

o Rural-industrial.

Area 2: Bayswater/Bayswater North, between Canterbury Road and Mountain Highway

Primarily zoned Industrial Zone 1 (IN1) with some area as Industrial Zone 3 (IN3)

towards the west of the precinct.

The sub-precinct has a mix of older and newer buildings which are generally well

presented. Building types include:

o Generally 1 storey workshop/ offices.

o 1 storey warehouse/ storage sheds.

Lots are generally between 2,000 and 3,000 square metres with 14 lots greater than

2.5 hectares in size (east of Dandenong Creek).

Land uses include:

o Showroom retail.

o Warehousing.

o Some residential.

o Community/sports.

Area 3: Bayswater, bound by Mountain Highway in the north

Characterised as the most intensive sub-area of industrial uses.

Primarily zoned Industrial Zone 1 (IN1).

The sub-precinct is generally well presented and attractive streetscape associated with new Bayswater Business Park and has attracted more modern developments with more office focused uses. Building types include:

o Generally 1 storey workshop/offices.

o Newer warehouse/ office buildings are over 1 or 2 storeys.

Newer areas are well presented and aesthetically pleasing. Building types include:



Lots are generally between 1,000 and 1,500 square metres with 6 lots greater than 2.5 hectares in size (around Dunlop Court).

Land uses include:


o Light industrial, office.


o Retail, cafés, takeaways.

Area 4: Boronia, bound by Mountain Highway in the south



6

The sub-precinct comprises a new subdivision (well presented on Kalman Drive) and

an older area (with smaller older workshops and warehouses along Macquarie Place). Building types include:



Lots are generally between 1,500 and 2,000 square metres with 3 lots greater than 2.5 hectares in size (Kalman Drive).

Land uses include:


o Light industrial, office.


o Showroom retail.

o Commercial.

Area 5: Croydon South, bound by Dorset Road in the west


Well presented with good streetscape. Building types include:

o Larger 1 and 2 storey industrial facilities with a mix of warehouse /factory/retail

showroom/office space.

Lots are generally 3,000 square metres with 6 lots greater than 2.5 hectares in size (Merrindale Drive).

Land uses include:

o Research and development.

o Light industrial.

o Commercial.


Area 6: Kilsyth/Kilsyth South, east of Colchester Road


The sub-precinct has fair presentation and streetscape with newer buildings on northern side of Canterbury Road off Garden Street and more rural-industrial uses (less intense land use) past Liverpool road. Past Liverpool Road more rural-industrial uses and less intense land use. Building types include:

o Larger 1 and 2 storey industrial facilities with a mix of warehouse/factory/office space.

Lots are generally 3,000 square metres with 22 lots greater than 2.5 hectares in size (Garden Street).

Land uses include:


o Rural-industrial.

o Bulky goods retail.

o Commercial.

Area 7: Bayswater, Mountain Highway focused around Stud Road


The sub-precinct has fair presentation and streetscape. Building types include:

o 1-2 storey warehouse/offices.


7

Lots are generally 1,000 to 1,500 square metres with 2 lots greater than 2.5 hectares

in size (located on the northern side of the Mountain Highway).

Land uses include:

o Light industrial.


o Showroom retail.

o Commercial.

DSDBI – Bayswater Industrial Precinct Review Draft Report

8

Figure 2.3: Bayswater Study Area Zoning Map

Source: Hansen (2014)


9

Overall, the Precinct has a diverse mix of businesses of varying size, scale and activity

type. Business types generally include:

Smaller service industry businesses that play a local service role.

Larger retail and bulky goods operators (e.g. Spotlight, Good Guys, Bunnings).

Large automotive manufacturers (e.g. Denso Automotive Systems, Eaton Vehicle Group, PACCAR).

Global high-technology and knowledge-based companies (e.g. GlaxoSmithKline, Siemens).

2.3 Strengths and Weaknesses

Discussions with various business occupiers, real estate agents and landowners suggest that overall, the Study Area has many strengths. The level of satisfaction of business is generally high, with many of the challenges identified by businesses therein not unique to the Study Area but due to broader economic and structural issues that confront businesses nationwide.

The key strengths of the Study Area are identified to include:

Proximity to highly skilled employment base.

Transport links vastly improved following opening of EastLink.

Accessible location for suppliers, clients and employees.

Diverse accommodation types to suit a range of budgets and requirements.

Survey Results

Survey respondents identified the current strengths of the location, confirming many of

the findings of our consultation. The top four strengths were:

Access to major roads/highways (50% of respondents).

Proximity to customers/clients (42% of respondents).

Proximity to suppliers (30% of respondents).

Proximity to or access to skilled workers (20% of respondents).

In contrast, the key weaknesses identified in the Precinct include:

Limited availability of vacant, unimproved land.

Comparatively higher price of accommodation (i.e. rents, property prices and land values) particularly for larger lots.

Traffic congestion in parts of the Precinct.

Rising utility prices.

Inadequate IT infrastructure and internet speeds.

Lack of staff amenity (e.g. places to buy food).

Recruitment and staff retention issues.

Could benefit from sharing of knowledge, ideas, resources and facilities.

The combination of limited availability of large tracts of land and marginally higher prices discourages many large, logistics and warehousing tenants from considering the Study Area as a location option.


10

Survey Results

Survey respondents were asked to identify the current limitations of the location. Almost a third of respondents didn’t know or were unsure, confirming our consultation that by and large, existing businesses are generally happy with the location. The major

limitations tended to be industry specific, as ‘Other’ was the most popular answer with 42% of respondents choosing this answer. Interestingly, ‘Operating Costs’ were only identified by 8% of respondents as a key limitation or drawback of the location.

2.4 Planning and Policy Context

The Study Area straddles the local government areas of City of Maroondah, City of Knox and Shire of Yarra Ranges. Key zoning observations by local government area (LGA) include:

City of Maroondah - most land within the Study Area is zoned Industrial 1 (IN1Z), with the exception of two pockets of land in Bayswater North (fronting Canterbury Road) which are zoned Industrial 3 (IN3Z).

City of Knox - all land within the Study Area is zoned Industrial 1 (IN1Z).

Shire of Yarra Ranges - all land within the Study Area is zoned Industrial 1 (IN1Z).

Having three individual planning frameworks can be problematic for achieving an overarching development goal and objective for the Study Area, which is governed by differing approaches for application processes for industrial zones, restricted retail premises and other uses within the precinct. Key differences in planning schemes are summarised in Table 2.1.

Table 2.1: Business Profile

Zone Description of Differences Between Planning Schemes

Industrial 1 zone

Stated policy in the application of the Industrial 1 zone in Maroondah and Yarra Ranges is considered generally consistent, with the zone applied to established industrial land. Within Maroondah where a greater amount of industrial land is located, a Framework Plan identifies land for future development also to be zoned Industrial 1. No statements are made in the KPS where future Industrial 1 zone is to be applied.

Industrial 3 zone

Stated policy in the application of the Industrial 3 zone in Maroondah and Yarra Ranges is generally consistent and in line with the purpose of the zone to provide a buffer between other industrial zones and sensitive uses. Yarra Ranges further identifies that the Industrial 3 zone will be applied to smaller pockets of industrial land where the proximity of sensitive uses emphasis the need for such buffers.

Retailing The MPS sets out where restricted retail uses within industrial zones should be located, designating the stretch of Canterbury Road as an appropriate location within the Study Area. In other industrial locations retailing is explicitly discouraged. The KPS also nominates areas where restricted retail uses should be located but does not include land within the Study Area and, as such, restricted retail uses are explicitly discouraged within this area. The YRPS directs restricted retail uses to the fringe of established centres and Business 4 zones but does not include explicit statements discouraging restricted retail uses within Industrial zones, as do the MPS and KPS.

Other (non-industrial) uses

While each planning scheme contains policy statement that emphasises the importance of industrial areas to employment and the economy, none provide guidance about the establishment of other non-industrial and non-retail uses within industrial zones. An application for a planning permit for such a use (e.g. place of assembly) would therefore be subject to broader overall statements about the use of industrial land in the State and Local Planning Policy Frameworks, zone decision guidelines, and zone purposes.

Source: DTPLI (2009), DTPLI (2013)

Recent zoning reform (2013) (at the State level) has resulted in the definition of ‘restricted retail premises’ has been expanded to include a wider range of goods that can be sold. Some of these goods include outdoor and recreation goods, animal supplies, children’s play equipment, sporting and fitness goods, goods and accessories that require a large area for handling, display and storage of goods or require direct vehicle access to the building by customers for the purpose of loading or unloading goods. These reforms

have created a greater level of land use flexibility for relevant premises. However, at the Local Government Level there still remains a need for greater alignment of planning


11

schemes, flexibility and a shared vision and approach to promote economic development

and greater levels of competitiveness as an investment location.

Plan Melbourne and Implications for the Bayswater Precinct

Plan Melbourne was released by the State Government earlier in 2014. This strategic

plan contains a vision, directives, initiatives and actions to guide Melbourne’s growth to 2050.

The Study Area is located within the Eastern sub-region, which is anchored by the Monash National Employment Cluster and Ringwood and Box Hill Metropolitan Activity Centres. A key focus for the Eastern sub-region is envisaged to be a consolidation of future growth in target areas with opportunities for transport upgrades and potential road and rail links.

The activity centres of Bayswater and Boronia are identified as places of local significance.

Traditionally, these areas have been considered ‘industrial’ and zoned appropriately, and historically, this has worked well. However, today, the term ‘industrial’ does not

accurately fit many of the activities that take place on ‘industrial’ land, due to the competitive nature of many sectors and how various businesses have adapted to

remain competitive. As such, there is a need to change the way these areas are perceived and move towards the actual goal of the land use, which is employment (and not limited to traditional activities and land uses). The issue facing many of these traditional industrial precincts close to the Melbourne CBD is how to retain the core function of employment.

The provisions of Plan Melbourne generally provide support the Study Area in its role as employment land, along with supporting access to the area.


12

3. Economic Profile of the Precinct

This Chapter provides an outline of the Bayswater Precinct’s current employment profile, regional import and export activity, competitiveness and future challenges/ risks and how these characteristics are likely to change into the future in response to changing economic and market trends.

3.1 Employment

3.1.1 Study Area Statistical Definition

In order to better understand employment and activities occurring in the Bayswater Industrial Precinct, Australian Bureau of Statistics Census data (ABS, 2012a) was

examined using statistical geographical boundaries (SA2 areas).

The Bayswater Employment Catchment does not align exactly with the Study Area and covers a broader geographical area. Despite this, the Employment Catchment can be

used to identify the types of activities occurring in and around the Bayswater Study Area.

The Study Area is comprised of the following SA2 areas (and are graphically represented in the figure below):

Bayswater;

Bayswater North;

Boronia-The Basin;

Croydon;

Kilsyth;

Montrose.

The Study Area is also compared to the Broader Catchment comprising the LGAs of Knox,

Maroondah and Yarra Ranges.

Figure 3.1: Bayswater Industrial Precinct Map


13

Source: Google Pro (2014)

3.1.2 Employment Profile

In 2011, the Study Area (comprising the SA2 areas of Bayswater, Bayswater North, Boronia-The Basin, Croydon, Kilsyth and Montrose) recorded an estimated 40,000 employees (with over 40% employed in manufacturing and wholesale trade).

Figure 3.2 shows the percentage of total employment by industry and highlights manufacturing is the largest sector of employment for the Study Area and broader catchment.

Figure 3.2. % Employment by Industry (Main Sector, 1-Digit ANZSIC), 2011

Source: ABS (2012a)

Figure 3.3 further shows that the manufacturing sector is not only large but also diverse with employment represented across almost all of the manufacturing sub-

sectors. The most prominent sectors of manufacturing employment are transport equipment manufacturing and machinery and equipment manufacturing which is representative of the Australian automotive sector (a sector that has come under significant stress in recent times in response to changing global conditions and increasing competition).

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

Agriculture, forestry and fishing

Mining


Information media and telecommunications

Arts and recreation services

Financial and insurance services

Rental, hiring and real estate services

Public administration and safety

Administrative and support services

Transport, postal and warehousing

Accommodation and food services

Other services

Professional, scientific and technical services

Education and training

Health care and social assistance

Wholesale trade

Construction

Retail trade

Manufacturing



14

Figure 3.3. % Employment by Industry, Manufacturing (Sub-Sector, 2-digit ANZSIC), 2011

Source: ABS (2012a)

3.1.3 Origin of the Bayswater Workforce: ‘Where do Bayswater Employees Come From?’

Journey to work analysis aims to understand where local residents work and where local workers live. Understanding the skills potential available locally as well as which skills

need to be imported will assist in identifying future opportunities for growth.

The Bayswater Precinct is an important employment precinct for the local resident workforce which is particularly demonstrated for the manufacturing sector which draws almost 65% of its workforce from the Broader Catchment (i.e. the local government areas of Knox, Maroondah and Yarra Ranges). Proximity and access to a skilled local workforce is also a key locational factor that has continued to attract and retain businesses that can leverage the skill of the resident workforce.

Table 3.1 shows that overall, 31.1% of people who work in the Study Area (for all industries) live in the Study Area and a further 39.7% of people are drawn from the Broader Catchment (a total of 70.8% of the Study Area’s workforce lives in the LGAs of Maroondah, Knox and Yarra Ranges). This highlights a high level of self-sufficiency and the importance of Employment Lands in the Study Area for the resident workforce in the LGAs of Maroondah, Knox and Yarra Ranges.

Table 3.1: Journey to Work, Bayswater Study Area, 2011

Description Manufacturing Wholesale Trade All Industry

Works in the Study Area in this industry 13,163 3,259 38,836

Lives in the Study Area and works in this industry 6,606 2,610 44,709

Lives in the Study Area and works in the Study Area in this industry

3,184 695 12,074

Imported labour 9,979 2,564 26,762

Exported labour 3,422 1,915 32,635

Imported labour (% of local employment PoW) 75.8% 78.7% 68.9%

Exported labour (% of local workers) 51.8% 73.4% 73.0%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%

Petroleum and Coal Product Manufacturing

Beverage and Tobacco Product Manufacturing

Pulp, Paper and Converted Paper Product Manufacturing

Non-Metallic Mineral Product Manufacturing

Textile, Leather, Clothing and Footwear Manufacturing

Printing (including the Reproduction of Recorded Media)

Food Product Manufacturing

Wood Product Manufacturing

Primary Metal and Metal Product Manufacturing

Polymer Product and Rubber Product Manufacturing

Fabricated Metal Product Manufacturing

Basic Chemical and Chemical Product Manufacturing

Furniture and Other Manufacturing

Machinery & Equipment Manufacturing

Transport Equipment Manufacturing



15

Notes: POW – Place of Work Source: ABS (2012a)

Figure 3.4: Bayswater Industrial Precinct Study Area, Manufacturing - Origin of Workforce, 2011

Source: ABS (2012a), Google Earth (2014), AEC

Yarra Ranges

Maroondah

Knox

Nillumbik

Manningham

Whitehorse

Monash

Greater Dandenong Casey

Cardinia

Bayside

Glen Eira

Kingston

Central Melbourne LGAs

WhittleseaHume

Melton

3,244

2,698

2,394

387

822

118

452

428

600

385

920

MANUFACTURING EMPLOYMENT (PoW)

25% local labour (from Study Area)38% from broader catchment (Knox, Maroondah, Yarra Ranges)37% imported from outside broader catchment


16

Figure 3.5: Bayswater Industrial Precinct Study Area, Wholesale Trade - Origin of Workforce, 2011

Source: ABS (2012a), Google Earth (2014), AEC

3.2 Imports and Exports

Imports and exports measure the amount of goods and services that a region trades and

can highlight the areas of potential investment attraction and import replacement as well as sectors that trade outside the region and provide significant wealth and economic value locally.

Analysis of imports and exports activity shows that the Broader Catchment exports 1.5 times the value of its imports to the region. This represents a trade surplus for the region and highlights the level of competitiveness of business and industry located in the region.

Survey Results

25% of respondents are currently exporting. An additional 21% don’t currently export, but are interested in exporting. Of these companies, 42% were in the manufacturing

industry, 23% in retail, 13% in wholesale trade and 10% in arts and recreation.

Further analysis of export activity found that key products (by value) exported from the region are wholesale trade, construction services, retail and various manufacturing

products including:

Motor vehicle parts and transport equipment.

Confectionary and sugar products.

Basic non-ferrous metal products.

Human pharmaceutical and medicinal product manufacturing.

Dairy products.

Specialised and other machinery and equipment manufacturing.

Professional, Scientific, Computer and electronic equipment manufacturing.

Yarra Ranges

Maroondah

Knox

Nillumbik

Manningham

Whitehorse

Monash

Greater Dandenong Casey

Cardinia

Bayside

Glen Eira

Kingston

Central Melbourne LGAs

WhittleseaHume

Melton

656

665

535

110

180

31

177

153

169

55

299

WHOLESALE TRADE EMPLOYMENT (PoW)

21% local labour (from Study Area)36% from broader catchment (Knox, Maroondah, Yarra Ranges)43% imported from outside broader catchment


17

Electrical equipment manufacturing.

Much of this industrial type of activity would be undertaken in the Bayswater Precinct, highlighting the importance of the Bayswater Precinct to the broader economy.

Figure 3.6. Export Assessment, Broader Region 2012-13 (Top 20 export industries)

Note: Indicative estimates only. Care should be given to using figures as absolute values of goods and services. Source: ABS (2010a), ABS (2010b), ABS (2012a), ABS (2013c), AEC (2014)

Professional, scientific and technical services represent the highest value of goods and services imported to the Broader Catchment. This sector and other key service based and industrial support sectors could represent potential opportunities for investment attraction and diversification of the Precincts economy in the future.

$129.4

$134.3

$136.4

$145.6

$147.6

$152.2

$156.2

$199.9

$202.1

$206.0

$269.0

$300.8

$369.1

$445.5

$446.7

$484.8

$539.2

$618.0

$1,001.9

$1,359.2

$0 $500 $1,000 $1,500

Primary and Secondary Education Services (incl Pre-Schools and SpecialSchools)

Cleaning Compounds and Toiletry Preparation Manufacturing

Basic Chemical Manufacturing

Wine, Spirits and Tobacco

Heavy and Civil Engineering Construction

Furniture Manufacturing

Other Wood Product Manufacturing

Residential Building Construction

Printing (including the reproduction of recorded media)

Electrical Equipment Manufacturing

Professional, Scientific, Computer and Electronic Equipment Manufacturing

Specialised and other Machinery and Equipment Manufacturing

Dairy Product Manufacturing

Human Pharmaceutical and Medicinal Product Manufacturing

Basic Non-Ferrous Metal Manufacturing

Sugar and Confectionery Manufacturing

Motor Vehicles and Parts; Other Transport Equipment manufacturing

Retail Trade

Construction Services

Wholesale Trade

Exports of Goods and Services by Industry ($M)


18

Figure 3.7. Import Assessment, Broader Region 2012-13 (Top 20 import industries)


$89.1

$99.4

$104.4

$106.2

$110.9

$121.5

$125.0

$133.9

$172.0

$234.4

$239.1

$248.8

$257.3

$268.5

$295.2

$303.4

$357.0

$406.7

$438.4

$691.9

$0 $200 $400 $600 $800

Construction Services

Finance

Wholesale Trade

Publishing (except Internet and Music Publishing)

Electricity Generation

Road Transport

Meat and Meat product Manufacturing

Other Repair and Maintenance

Telecommunication Services

Sheep, Grains, Beef and Dairy Cattle

Rental and Hiring Services (except Real Estate)

Iron and Steel Manufacturing

Auxiliary Finance and Insurance Services

Employment, Travel Agency and Other Administrative Services

Basic Chemical Manufacturing

Transport Support services and storage

Non-Residential Property Operators and Real Estate Services

Non Ferrous Metal Ore Mining

Oil and gas extraction

Professional, Scientific and Technical Services

Imports of Goods and Services by Industry ($M)


19

Supply Chain Analysis: The Manufacturing Sector & Interdependency within the Bayswater Precinct:

Manufacturing is an important sector for the Bayswater Industrial Precinct and the broader Knox, Maroondah and Yarra Ranges economies. The sector provides significant jobs for the local economy and generates economic activity. Supply chain analysis identifies that the top manufacturing sectors (by value) are highlighted below. The inter-related nature of these sectors means that any interruptions to parts of this sector can have considerable flow on

impacts within the local economy (based on the significance of local purchases and local sales).

Motor vehicle parts and other transport equipment manufacturing: estimated to represent over 37% of the value of machinery, appliances and equipment manufacturing activity (refer to Figure 3.8). As highlighted below, this sector heavily leverages local suppliers ($376 million in

purchases) and provides product to local customers ($216 million in sales to local industry and $107 million in local consumption).

Figure 3.8. Supply Chain Tables, Broader Region 2012-13 – Motor Vehicle Parts and Other Transport Equipment Manufacturing

Note: Indicative estimates only. Care should be given to using figures as absolute values of goods and services.

Source: ABS (2010a), ABS (2010b), ABS (2012a), ABS (2013c), AEC (2014)

Specialised other machinery and equipment manufacturing: estimated to represent almost 20% of the value of machinery, appliances and equipment manufacturing activity (refer to Figure 3.9). As highlighted below, this industry leverages local suppliers ($209 million in purchases) and provides product to local customers ($142 million in sales to local industry and $4 million in local consumption).

Figure 3.9. Supply Chain Tables, Broader Region 2012-13 – Specialised Other Machinery and Equipment Manufacturing


LOCAL

CONSUMPTION

EXPORTS

Industry $M Industry $M Industry $M $M $M

UPSTREAM INPUTS TO PRODUCTION

SECTOR OF INTEREST

DOWNSTREAM SALES OF PRODUCTIMPORTS LOCAL PURCHASES SALES TO LOCAL INDUSTRY

Motor Vehicles and Parts; Other

Transport Equipment

manufacturing

$46.9 Motor Vehicles and Parts; Other

Transport Equipment

manufacturing

$116.8 Motor Vehicles and Parts; Other

Transport Equipment

manufacturing

$116.8

Professional, Scientific and $42.4 Wholesale Trade $51.8 Automotive Repair and $49.5

Iron and Steel Manufacturing $37.5 Professional, Scientific and

Technical Services

$31.1 Road Transport $20.1

Wholesale Trade $20.5 Polymer Product Manufacturing $20.1 Wholesale Trade $5.0

Other industries $146.9 Other industries $155.8 Other industries $24.3Total $294.2 Total $375.5 Total $215.7

Motor Vehicles

and Parts; Other

Transport

Equipment

manufacturing

$107.3 $539.2

Iron and Steel Manufacturing $36.7 Wholesale Trade $31.9 Specialised and other Machinery

and Equipment Manufacturing

$28.7

Professional, Scientific and $14.4 Specialised and other Machinery $28.7 Motor Vehicles and Parts; Other $11.4

Specialised and other Machinery

and Equipment Manufacturing

$13.2 Iron and Steel Manufacturing $20.1 Construction Services $10.7

Electrical Equipment

Manufacturing

$10.1 Electrical Equipment

Manufacturing

$19.1 Other Repair and Maintenance $9.8

Other industries $75.1 Other industries $108.8 Other industries $81.4Total $149.4 Total $208.6 Total $142.1

Specialised and

other Machinery

and Equipment

Manufacturing

$3.7 $300.8

LOCAL

CONSUMPTION

EXPORTS

Industry $M Industry $M Industry $M $M $M

UPSTREAM INPUTS TO PRODUCTION

SECTOR OF INTEREST

DOWNSTREAM SALES OF PRODUCTIMPORTS LOCAL PURCHASES SALES TO LOCAL INDUSTRY


20

Supply chain analysis also shows that these industries purchase between 52% and 60%

of the value of their inputs locally and sell up to 32% of these inputs to local industry. Alone for the Motor Vehicle Parts and Other Transport Equipment Manufacturing sector, a total of approximately $591 million is traded in the local economy.

This analysis highlights a high level of trade and business that is conducted between companies based within the Bayswater Industrial Precinct. Major changes to industry structure and the number and types of businesses located in the area have the potential to impact all areas of the broader Knox, Maroondah and Yarra Ranges economies.

Survey Results

Answers to questions regarding to the location of suppliers and customers highlights the interdependence of the precinct (i.e. the strong supply chains across local

businesses). Additionally, the reach and extension of these supply chains to other parts of the Melbourne Metropolitan Region and State are evident. The information also shows the limited amount of companies exporting outside of Australia, which increases the reliance on the domestic market for businesses in the Bayswater Precinct.

Location of Supplier Base

Response Proportion of

Total

Most of the suppliers are from the immediate regions (Melbourne Southeast region) 30.5%

Most of the suppliers are from within the state 21.0%

Most of the suppliers are from the Bayswater Precinct 12.0%

Most of the suppliers are from overseas 11.5%

Most of the suppliers are from outside Victoria but within Australia 9.0%

Critical suppliers are from the Bayswater Precinct 8.0%

Don’t Know/Unsure 8.0%

Total 100%

Location of Customer Base

Response Proportion of

Total

Most of the customers are from the immediate regions (Melbourne Southeast region) 27.5%

Most of the customers are from within the Melbourne Metropolitan region 26.5%

Most of the customers are from within the state 19.5%

Most of the customers are from outside Victoria but within Australia 19.5%

Most of the customers are from overseas 4.0%


Total 100%


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3.3 Current Competitiveness of Precinct

What Differentiates the Bayswater Precinct from Other Areas?

Proximity to employees, suppliers, supplies and key markets.

Proximity to EastLink and good access.

Good exposure with the main road network.

The most competitive feature identified by businesses was proximity to a large skilled labour force to meet the needs of business.

In the context of broader industrial activity in the Greater Melbourne Region, the

Bayswater Precinct has traditionally had a large role in highly specialised machinery and equipment manufacturing with strong links to the automotive sector. The precinct is well-connected due to the recent development of Eastlink and is a highly attractive base due to its proximity to the Melbourne CBD. The precinct’s most competitive feature is its proximity to a skilled labour market with a large proportion of the skilled labour living in

proximity to the Bayswater Industrial Precinct.

The Study Area has a higher employment reliance on the manufacturing sector than the

Broader Catchment and the Melbourne SD. Location quotient analysis of employment by industry data for the Study Area confirms a high level of specialisation in manufacturing across a diverse manufacturing industry base (refer to Figure 3.10). The diversity of the local manufacturing sector and the high-value add nature of these industries suggest this is beneficial to the local region. Alternatively, many of the sectors in which the precinct has a specialisation in are in decline, presenting potential future issues of the

vulnerability of many of these businesses and their future sustainability (please refer to Section 3.4).

In support of the manufacturing sector, the Study Area has developed a specialisation in wholesale trade, in particular machinery and equipment wholesaling, motor vehicle parts wholesaling and basic materials wholesaling (refer to Figure 3.11). This focus on wholesale trade also recognises the broader trends across the industrial sector in Australia, with a focus moving from often pure production or manufacturing to have a

larger focus on warehousing and logistics.

Despite the existing challenges and the changing nature of industrial activity in Australia, the Bayswater Industrial Precinct is likely to continue to attract demand and interest from investors and occupiers owing to:

Proximity to skilled labour market base on Melbourne’s East region.

Proximity to EastLink and arterial road network enabling distribution and servicing of the wider metropolitan area.

Developers will be seeking opportunities to provide smaller and affordable accommodation, combining a hybrid of development types to achieve the returns per square metre required for feasible development.

Survey Results

The survey asked businesses about the primary reason for the current location choice. The top four strengths were:

Convenience / Close to home (22% of respondents).

Business was established here (21% of respondents).

Proximity to customers/clients (13% of respondents).

Affordability and availability of land/buildings (8% of respondents).

As a result, the future precinct is likely to comprise a mix of existing businesses that have changed and adapted to macro-economic conditions and also opportunities to attract new industry to the employment precinct based on these existing competitive advantages.


22

Figure 3.10. Location Quotients, 2-Digit Manufacturing, Study Area, 2011

Source: ABS (2012)

Figure 3.11. Location Quotients, 2-Digit Wholesale Trade, Study Area, 2011

Source: ABS (2012)

About Location Quotient Analysis:

In order to demonstrate the specialisation of the economy, location quotients based on employment have been calculated. The location quotients demonstrate the degree to which a local or regional economy is specialised by examining the proportion of employment (by industry sub-sector) compared to a larger economy (Australian

economy). Location quotients can be used to indicate strengths and weaknesses of a

local or regional economy (i.e. its natural competitive advantage).

For this project, the analysis has compared the Study Area, Broader Catchment (the LGAs of Knox, Maroondah and Yarra Ranges), and the Melbourne SD with the Australian economy. A location quotient of “1” means that the economies being compared have an equal share of employment (compared to the Australia) for a specific industry sector, thus no potential advantage either way. A location quotient above “1” indicates a specialisation of labour and therefore an area of potential

competitive advantage. If the location quotient is below “1”, the area has a weakness in this particular industry sector.

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

Beverage and Tobacco Product Manufacturing

Food Product Manufacturing

Petroleum and Coal Product Manufacturing

Non-Metallic Mineral Product Manufacturing

Primary Metal and Metal Product…

Pulp, Paper and Converted Paper Product…

Textile, Leather, Clothing and Footwear…

Printing (including the Reproduction of…

Fabricated Metal Product Manufacturing

Wood Product Manufacturing

Machinery & Equipment Manufacturing

Polymer Product and Rubber Product…

Basic Chemical and Chemical Product…

Transport Equipment Manufacturing

Furniture and Other Manufacturing

Location Quotient


0.0 1.0 2.0 3.0 4.0

Grocery, Liquor and Tobacco ProductWholesaling

Commission-Based Wholesaling

Basic Material Wholesaling

Other Goods Wholesaling

Motor Vehicle and Motor Vehicle PartsWholesaling

Machinery and Equipment Wholesaling

Study Area

Broader Catchment

Melbourne SD


23

3.4 Employment at Risk

The nature of the Australian manufacturing sector is changing. Globalisation and increased competition from overseas markets, the high Australian dollar, as well as the changing nature of consumer trends are all impacting the competitiveness of the Australian industrial sector. This combined with relatively higher input costs for Australian industry (when compared to other regions such as Asia) has meant that Australian business is facing significant competition and cost pressures from international markets.

These changes to the Australian manufacturing sector are reflected in changes to national

employment between 2006 and 2011 (refer to Figure 3.12). Of the industries that have been declining at the national level, the Bayswater Precinct currently has a large representation of that employment (almost 60% of manufacturing employment). National declining employment trends combined with a high level of interdependency of businesses within the Bayswater Precinct presents significant risks to employment and overall competitiveness of business within the precinct.

Currently, the Bayswater catchment has over 7,500 jobs in the manufacturing

sectors that are in decline (Figure 3.12), highlighting considerable potential future

employment at risk. As Holden, Ford and Toyota have made announcements regarding the end of automotive production in Australia, the effects on the supply chain are already being felt, with Denso (located in the Bayswater North, precinct 5) announcing the end of its manufacturing and the loss of 290 jobs (Maroondah Leader, 2014).

Survey Results

The survey identified that almost 40% of businesses were ‘very likely’ to stay in their current location for the next 10 years and 55% of businesses were ‘very likely’ to stay for the next 5 years.

At the same time, those businesses that did not answer ‘very likely’ regarding their intention to stay in their current location were asked about staying within the Bayswater Precinct. Almost 70% of respondents said that they were either ‘not at all likely’ or ‘not very likely’ to stay in the precinct.

For those companies that were not planning on staying in the Bayswater Precinct, almost 80% of respondents intended to stay within the Melbourne’s Southeast region

and 52% intended to stay in the immediate area around Bayswater. The primary reason for leaving was a ‘Larger premises’(15%), ‘Better premises’(8%), ‘Proximity to customers’ (8%), ‘Opportunity/sales’(6%) and numerous other location factors such as costs, quality of area, lifestyle and proximity.

These results show the diversity of the precinct and the fact that no one single industry

will result in the collapse of the Bayswater Industrial Precinct. The results show the interconnectedness of the businesses within the precinct with the broader region. As many of the companies currently located in other parts of the Melbourne’s Southeast region would likely be in a similar situation, it stands to reason that many of these surrounding businesses would also be future candidates to move into Bayswater.

It should be noted that while overall employment in these sectors is in decline, there will

be individual cases of businesses in these sectors that are growing. For example, there would be companies supplying mining and/or defence transport equipment that would be growing, despite the overall declines in the transport equipment manufacturing industry. Additionally, (and as highlighted in Section 4) the nature of manufacturing is changing

and transitioning to higher-valued production, which would include bringing in more technology into the production process and replacing labour. The net result would be overall declines in employment, increased levels of production and increased value of the

remaining employment (given the high skilled nature required to operate the technology).


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Figure 3.12. Australian Manufacturing Employment Growth, 2006-11

Source: ABS (2007), ABS (2012)

In response to these changing trends, the long term sustainability of business and

employment in the Bayswater Precinct is dependent upon the ability of individual businesses to adapt and change in response to broader economic, market and consumer trends in order to remain competitive.

As the nature of industrial activity changes in Australia, there will be opportunities to attract new investment to the Bayswater Industrial Precinct. These opportunities are likely to be focused on attraction of smaller businesses looking for expansion opportunities in a variety of niche manufacturing types of activities through to

distribution, wholesale and retail trade as well as increasing levels of professional services as well as a focus on supporting existing businesses to expand.

Significant Economic Contribution of Bayswater Precinct

While the nature of industry in Australia is changing, it is important to acknowledge the significant economic contribution that the Bayswater Precinct makes currently. There are 4,500 businesses providing around 40,000 jobs and over $7.5 billion in exports

(outside of the region). Approximately 71% of all employees in the Bayswater Precinct (over 28,000 people) live in the LGAs of Knox, Maroondah and Yarra Ranges.

While transport equipment manufacturing has strong links to the automotive industry (which is currently undergoing significant transition), these jobs account for only 6% of total employment in the precinct. After the restructure of the automotive industry, many of the existing businesses will remain and the area’s economic contribution will continue.

-25.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

Textile, leather, clothing and footwear manufacturing

Printing

Pulp, paper and converted paper product manufacturing

Polymer product and rubber product manufacturing

Furniture and other manufacturing

Transport equipment manufacturing

Wood product manufacturing

Fabricated metal product manufacturing

Non-metallic mineral product manufacturing

Primary metal and metal product manufacturing

Machinery and equipment manufacturing

Basic chemical and chemical product manufacturing

Food product manufacturing

Beverage and tobacco product manufacturing

Petroleum and coal product manufacturing

Manufacturing, nfd


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4. Current Trends and Future Influences

The Australian industrial sector is changing. When considering future opportunities for the Bayswater Precinct it is important to understand the global trends and drivers impacting Australian business and the implications for business and industry (both now and for the future) located in the Bayswater Industrial Precinct in Melbourne’s East.

A broad spectrum of factors influence industrial activity in Bayswater. While some of these are internal factors unique to the Precinct, many originate at the global and national level. Accordingly, understanding the broader context in which Bayswater’s industrial sector operates is essential in identifying future opportunities and demand for employment lands.

Key macroeconomic trends and influencing factors include:

Globalisation and Globalised Competition: Increased global interconnectedness,

particularly over the last two decades, has facilitated the integration of markets and supply chains on a global level. As Australian businesses benefit from branching out

into new markets, the vulnerability of local business to global economic trends and international competition has also increased.

Local businesses involved in manufacturing and processing of goods face fierce competition on the global market. Cheap imports (produced with significantly lower

wage costs and often very large economies of scale) have been further supported by low tariffs and the recent high value of the Australian dollar.

Examples of industry vulnerabilities have been witnessed at the local level with the Bayswater Industrial Precinct set to feel the decidedly large impacts from the imminent exit of Toyota, GM Holden and Ford from local automotive manufacturing. The trend and impacts from global competition are not isolated to the automotive sector and impacts most sectors of the economy.

“Uncomfortably High” Australian Dollar: The value of the Australian dollar is a major determinant of purchasing power for businesses, particularly in the industrial sector where many businesses rely on international supply chains. Higher exchange

rates increase businesses’ purchasing power (in terms of imports), while reducing the competitiveness of their exports on the international market. As the Reserve Bank of Australia continues to highlight that the Australian dollar is at “uncomfortably high” levels (RBA, 2013), profit margins related to industrial activity remain squeezed and

import substitution continues to account for a greater proportion of local demand. Indeed, imports across most product categories have continued to rise in Australia over the last decade.

The high Australian dollar and exposure to globalised competition in Asia has forced an increasing number of trade-exposed business in the industrial sector move production offshore. The decline in Australia’s traditional manufacturing sector, for

example, has had significant flow-on impacts for related sectors including wholesale/retail trade and transportation sectors. Interestingly, as imports increase, the transport and logistics sector continues to grow, however, the new jobs created in logistics are insufficient to replace the jobs displaced.

Increasing Domestic Input Costs vs Productivity Gains: Rising costs of input costs such as capital, utilities and labour are reducing profit margins and is having

significant impacts upon the competitiveness of Australia business. In response to

these challenges many businesses are actively seeking productivity gains, most notably those associated with technological growth, capital investment, improved workforce skills and effective industrial relations. Productivity is inherently associated with globalisation and exchange rates as businesses capture productivity gains by utilising global supply chains. It accordingly plays a key role in determining profit margins and the ability of businesses to engage in industrial activity in Australia.

While some businesses have found productivity gains by offshoring production, others

will gain from the competitive advantage Australia has to offer through higher workforce skills, state of the art technology, strong corporate governance and


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financial sector. Businesses that success in this environment have often embraced

technology and knowledge in order to gain a competitive advantage.

However, generally for Australia, slow productivity growth (ABS, 2013a) across the nation in recent times has placed pressure on the industrial industry.

In response to the above factors traditional manufacturing in Australia is rapidly changing in an effort to survive on the global market. Manufacturers are redefining their operations and the scope of their activities by adopting technologies which offer new and exciting innovation. As this battle for survival occurs, innovative thinking brings about new ways of adding value to products and incorporating new technologies into the production process.

These changes have also brought about a fundamental structural shift in the economy

with many of Australia’s traditional industrial sectors becoming high cost and non-competitive with businesses located in lower cost emerging economies. This structural shift in Australian business is further demonstrated through the historical declines in Australian employment in traditional industry sectors and the rise of employment in the service sectors (refer to Figure B.3). This change signals the rise of the knowledge-based economy in Australia and highlights the importance that adaptability and innovation will

play in future productivity and competitiveness of Australian business.

Figure 4.1. Employment, 1985-2012

Source: ABS (2012)

This transition is also taking place within the manufacturing sector. Since 1985, employment in manufacturing has been in general decline (refer to Figure 4.2), while the value of what the manufacturing sector produces has generally increased (as measured by Gross Value Added).

Despite the challenges, population growth is likely to drive local and national consumption trends with increasing demand for goods and services. In response to consumption growth it is likely that trend for growth of imports will continue, increasing

local demand for warehousing, transport and logistics industries to service imports growth.

In summary, the nature of the Australian industrial is changing with an increasing emphasis on greater levels of value-adding and high-technology manufacturing activities supported by a strong imports culture which will drive demand for greater levels of wholesale trade, warehousing and logistics activities in the Australian economy into the

future.

0%

10%

20%

30%

40%

50%

60%

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More information can be found in Appendix B.

Figure 4.2. Manufacturing GVA and Employment, 1985-2012

Note: GVA – Gross Value Added Source: ABS (2012)

850

900

950

1,000

1,050

1,100

1,150

1,200

-

20,000

40,000

60,000

80,000

100,000

120,000

Em

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GV

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GVA Employment


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5. Future Industry Focus

This chapter focuses on the likely future industry mix within the Bayswater Precinct.

5.1 Future of Current Industry

As highlighted above (refer to Section 3.4), numerous manufacturing industries are facing employment decline across Australia and many local businesses face strong competition from overseas, which will continue to exert pressure on the viability of local industries. ‘

Automotive Related Industry

Many of the Tier 1 and 2 automotive suppliers in Australia, particularly those that are

solely reliant on OEM manufacturing are likely to close in the near future, as evidenced with Denso’s recent announcement. The company had previously identified in 2013 that without local OEM facilities, its operation was not sustainable (Maroondah Leader, 2014).

While an important aspect of the Bayswater precinct, transport equipment manufacturing is only 6% of total employment within the precinct (refer to Section 3.1). Additionally, it should be noted that the automotive industry and the heavy truck industry are very much separate industries and markets and while the heavy truck industry in Australia

would be impacted by the same global competitive factors (refer to Section 4), it will not be directly impacted by the departure of Holden, Ford and Toyota. Naturally, given the size and scale of the Australian market, it is possible that there would be automotive suppliers that may also supply heavy truck manufacturers locally, which, if displaced would impact local heavy truck manufacturing. IBIS World estimates that PACCAR employs 778 people in Australia, highlighting the significant contribution to local transport equipment manufacturing within the Bayswater precinct that this company

makes. At this point in time, it would be expected that this operation continues.

Furniture Manufacturing

Furniture manufacturing is another industry within Australia that is undergoing a difficult transition in the face of strong competition from overseas where the operating cost basis

is much lower than Australia. Nationally, furniture manufacturing is declining (in terms of employment) at a faster rate than the transport equipment manufacturing sector (refer

to Section 3.4). The viability of furniture manufacturing in Australia will directly relate to the innovative and adaptive ability of local businesses. Those that can compete effectively against lower cost producers from overseas through higher services levels, shorter turnaround times, levels of customisation, etc. can remain viable. However, traditional furniture manufacturing will struggle significantly against overseas competition. Currently, furniture manufacturing is responsible for 3% of total employment in the Bayswater precinct. While it is possible that much of this employment

can be retained through adapting local operations to the global competitive environment, it is probable that this employment base will continue to decline locally (in line with national trends).

General Manufacturing

The local manufacturing sector in the precinct is diverse, as highlighted in Section 3. While each specific industry will have its own unique and individual drivers, by and large,

these businesses will be adjusting to global pressures of manufacturing. For Australia,

this adaptation means that they will be transitioning the local operations to focus on high value-adding activities, which may or may not be directly in the manufacturing space. Many of these types of companies transition their business to focus more on service, design, engineering, transport, warehouse, sales and other activities in order to remain competitive. These changes are observed across the precinct (as highlighted in Section 2 and referenced numerous times throughout this report). It is likely that many of these

businesses will remain in operations and many choosing to stay in their existing facilities (to access local markets, supply chains and workforce). However, it is also likely that the nature of their activities on site may change, in order to adapt and compete effectively.


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Wholesale Trade and Transport Related Businesses

As the population continues to grow and demand for a wide range of products continues to increase, wholesale trade and transport related businesses are likely to grow. These types of activities in many instances have replaced traditional manufacturing for

numerous local businesses, where the company still remains in businesses but their operations have transitioned from local manufacturing to importation of goods from overseas and local distribution. While these industries are likely to grow significantly (compared to manufacturing), the majority of growth will take place in new, greenfield estates that can provide the large footprint required by many transport and logistics firms. The Bayswater precinct is likely to retain much of the existing operations in these areas, however, some loss due to normal business growth pressures may see some

businesses opt for a larger premises that may or may not be within the Bayswater precinct.

Service Industry

There are numerous service industry businesses within the precinct that service a local market. These businesses are likely to remain viable and it is probably that they will

remain in their existing locations, as most of these businesses are locally owned and

operated small businesses. There will always be a role for local service industry to play in the Bayswater precinct, given the dynamics of the local market in Melbourne’s South East.

Retailer and Associated Bulky Goods

Over the last decade, a wide variety of retail oriented businesses have developed operations within the precinct (particularly along Canterbury Road, given its access, catchment and visibility). It is natural for older industrial precincts with strong transport

links and significant local catchments to develop a bulky goods oriented retail sector along major transport routes. As the population of the surrounding area continues to grow, it is likely that these businesses will remain.

5.2 Industries to Target for Investment

Given the unique competitive advantages of the Bayswater Precinct, there are three main

focal points for attracting future investment into the precinct, including:

Encouraging existing businesses to expand.

Attracting new property investors and developers.

Attracting new investment and employment from prospective future tenants.

Each of these areas will require specific marketing messages and unrelated activities as each group is unique.

Given the built out nature of the precinct and the fact that generally speaking in advanced economies (like Australia) 60%-80% of all new jobs and investment comes from existing businesses, the clear focus for future investment needs to be with existing businesses already located within the Bayswater precinct. It is highly likely that they will also generate the most new jobs.

At the same time and addressed further in Section 6, targeting property investors and

developers in Melbourne is also likely to generate future investment. There are opportunities for renewal and redevelopment within the precinct, many of which can be

currently witnessed. As older properties and sites are redeveloped, they will often increase their employment capacity (i.e. add additional jobs per square metre or per hectare), thus having a positive impact on the local economy that extends past just the investment into the redeveloped property. Most large property developers and investors will have operations in Melbourne and these entities would likely already be familiar with

the surrounding area (making it easier to discuss future investment options).

Given the built out nature of the precinct, it is highly likely that for the majority of new, greenfield projects, the Bayswater precinct will not be competitive against other areas around the Metropolitan region. However, this does not mean that it is impossible to attract investment (and jobs) from firms currently not represented in the precinct. As


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identified in various sections of this report, the Bayswater precinct has numerous

attractive and competitive features that are important for businesses. However, the built out nature of the precinct means that these businesses would likely be moving into existing facilities, and adapting these premises for their own use. While the specialised

nature of many facilities (e.g. Sigma Pharmaceutical, Denso, etc.), would make them unattractive to many industries, they would be very suitable for similar industries and provide potential competitive advantage in terms of cost, due to the fact that it would likely be more cost effective to move into an existing facility than to build a new one. However, the probability of this occurring would be low. In most cases, businesses would be moving into smaller, existing facilities that can accommodate a variety of uses and would likely be very suitable for service industry or general manufacturing type of

operations.

Based on the local competitive advantages of the Bayswater precinct and the three local government areas as well as broader national trends (refer to Section 3), the following industries are likely to be attracted and interested in the area in the future:

Local service industry (due to catchment and existing operations).

Specialised, high-end and very niche manufacturing operations (which would typically

have a significant amount of engineering and professional employees and focused on export markets), which could include:

o Food and beverage manufacturing;

o Machinery and equipment manufacturing;

o Specialty chemical product manufacturing;

o High-end plastics manufacturing (i.e. medical applications, food industry, etc.).

Engineering or professional centres that support large, national/global manufacturing

operations.

Professional and technical services.

Attraction of higher knowledge based industries, such as specialised high-tech and scientific equipment manufacturing, scientific and laboratory operations, food production, chemical and pharmaceuticals will be typical areas of opportunity.

5.3 Potential Future Investors and Tenants

As highlighted above, many of the future investors and tenants will come from the existing businesses within the precinct. Additionally, property investors and developers (such as Dexus, Goodman, Stockland, MAB, Pellicano, etc.) in Melbourne and Sydney would be natural targets for future investors for many of the redevelopment and renewal opportunities highlighted in Section 6.

Finally, businesses active in the industries above (Section 5.2) would also be potential future tenants. Businesses in these industries would be generally located around the Melbourne Metropolitan Region with a higher concentration of prospective future tenants located in surrounding industrial areas. At the same time, some businesses in these industries would be global companies with a large footprint across Australia and the world, however, these businesses would make up only a small percentage of future

potential tenants.

The best way to engage with these potential investors and tenants is through a

combination of direct engagement and participating in industry focused events. The direct engagement process would entail identifying specific companies to target as well as individual senior contacts within these companies. Engagement should be conducted via email or post initially with a follow-up phone call. There are numerous provides of business data to provide these contacts. Additionally, attendance at industry specific

events (i.e. industry specific trade shows or Property Council of Australia events for property investors and developers) is encouraged as these events provide a considerable number of potential future investors or tenants in one location.


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5.4 Barriers to Investment

There are numerous barriers to investment into the Bayswater precinct. Most of these barriers are out of the control of local government and based either on domestic market fundamentals (in terms of property development) and/or global factors of competitiveness.

The barriers to investment in the Bayswater precinct include:

Fragmented land ownership patterns and small allotment sizes (deemed to be about 90% of the Precinct are sized at 5,000sqm or less) are serious challenges for land

assembly.

Limited interest from large occupiers (e.g. logistics and transport operators) and consequently limited interest from institutional funds and investors.

Lack of large contiguous sites to meet the need of large industrial uses (warehouses and logistics facilities) who require large sites to accommodate single level buildings and hardstand area for outdoor storage, loading and parking.

‘Built up’ nature of the Precinct (around 90%), necessitating increased densities or

intensified use to make redevelopment feasible. However the ability of industrial uses to respond to density is limited, as compared to commercial or residential.

Global competitiveness of Australia across many industrial sectors.

Rising costs in terms of water, electricity, gas and labour, which all form input costs for industrial companies.

Lack of size and scale of the Australia market across most industry sectors (based on

a relatively small population).

Regulatory environment (relative to other countries).

At a local and often State level, there very few options to mitigate against these barriers of investment. However, efforts should be made around improving local business competitiveness, adaptive capability and encouraging innovation as well as ensuring the most business friendly regulatory environment possible. Competing within Australia and within the Melbourne Metropolitan Region as effectively as possible will be the best way

to encourage investment.

Within Australia and particularly overseas, competition amongst governments for jobs and investment is intense. Many jurisdictions, in developed and developing economies, provide a range of incentives to encourage investment and jobs. These incentives are generally geared at a cost incurred by companies and usually tied to government taxes collected from businesses. While incentives are not as common in Australia, various governments around the country have provided various inducements to recruit certain

businesses and specific types of investments and jobs. This strong level of overall competition amongst governments at all levels and the use of incentives provides another barrier to investment.


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6. Opportunities for Renewal

The patterns of supply and demand in the Precinct illustrate its history and traditional focus on manufacturing activity. There are a diverse range of uses and built forms that currently exist, these generally responding to market need commensurate with business and industry activity.

AEC’s Background Paper found that while market activity is generally moderate, rents and capital values achieved suggest a clear market segmentation for prime grade over secondary grade space. Older industrial stock (aged more than 25 years) struggles to be filled even at discounted rents.

Notwithstanding soft market conditions for aged stock, market enquiries suggest steady demand for modern and affordable accommodation.

6.1 Development Today

There are several new developments that are ongoing in the Precinct. Take-up is

understood to be patchy with activity predominantly driven by demand for properties within affordable price points between $400,000 and $800,000. These include new warehouse/ office buildings and industrial strata units.

Bayswater Business Park (Corporate Boulevard) and Eastern Business Park (Merrindale Drive) are reportedly well received, these developments appealing to owner occupiers or small to medium businesses and start-up businesses.

Refurbished buildings on the former Vulcan site (Mountain Highway) generally enjoy good market acceptance, demonstrating demand for quality and functional space to lease and highlighting the type of redevelopment that can be successful.

An industrial lot subdivision (26 lots) is ongoing in the Precinct (Kalman Drive, Boronia),

offering an option to industrial users to customise accommodation to their needs. Sales are most active in the 800sqm-2,000sqm lot size range.

Given the limited availability of vacant lands in the Precinct, many of those developments that are ongoing are of lands formerly part of larger premises:

841 Mountain Highway, a redevelopment of the former Vulcan site.

Bayswater Business Park, formerly part of the Johnson Tiles site.

Kalman Drive subdivision, formerly part of the GlaxoSmithKline site.

The former Aspen and Sigma Pharmaceuticals site (96 Merrindale Drive) which has recently been sold is understood to be positioned for refurbishment and building subdivision. A site at 74-78 Canterbury Road, Kilsyth is proposed for subdivision (37 lots) and is awaiting subdivision approval.

6.2 Challenges for Renewal

The Background Paper identified a series of challenges the Precinct (and indeed many established industrial precincts across the country) faces with respect to prospects for redevelopment and renewal.

The following outlines the challenges of renewal and barriers to investment in the

Precinct:

Fragmented land ownership patterns and small allotment sizes (deemed to be about 90% of the Precinct are sized at 5,000sqm or less) are serious challenges for land assembly.

Limited interest from large occupiers (e.g. logistics and transport operators) and consequently limited interest from institutional funds and investors who are typically customer-led.

Lack of large contiguous sites to meet the need of large industrial uses (warehouses

and logistics facilities) who require large sites to accommodate single level buildings and hardstand area for outdoor storage, loading and parking.


33

‘Built up’ nature of the Precinct (around 90%), necessitating increased densities or

intensified use to make redevelopment feasible. However the ability of industrial uses to respond to density is limited, as compared to commercial or residential.

As a percentage of business operating cost, accommodation cost is relatively minor,

thereby the incentive to optimise use of real estate is not compelling.

6.3 Development/Renewal Opportunities

In response to the changing nature of the Australian industrial sector, it is inevitable that the industrial sector in the Precinct will also undergo change. The degree of these

changes is largely dependent upon the ability of local business to innovate, adapt and respond to the changing business environment.

It is likely that future business profile will include a large share of the existing local service industry, food and bulky retailer businesses, in addition to those more innovative and specialised manufacturers that have been able to diversify and fill the needs of ‘niche’ markets with specialised technology and competitive product offering.

In line with broader industrial sector trends there is also likely to be a greater

requirement for office content to accommodate greater levels of sales and professional services (scientific, engineering, other professional services) types of activities. Accordingly, over time, the nature of employment activity in the Precinct is likely to subtly change. This change will particularly be relevant for the proportion and type of ‘traditional’ manufacturing presence in the Precinct.

Industrial uses do not generally respond well to densities in the manner that residential

or commercial uses do. That said, small scale light industrial users have more opportunity for higher intensity development in response to increasing land values and the desire to use limited space as efficiently as possible.

Industrial users that rely on significant workforce in research and development (R&D), design and engineering and/or sales benefit from being located under the same roof or on the same site, this consolidation of uses able to contribute to an intensification of use. In some instances zoning requirements prevent co-location, however recent zoning

reform legislation has addressed this need.

Competitive land prices in Greenfield/vacant industrial sites are sought after for new build

developments. By comparison large scale urban renewal or redevelopment of brownfield/ infill sites are not feasible, unless there is a change of use or the site is redeveloped into a ‘higher and better use’.

A ‘higher and better use’ can be defined as one that is a densification or intensification of existing built form.

Densification: This refers to an increase in density, typically associated with greater floorspace or heights. Measures of density can be represented by plot ratio, floor space ratio, building heights and setbacks, site coverage ratios, etc. Building densities vary by region, higher density buildings are generally located on higher values lands.

Intensification: An intensification of use is not necessarily accompanied by an increased density of floorspace. Increased intensification can occur without increased

density and measured in any of the following metrics:

o Increased economic and employment activity (e.g. more employees per sqm, more output per sqm, etc.)

o More efficient use of land and resources

o Extending the lifespan of available industrial lands

Intensification can occur in different ways for different industrial sub-sectors, from greater use of technology and automation with higher building ceilings to more

intense employee/ floorspace ratios (generally associated with more office-type floorspace).

As land prices increase, some industrial users find themselves ‘priced out’ and will relocate to lower cost locations while other users who serve a local role or depend on labour/ supply inputs from the region will remain.


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For those users who remain, there will be a need to either increase productivity and

output or reduce cost in order to remain competitive. As such many users will look to achieve increased densities and/or an intensification of use, this consistent with what is required for renewal/redevelopment.

Demand for industrial space in the Precinct appears to be stable, however, price growth has notably been modest. As a consequence price levels do not as yet incentivise large scale redevelopment in the Precinct. Notwithstanding this, the ability to combine a range of uses to meet a range of intensification densities is key to facilitating renewal outcomes.

The price of land is a major determinant of development feasibility and in response to the relatively high cost of land in the Precinct, development types that could be pursued

include:

Refurbishment of existing space: This form of development is the least cost-intensive and which would generate the quickest return outcomes. As a consequence this form of development activity is expected to be an immediate term proposition. The Vulcan site has achieved a successful refurbishment with the former Aspen site having the potential to deliver the same. In some instances, the refurbishment would

replace previous production or manufacturing space with office space, thereby increasing the employment density of the premises.

Hybrid of uses: The combination of a variety of uses within a development (e.g. industrial strata, high-tech industrial, warehouse/storage, retail showroom) would allow a higher rate per square metre to be achieved. This development typology facilitates an intensification of use. This type of development is already being witnessed to a degree (Bayswater Business Park) and is considered a short to

medium term proposition.

Business park: A campus-style business park (similar to Ferntree Business Park, Notting Hill and Nexus Business Park, Mulgrave) would cater to those industries who have a requirement for consolidation of various functions and high-tech or knowledge-based businesses. This development typology is expected in the longer term as industry need transitions to more knowledge than process-based activities.

Considering these development types and ensuring local planning controls allow for them

would act as a potential incentive to encourage redevelopment and renewal. The role the

planning framework can play is discussed in Chapter 8.

Development is generally site-specific and is subject to existing improvements and site conditions. It is therefore essential that planning and policy controls, particularly in this transition period, encourage viable and competitive businesses to the Precinct to fill the gaps left by departing manufacturing businesses.

In some cases business operations can be increased through consolidating functions and operations through equipment and automation allowing for greater output/throughput even in the absence of more floorspace (or increased density).

The timing of take-up of development/renewal opportunities in the Precinct will largely depend on the cost of site assembly, a function of land cost. Vacant sites in contiguous ownership will be the cheapest to assemble and will be developed ahead of brownfield/infill sites. It is therefore important that the Healesville Freeway Reserve be

investigated for its ability to contribute to the Precinct’s low stock of vacant industrial lands. The former Fibremakers site on the corner of Dorset and Canterbury Roads additionally offers a significant opportunity for development.


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7. Aligned Vision for the Precinct

Vision for the Precinct

In the future, the Bayswater Precinct will be a sustainable, resilient and desired destination for innovative and prosperous businesses. The precinct will be well serviced and connected, not only through a variety of hard and soft infrastructure, but in how

its businesses collaborate and feed off each other. The precinct will become the premiere business destination in Australia, desired for its adaptive and innovative culture as well as valued for its on-going economic contribution to the community.

The Bayswater Precinct currently makes a very important contribution to the local economy through its employment (40,000 jobs, 65% of workers come from the LGAs of Knox, Maroondah and Yarra Ranges), export oriented nature (the LGAs of Knox, Maroondah and Yarra Ranges exports 1.5 times what the area imports, generating

significant wealth) and its contribution to local supply chains. This important economic role needs to be retained, nurtured and further developed.

As Australian businesses continue to adapt to global competitive factors and embrace technology and innovation, the physical and virtual environments that they work in will need to adapt and evolve over time as well. Through collaboration and technology sharing, businesses in the Bayswater Precinct can continue to adapt and become more

resilient to on-going trends and shifts in global markets. The built environment needs to reflect the high technology and innovative nature of the desired businesses in the precinct. Improving the overall amenity in the precinct as well as ensuring that the precinct has the latest technology infrastructure and easy access to high speed broadband will be important.

Beyond the physical nature of the precinct, ensuring that the businesses inside the precinct are well connected, networked and collaborative will be equally important for

technology and ideas sharing, which will help to create an innovative culture that will permeate all aspects of local businesses, regardless of their respective industries. A communal identity will develop over time that will provide a strong brand for the precinct and build value as a popular business destination, helping to attract future investment.

In such a way, a unique competitive advantage will be created that will augment the existing competitive advantages linked to accessibility, strategic location, workforce catchment and local supply chains.

Over time, the Bayswater Precinct continue to make an important economic contribution to the local community.


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8. Planning Considerations & Recommendations

In order to achieve an aligned and coordinated approach towards planning for the Bayswater Precinct the following considerations should be made.

8.1 Statutory Planning

8.1.1 Permit Application and Assessment

A consistent approach to the submission of planning permit application documentation would provide for a greater level of certainty about what is expected of applicants. It will

also help reinforce the united approach of the three councils to development in the Precinct.

A brochure or information sheet incorporating the Precinct’s branding could be produced,

outlining the planning approvals process, information to be submitted with an applications, and anything else that might assist streamline the planning approvals process. This could be made available on each Council’s website, and any website established in the overall promotion of the Precinct.

At a more detailed level, a consistent approach to assessing matters such as a reduction

in car parking requirements, landscape requirements, and permit conditions across the

Precinct should be explored, with a view to implementing a consistent approach across the Precinct, and also within the planning departments of each municipality.

8.1.2 Regular Discussion

Regular communication should occur between planning and economic development officers representing each municipality, with the objective of achieving greater consistency across the precinct in relation to application requirements and the

assessment of proposals. This forum could also involve the collection and sharing of development statistics, and a register of vacant and underutilised sites.

There may be some benefit in the planning officers from each council informally referring application to other councils, so that there is an understanding across the precinct of what is being proposed and considered.

8.1.3 Priority Decision Making

Consideration could be given to the level of priority placed on use and development

applications within the Precinct, with a view to reducing timeframes for decisions. This may assist in attracting investment from outside the Precinct, and further demonstrate the commitment of the three councils to supporting the Precinct. The reduction in assessment times could act as an incentive for development.

The introduction of a program like the City of Greater Dandenong’s Priority Paid system could be investigated. This system has been operating successfully since 2004 and, as explained by the City of Greater Dandenong, aims to cut down the normal approval time

for selected large-scale commercial and industrial planning applications by:

Providing the applicant with a choice of approved planning consultants to engage to certify planning proposals before they are lodged; and

Appointing an external planning consultant to prepare a report on the planning application and return it to Council for a decision within a guaranteed period.

This system applies to:

Commercial and industrial developments;

Applications not requiring public notification; and

Applications able to be dealt with by senior planning staff who have delegated authority.


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It is acknowledged that prioritising particular types of applications over others, either

through the regular assessment process or in the implementation of a Priority Paid type system, raises issues of fairness and equity.

It is also acknowledged that each municipality has its own internal systems for allocating files, organizing resources, and delegation for decisions, making the introduction and maintenance of a consistent, workable system across the three municipalities a

challenge.

Given the net community benefits associated with facilitating investment, employment and economic development, however, it is considered that solid justification exists for a prioritized approach and that opportunities in this area should at least be explored and discussed across the three municipalities.

8.1.4 VicSmart

Another opportunity which could be investigated within the planning departments of each

municipality is VicSmart, which is the State Government’s new system for assessing and

expediting the processing of straightforward planning permit applications.

VicSmart will be introduced in September 2014 and includes the following features:

A 10 day permit process;

Applications are not advertised;

Information to be submitted with an application is pre-set;

Matters council can consider are pre-set; and

The Chief Executive Officer of the council or delegate decides the application.

Under VicSmart, Clause 93.04 of the Planning Scheme will allow an application in an industrial zone to be processed where the estimated cost of works is $50,000 or less, is not within 30m of a residential zone, and is not used for a purpose listed in Clause 52.10 (Uses with Adverse Amenity Potential). Minor subdivision applications can also be dealt with under VicSmart. A schedule at Clause 94 can also be introduced which specifies requirements for particular local circumstances. For example, the City of Greater Geelong

has introduced a schedule which provides for the use of VicSmart in its Activity Centre

zone for a range of applications.

One potential benefit of VicSmart. Given the certainty of timeliness and information requirements underpinning the system, is that it may encourage existing businesses to invest in minor alterations or extensions, necessary for improving performance, in circumstances where the complexities and uncertainties of the current planning system could act as a disincentive.

8.2 Local Land Use Policy

From a policy perspective, achieving a consistent approach to use and development of land in the Precinct, across the three councils, should be a priority objective. This consistent planning policy approach can emerge from an overall and wider commitment

to achieving particular outcomes within the Precinct.

Reference to a Bayswater Precinct Strategy or similar in each planning scheme would be a starting point and, ideally, would be accompanied by a set of objectives and strategies,

reflecting the agreed, consistent approach to be taken across the three councils.

With the State Government’s proposed Planning Policy Framework format, it is anticipated that a location based policy across Councils is likely to be supported by the Department of Transport, Planning and Local Infrastructure.

It is considered that a precinct-wide policy must:

Be forward looking and give direction in terms of the change and transition that is encouraged to occur to make the Precinct viable; and


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Describe the future envisaged for the area and make sure that the objectives and

strategies are fully supportive of the high level of transition that will be required in the future to ensure ongoing viability.

It is also essential that the planning policies and controls enable a high level of change to

occur quickly and efficiently and are not an impediment in any way. This concept needs to be inherent through controls and policies.

Input from the City of Knox suggested that a precinct wide policy should give direction on the objectives for the Precinct and include direction on such matters as preferred uses/lots sizes across the Precinct, what should be encouraged along the main roads and internally, what non-industrial uses would give support to the precinct, boulevard planting along the main roads etc.

A consistent urban design policy could also be applied to the Precinct across the three municipalities in conjunction with, or part of a precinct-wide policy, and could guide more detailed controls through built form overlays such as a Design and Development Overlay.

Whilst it is acknowledged that a local planning policy would not be able to control the type of industrial and warehouse uses within the Precinct, it is not considered that

asserting such control is necessary to guide the achievement of a range of other

outcomes in relation to other aspects of development, and land uses which require a permit. Office and restricted retail premises, for example, are permit required uses and, as such, clear policy directions can be included about whether such uses are encouraged or discouraged in given locations.

8.3 Potential Land Use Policy Changes

8.3.1 Overall Policy Approach

If a particular land use is encouraged or discouraged within a particular location, the introduction of common policy provisions within each planning scheme can address this to some extent to achieve a consistent approach across the Precinct. This should be driven by an agreed, overall vision for the Precinct by the three municipalities and resolve current inconsistencies or lack of direction in particular areas, where appropriate e.g. the

preferred location for restricted retail premises.

Any policy changes should provide for a level of certainty for business but should not be too restrictive or prescriptive. In order to be an attractive precinct for businesses to establish, adapt and grow over time, policy also needs to provide for a level of flexibility, and avoid making it ‘too hard’ to engage with the planning system.

Given the broad nature of definitions for land use terms such as industry, warehouse, restricted retail premises, and office, which can provide for a wide range of businesses

within each term, the details of any given proposal and characteristics of any given site will also play an important part in determining whether a new use or development is appropriate within any given location. Recognizing synergies between businesses, efficiencies and benefits gained from establishing in proximity to one another, or to particular infrastructure should be part of such assessments.

8.3.2 Office-dominated Estates in Industrial Zones

This Study highlights that in line with broader industrial sector trends there is also likely to be a greater requirement for office content to accommodate greater levels of sales and

professional services (scientific, engineering, other professional services) types of activities. Accordingly, over time, the nature of employment activity in the Precinct is likely to subtly change.

One issue likely to be encountered over time by statutory and strategic planning departments is the establishment of office-dominated estates, such as the Salta and

Macquarie estates in the City of Monash.

The purpose of the Industrial 1 zone, which covers most of the land within the precinct, is focused on manufacturing and warehouse uses, reading as follows:


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To provide for manufacturing industry, the storage and distribution of goods and

associated uses in a manner which does not affect the safety and amenity of local communities.

Given this purpose, the appropriateness of allowing use and development of land for non-

manufacturing or warehouse based businesses, particularly at a large scale such as for office estates or restricted retail premises has, therefore, historically been an issue and focus of debate.

Recent changes to the Industrial 1 Zone, however, removed the restriction on the allowable floor area of standalone office development (from 500sqm) and established the ability of councils to include a cap in the schedule to the zone.

The ability to prescribe a minimum leasable floor area for restricted retail premises was

also removed, allowing a premises of any size to establish in the Industrial 1 Zone.

The explanatory report for Amendment VC100, which introduced the changes, explained that:

‘the amended industrial zones aim to support business investment and industry by responding to new and emerging trends regarding the mix of industry, office and some

forms of limited retail, and provide greater incentives for business investment’.

There has therefore been a clear shift at State Government level towards allowing non-industrial uses in the Industrial 1 Zone. On this basis, and in the absence of local provisions limiting the floor area of office uses in particular locations, the historical debate should no longer pose an issue.

The Industrial 1 Zone provisions provide for changes of use amongst common land uses without significant obstacles, such as prohibitions or floor caps. The matrix below provides a snapshot of permit requirements, with green indicating no permit required,

and orange indicating that a permit is required.

Table 8.1. Implementation Plan Overview and Timing

Proposed Use

Existing Use Industry Warehouse Office Restricted Retail

Industry NPR1 NPR1 PR PR

Warehouse PR1,2 NPR1 PR PR

Office NPR1,2 NPR1,2 NPR PR

Restricted Retail NPR1,2 NPR1,2 PR NPR

1 Check that industry or warehouse use meets conditions in Section 1 table of zone provisions 2 Requirement for permit triggered by car parking requirements under Clause 52.06 3 Check if loading and bicycle facilities triggers are applicable Source: Hansen

8.3.3 Potential Alternative to the Industrial 1 Zone

Were the rezoning of particular sub-precincts or large parcels of land to be investigated in

the context of responding to economic and employment trends, and facilitating office uses, one option would be the application of the Commercial 2 Zone, the purpose of

which is:

To encourage commercial areas for offices, appropriate manufacturing and industries, bulky goods retailing, other retail uses, and associated business and commercial services.

Within the Commercial Zone, a planning permit is not required to use land for a range of

uses, including offices, and other uses which require a permit in the Industrial 1 Zone. In addition, the use of land for industry and warehouse purposes also does not require a permit (subject to conditions). It is acknowledged that substantial strategic justification would be required to support rezoning of land from Industrial 1 to Commercial 2.


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8.3.4 The Need for a Structure Plan

It is considered that there may be a need to prepare a structure plan for the Precinct. A structure plan would clearly articulate the vision for the Precinct, sending a clear message to industry and community the nature of anticipated development in the future.

The structure plan would also focus on improvements that need to be made to upgrade the appearance, amenity and the function of area i.e. road upgrades, boulevard planting etc.

The structure plan could also identify areas where a different land use emphasis might be recommended i.e. uses along main roads; where restricted retail is encouraged and supported; and if more office-dominated uses might be focused. A range of considerations including traffic, environmental and interface issues would be instructive.

If the decision was made to introduce building and design guidelines, if not for the whole precinct, at least for main roads, it is considered that these would need to be generated as part of a structure planning process.

In preparing a structure plan, the option also exists to prepare a marketing plan /

business plan for the area that relates to non-planning matters, but which council be used by the State Government and the councils to promote and market the area.

8.4 Overall Recommendations

Subject to an agreed overall vision and direction for the Precinct being developed amongst the three municipalities, and with reference to the discussion in preceding sections of this chapter, the following initial actions are recommended to support and

complement the vision and direction through the planning system.

Consistent with an overall vision and objectives for the Precinct, develop a precinct-wide policy to be introduced into the planning scheme of each municipality.

Consider a structure plan for the Precinct to complement broad objectives outlined in the local policy by identifying improvements or upgrades in specific locations and providing a spatial and graphic representation of desired outcomes across the Precinct.

Consider the benefits and implications of rezoning selected areas of land from Industrial 1 to Commercial 2 to attract investment in response to the trend towards more office dominated development.

Consider the likely development/renewal opportunities (refer Section 6.3) in order to ensure localised planning controls encourage future investment and development.

Establish a forum across the three municipalities to exchange information and seek to achieve greater consistency to the assessment of applications across the Precinct.

Adopt a more consistent approach to planning permit application documentation requirements across the Precinct, providing a greater level of certainty for permit applicants.

Adopt a more consistent approach to the application of planning scheme requirements across the Precinct in areas such car parking, landscaping, sustainability and urban design, providing a greater level of certainty for permit

applicants and prospective investors.

Facilitate investment and development by prioritizing the processing of these planning permit applications within the Precinct.

Investigate the implementation of VicSmart provisions into each planning scheme to expedite the processing of minor development applications.

These recommendations are geared towards allowing the planning system to be more flexible and welcoming to the nature of activities that are likely to be attracted to the

precinct. By encouraging the natural transition that is occurring, these recommendations can help to encourage renewal, redevelopment and new investment.

It should be noted that these planning recommendations and potential rezonings would


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not in themselves change the overall viability of any given business. Individual

businesses alone determine their overall competitiveness. Planning does not influence the market competitiveness, however, a planning framework that provides consistency and certainty across the precinct can contribute to an environment where investment

in the precinct is more attractive and from this economic benefits can flow.


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9. Encouraging Investment

This chapter reviews the role of government and future recommended opportunities for growth.

9.1 Distinct Challenges and the Role of Government

As highlighted throughout this report, there are numerous challenges facing Australian industry. From strong global competition to increasing costs, there are various macro-economic factors that put significant pressure on the sustainability of local businesses. All of these factors are out of the control of State and local government and provide an operating environment that local businesses have to continually adapt and evolve in

order to be successful.

While there are numerous examples of businesses and industries in Australia that have succumbed to these global pressures (e.g. Holden, Ford and Toyota), there are also a wide variety of examples of companies that success, albeit much less publicised. These

companies have found innovative ways to adapt and overcome the many challenges facing them today. Many focus on increasing customer services, product quality and shorter turnaround times. These areas provide local businesses competitive advantages

that firms located elsewhere across Asia cannot provide. Many of these firms also export, providing them with access to larger markets that increase local revenues and profits. Quality global products can often attract a premium price, which boosts local profits.

The role of State and local government is not to address any of the macro-economic factors, which would be very difficult, if not impossible. But rather, State and local governments can support local investment and jobs through facilitation of services, through connecting local businesses, fostering innovation and creating an environment

that is conducive to jobs and investment. State and local governments (as local regulators and planners) can encourage investment and development through their planning regimes. Additionally, ensuring a high level of customer service and very efficient statutory planning services, which in turn can instil confidence and aid investors and businesses in making investment decisions. Also, State and local governments provide a range of infrastructure, which is valued by local businesses (e.g. roads, public

transport, waste services, etc.). Lastly, State and local governments across Australia have considered various incentives (both financial and non-financial) as a means to encourage specific strategic and economic outcomes.

9.2 Opportunities for Future Investment and Employment

As highlighted throughout this report, there are a number of avenues to encouraging future investment and employment. Specifically, (refer to Section 5) there are three areas where State and local governments can focus their efforts to encourage investment, including:

Encouraging existing businesses to expand: Generally speaking, existing businesses make up 60%-80% of all new investment and jobs in advanced economies. The Bayswater precinct already contains numerous, innovative businesses

across a number of industry sectors. Efforts should be made to engage with these companies and identify their future plans for growth and to see if and when any government assistance could be helpful.

Attracting new property investors and developers: As the precinct is very established, there are numerous older properties that may not provide the characteristics that modern industrial businesses require. Taking note of the recommendations in Section 6 and Section 8 would help to provide a platform to

engage with property investors and developers that may be interested in participating in redevelopment and renewal within the precinct. There are numerous examples of this renewal already taking place, so increasing the awareness of these opportunities would assist in the redevelopment of the precinct.

Attracting new investment and employment from prospective future tenants: Although the precinct is mostly developed, the opportunity to attract investment and

jobs still remains. Naturally, the limitation of greenfield land for future development


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will limit the ability of the precinct to attract investment and employment in the same

way as the newer industrial areas around the Melbourne Metropolitan Region. That being said, the Bayswater Precinct’s location and specific competitive advantages (in terms of workforce, transport infrastructure, local supply chains and proximity to

Melbourne) will be attractive to some firms in the future. It will be important to ensure that the Precinct is on business decision makers’ minds and that the Precinct builds a valuable brand and solid reputation for being a modern, attractive place to do business. Refer to Section 5 for a more detailed list of potential investors and industries.


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10. Implementation Plan

This Chapter provides an implementation plan and a series of activities to encourage the revitalisation of the Precinct and ensure its ongoing vitality and economic contribution to the local area.

10.1 Overview

The following implementation plan provides general and specific guidance in regards to implementing change to revitalise the Bayswater Industrial Precinct and ensure its ongoing economic sustainability.

It should be noted that given the nature of the current economic dynamics that are

forcing change across the economy, any revitalisation efforts and on-going structural change of employment would take place over decades. To encourage wide-spread, dramatic change over just a few years would not be possible. This implementation plan seeks to put in place activities that over the longer term would see the Precinct maintain

and indeed increase its economic importance.

Figure 10.1. Implementation Plan Overview

Source: AEC

Table 10.1. Implementation Plan Overview and Timing


1. Planning for the Future 2014-15 2015-16 2016-17

1a Acknowledge the Economic Importance of the Precinct

Adopt the aligned vision for the precinct

Create and endorse a common press release

1b Deliver Planning Reforms

Statutory Planning Initiatives

Planning Policy Initiatives

Review Potential Zoning Changes

Prepare and Submit Changes to Planning Schemes

1c Engage with Local Businesses

Develop Internal Reference Panel of Private Stakeholders

Conduct Half Day Forum to Set Business Agenda

Identify Key Priority Areas for Business/Investment

2. Building the Environment

2a Deliver Infrastructure

Conduct Improvements to Transport Infrastructure

Investigate Potential Improvements to Broadband

Conduct Improvements to Precinct Amenity (streetscape, food, services)

2b Create an Environment Conducive to Investment

Form Local Business Group


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Build Innovation Hub

Provide Robust Local Framework

3. Selling the Message

3a Branding the Estate

Conduct Branding Process for the Precinct

Develop Brand and Style Guide

3b Develop Governance Structure

Review Potential Models for Bayswater

Identify Best Model for Bayswater

Create Structure or Model

3c Marketing, Promotion and Investment Attraction

Develop Marketing Material

Develop and Implement Marketing and Investment Campaign Source: AEC

10.2 Planning for the Future

This phase of the implementation recognises the need to ensure the foundations are set

for progressing with the revitalisation of the Precinct and the fact that the Precinct stretches across multiple local government areas. Additionally, this phase will focus on the existing businesses in the Precinct and ensure that their desires and needs will be met in the future through the revitalisation efforts.

This phase has three initiatives, including:

1. Acknowledging the economic importance of the precinct 2. Delivering various planning reforms to ensure consistency across the precinct

3. Engaging with local businesses, owners and investors

10.2.1 Acknowledging the Economic Importance of the Precinct

Why: Given the recent negative press regarding the manufacturing sector and the departure of Holden, Ford and Toyota, providing a positive counter story will help to focus attention on Australian industry and the role that it can play in providing jobs and investment into the future. Additionally, it should be important for all stakeholders to

understand and acknowledge the important economic role that the precinct plays, particularly across the three LGAs of Knox, Maroondah and Yarra Ranges.

What it addresses: Open and public acknowledgement of the economic importance of the precinct (refer Section 3) demonstrates support and appreciation for the businesses located within the precinct. It also supports the overarching aligned vision (refer Section 7) for the precinct and demonstrates the State and local government commitment to the precinct, which will help to foster investor confidence and support for local businesses.

Description of Key Activities:

The first key activity is for the government stakeholders to adopt an aligned vision for the precinct. The vision outlined in Section 7 should provide a basis and initial draft, based on discussions with project stakeholders. This vision should be circulated and amended as the project stakeholders see fit and then circulates to various other stakeholders within DSDBI and the LGAs of Knox, Maroondah and Yarra Ranges. It will be important that this aligned vision received formal acknowledgement and adoption by the

three local governments.

Additionally, after formal adoption, a press release should be provided highlighting the Precinct’s economic contribution (highlighted in this report) and the adopted aligned vision. This press release should be written in a manner to highlight:

Current economic contribution in terms of businesses, jobs, exports and the fact that the precinct provides employment for a significant amount of local residents.

While the automotive industry is important, it contributes to just 6% of total employment in the precinct.

Highlight examples of innovative global and local businesses that are active in the precinct to further highlight the precinct’s economic importance.


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Given its economic contribution, the three local governments have joined together

with DSDBI in establishing a common vision for the precinct in the future which would see its economic contribution heightened.

Highlight the formation of a locally based industry reference panel to provide further

guidance and advice to government in regards to the future development and evolution of the precinct.

State and local governments will be working proactively to ensure the precinct continues to be a vibrant place of business into the future (and continue providing the economic contribution).

10.2.2 Delivering Planning Reforms

Why: The nature of economic activity in the Bayswater Precinct is consistent and the

local government boundaries play very little role in the day-to-day operations within the Precinct, nor do they impact a business’s decision in terms of where to locate their operations. Ensuring there is a consistent approach to planning and that developers or investors face the same planning controls and guidelines across the Precinct is logical and

would assist the market in its future approach to redevelopment in the Bayswater Precinct.

What it addresses: Section 6 and Section 8 highlight a number of areas in the strategic and statutory planning sphere that will be important for the future development and vitality of the precinct. In particular, ensuring that local zonings and planning controls are flexible and appreciate the current operating environment and major trends in industrial property (refer to Background Report) will help to encourage renewal and redevelopment. Specifically, considering the development and renewal opportunities highlighted in Section 6 will help to engage with major property investors and developers

through providing a range of renewal and redevelopment investment opportunities that would likely yield higher employment densities, new jobs and an increase in the value of employment as well.


The planning reforms highlighted in this report (refer Section 8) should be pursued by the LGAs with the goal of having a simultaneous, joint submission to amend their

planning schemes appropriately.

As this formal process takes time, all three local governments should consider the development/renewal opportunities highlighted in Section 6, namely:

Refurbishment of existing space to better accommodation current and future uses.

Hybrid of uses to allow for the appropriate mix of uses that current market demands.

Business park which sees a mix of uses and a higher order of economic activity.

Consideration should be given as to how these recommendations may be accounted for

under the current planning tools. The ability to promote these types of changes to the local planning environment will be critical to approaching property investors and developers and encouraging ongoing renewal and redevelopment.

10.2.3 Engaging with Local Business

Why: Existing businesses provide for 60%-80% of all new jobs and investment in advanced economies (like Australia). As such, ongoing engagement with local businesses

is very important to encouraging future growth and investment.

What it addresses: Section 3 highlights the significant economic contribution that the precinct currently makes as well as the diversity of businesses, industry sectors and general economic activity that takes place across the precinct. As highlighted in Section 4 and Section 5, all industries are under pressure and being forced to adapt, innovate and change in order to remain competitive.


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As an initial step, an internal reference panel of private stakeholders (including representatives from existing companies, landowners and investors) needs to be formed to work with representatives from the LGAs and the State Government on the

revitalisation of the Bayswater precinct. This reference panel could be mentioned in the press release. The group should include a mix of large and small businesses as well as a representative sample of different industries and businesses from different parts of the precinct.

This reference group would have a number of tasks (and form the basis for ongoing engagement and dialogue with local private stakeholders in the precinct), including:

Act as a sounding board for ideas and future initiatives.

Explore industry evolving needs and what it means for future industrial land demand and intensification potential.

Provide private sector perspectives on the competitive advantages of the precinct, future growth opportunities and impediments to economic development.

Provide feedback and input into revitalisation initiatives.

Act as an ‘ideas bank’ for ensuring public/private cooperation moving forward (i.e.

what sort of vehicle is best for ensuring ongoing dialogue).

This group would also be the precursor to a more formal Bayswater Business Group (refer to Section 10.3 below).

The Value of Engagement

A survey of 200 businesses in Bayswater was recently conducted and highlights the valuable contribution that engaging with businesses directly can provide. As highlighted throughout this report, the survey confirms many of the findings of this

report as well as highlights areas for future consideration and effort that is valued by the local businesses.

10.3 Building the Environment

This phase seeks to leverage local and State Government activities to create an

environment that supports ongoing and future investment. While both local and State Governments would want investment and job creation, only private businesses can provide these benefits. Government, however, can support investment and jobs growth through infrastructure, planning, regulatory environment and broader business/industry support.

10.3.1 Deliver Infrastructure

Why: Infrastructure (i.e. transportation, utilities, and telecommunications) is a key

aspect of employment precincts and a driver of business location decision making. It is also an area where governments can directly influence outcomes. Providing dedicated turning lanes, improving traffic circulation, resolving traffic bottlenecks and increasing access to high speed broadband would make the Precinct overall more attractive for existing and future tenants and investors.

Survey Results

The top three infrastructure projects from the survey (measured by the % of respondents that said the infrastructure would be somewhat important or very important to their business) include:

Access to high speed broadband (67% or respondents).

Improved road conditions and/or configuration (65% of respondents).

Improvement to the overall look and presentation of the Bayswater Precinct (55% of respondents).


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What it addresses: As highlighted in the Background Report and in Section 3,

infrastructure is a key competitive decision factor for many businesses and investors. Ensuring that various infrastructure improvements happen will increase the competitiveness of the precinct and help it be more attractive to various target groups in

the future (refer Section 5).


Together with input from local businesses and owners, local governments should consider various improvements to local transport infrastructure around the precinct. The local business reference panel should provide initial feedback in terms of the transport infrastructure priorities. These priorities should be further explored in terms of the level of support from local businesses (either through a newsletter campaign, short forum for

businesses and/or simple feedback forms) as well as the appropriate solution and whether or not the solution is practical (in light of cost and time).

Specific transportation improvements to consider would include:

Dedicated turning lanes from Liverpool Road onto Canterbury Road.

Better interaction with rail crossings (overpass/underpass).

Improved public transport (including the potential shuttle service around the Precinct

at peak times to provide better public transport access for workers) which should lead to better parking outcomes and less congestion.

Alternative street/road configuration within the precinct to improve circulation.

The importance of high-speed broadband internet was highlighted in the Background Report as well as captured during the consultation for this project. Improving the availability and quality of access to high-speed broadband will be important to the future attractiveness of the precinct. As businesses continue to innovate and adapt to

change, they will require higher and higher degrees of access to high-speed, broadband internet. A high level assessment of the current state of high-speed broadband telecommunications within the precinct should conducted and it should highlight specific cases of local businesses not having the access they require in order to be competitive. This information should then be used to map out the most appropriate solution, which could include lobbying for infrastructure spending, investing directly into an improved network or an alternative course of action. The significant economic contribution of the

precinct and the economic impact of improving high-speed connections should be considered, regardless of the solution.

Increasing the overall look and presentation of the Bayswater Precinct would also make it more attractive for business. The development of an ‘economic boulevard’ in Canterbury Road to better present and pronounce the employment precinct could be an avenue to consider. These improvements would consider entry/exit signage that would

better pronounce the precinct (and link to overall branding – refer Section 10.4) as well as the general appeal of the area. Presenting a clean and welcoming environment would be important for businesses and employees alike. A process to consider landscape and branding improvements along major transport corridors within the precinct (e.g. Canterbury Rd, Dorset Rd and Mountain Hwy) should be pursued.

Additionally, improving the employee amenity within the Precinct would make it more attractive to highly skilled workers, which would also benefit local businesses. Improved

diversity and quality in the local food/restaurant offer, improved personal services (i.e. dry-cleaning, child care, grocery shopping, etc.) and localised business services would all

contribute to making the Precinct more attractive for investment.

It should be noted that it is not recommended that all of these uses are contained within the industrial precinct itself, but ensuring that local workers have ample access to these types of services in and around the precinct would be important to increasing the area’s attractiveness from an employee perspective. Planning considerations should be given to

encourage these types of uses on appropriate lands in and around the Precinct.


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10.3.2 Create an Environment Conducive to Investment

Why: Governments cannot typically direct private sector investment and employment creation, however, governments can create an environment that is conducive to and encourages investment and job growth.

What it addresses: As highlighted in the Background Report and various parts of this report, there are numerous competitive factors that have and will continue to impact businesses in Australia. State and local governments have limited choices will trying to mitigate these factors and others barriers to investment. However, there are various roles for State and local government in creating an environment conducive to investment (refer Section 9.1).


These initiatives will contribute to building a pro-business and pro-investment environment for the Bayswater precinct, using tools and capabilities that are available to government. The formation of a local business group (i.e. Bayswater Business Group) could create a mechanism for ongoing dialogue with businesses, create a forum for local businesses to meet each other and most of all generate opportunities for local

businesses to share ideas, knowledge and perhaps find partners/suppliers/customers.

As many businesses are busy in their day-to-day operations, governments can provide the organisational skills and/or secretariat function (as well as providing a venue to meet at). This assistance allows businesses the luxury of ‘just showing’ up and receiving the value of interacting with others. The business association could provide networking events, forums to address local issues and/or link in with existing business training events.

Activities of the Bayswater Business Group could include:

Networking to meet new local suppliers or customers.

Showcasing of local businesses (through networking events and tours).

Providing feedback and input to State and Federal Government.

Highlighting new technology and innovation.

It is also important to realise that this group should not have any formal structure or

legal entities, but rather provide an informal mechanism to meet and share ideas. Amongst the three LGAs and the State Government there is already significant efforts to

provide many of these types of functions. These efforts should be leveraged and invitations to various events across the three LGAs should be made available to all businesses within the Bayswater Precinct. Similarly, the Bayswater Business Group should be driven by local business leaders, utilising support from local government, instead of becoming an initiative of local or State government specifically.

Survey Results

The survey provided evidence of strong interest from local businesses in taking advantage of various forms of business support, including:

Opportunities to access new technology (38% of respondents).

Opportunities to identify new local suppliers or customers (37% of respondents).

Local business association to network and meet with other local businesses (34%

of respondents).

Website for networking (21%).

Opportunities to access more localised training for workers (19% of respondents).

Seminars and workshops around business topics (16% of respondents).

While there are existing avenues from State and local government to access business support, the survey shows that there is still interest from local firms in the Bayswater areas for these types of business support.


50

As the research contained in the Background Report has identified, embracing technology

and innovation will help all businesses adapt and react to changes in their industries and increase their competitiveness. Building a local innovation ‘hub’ is more about creating a culture of innovation rather than a ‘bricks and mortar’ centre. Part of building a

culture involves getting businesses to interact with one another (as part of a business association or simply gathering often together).

For the Bayswater area, a series of local case studies demonstrating how local companies have embraced innovation, technology and change (and the benefits they realised) would help to make innovation real to these businesses and hopefully encourage them to seek out practical applications within their own businesses. Outside businesses or speakers could also be introduced to portray how others have successfully embraced technology.

Beyond considering technologies at a business level, the Bayswater Precinct could also become the centre of demonstrating new technologies. For example, the Bayswater Precinct could be a demonstration location for new energy generation, new energy efficiency and other technologies that would apply to industrial areas and a concentration of industrial users.

The Bayswater Business Group could be the ideal vehicle to drive the innovation hub.

Beyond case studies and speakers, ensuring that local businesses have access to technology and innovation will assist in uptake and technology transfer. Throughout the Melbourne metropolitan region, there are numerous options for businesses in terms of accessing innovation (depending on their specific industry and needs) including Victorian Centre for Advanced Materials Manufacturing (VCAMM), Monash University, Swinburne University of Technology, etc. Opportunities to generate outreach from these institutions should be made to open up access for local businesses to these institutions.

Building an innovation ‘hub’ or culture will take considerable time (Silicon Valley has taken 50 years to develop) but can provide immense value to the local area, if it can be achieved. Locations that have access to and are known for innovation and cutting edge technology attract businesses, investment and highly-skilled workers.

Case Study: Innovative Culture of Silicon Valley

Silicon Valley is synonymous with technology and innovation with major companies such as Intel, Hewlett Package, Cisco and others being founded in the region. One of

the region’s most significant competitive advantages is the unique innovation culture that has been created over decades. Unlike many regions, workers and company share ideas and develop new concepts together. The interaction of research, ideas and capital creates an interesting combination of corporate characteristics that are not easily observed in other areas.

The ‘culture’ seems to be built around principles of experimentation and continual

improvement, a strong commitment to working together and competitive cooperation as well as a pragmatic focus on problems and issues.

The culture has taken decades to develop and was founded on the combination of a highly intelligent workforce, research and development and risk embracing capital.

As highlighted in Section 9.1, State and local government have a distinct role they can play in generating local economic development outcomes. By providing a robust local framework to support investment and jobs, governments can create a pro-business

environment that is conducive to investment and jobs growth.

For example, ensuring there is a single point of contact (or case management) for businesses and/or investors will help to stream line internal processes and ensure that these ‘customers’ receive good service from the local government. Amongst the three LGAs and DSDBI, the identification of a specific project manager for Bayswater should be considered. This person would act as a single point of contact (case manager) for local businesses, investors, etc. as well as a liaison with the Bayswater Business Group.

Additionally, the provision of incentives to encourage the desired outcomes can help to achieve them and allow local areas to compete more effectively, both domestically and internationally. Incentives could be in the form of financial or planning incentives and should be tied to the desired outcomes in terms of investment or jobs. Investigations should take place to identify any potential incentives, either financial or non-financial,


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that may be needed to increase investment into Bayswater. From research conducted for

this report, the most effective incentives may be the planning provisions including changes to zonings and planning controls (refer Section 6.3) as well as ensuring an efficient and proactive development assessment process. Ensuring that government

direct infrastructure expenditure is targeted in the appropriate areas (refer Section 10.3.1) also helps to create an environment that is conducive to investment.

10.4 Selling the Message

This third phase of the implementation will deal with promoting the area for investment

and/or reinvestment. It will leverage the previous stages and market the unique selling points and competitive advantages of the Bayswater Precinct.

What are we selling?

Attracting investment and jobs is very similar to sales and marketing roles in other industries. However, in terms of attracting investment, the ‘product’ is less tangible than most other industries. The ‘product’ in most cases is a community, location or

precinct. These ‘products’ are usually more indeterminate and hard to define.

For investment attraction, it is important to focus on the competitive advantages and unique aspects of the community or precinct. In the case of Bayswater, one of the most significant current competitive advantage is the highly skilled workforce that is easy accessed from the surrounding areas. Many of these workers travel into the Melbourne CBD or surrounds for work and would often prefer to work closer to home.

As the Precinct continues to develop and if the pro-business environment described

above can be developed, then it would also act as a competitive advantage and help to attract further investment and jobs.

10.4.1 Branding the Estate

Why: The Bayswater Precinct is generally known in terms of geography but lacks substance and definition in terms of what the estate ‘is’. Conducting a branding exercise to actual provide a specific definition and brand to the Precinct would help to market and promote it as a business and investment destination. The branding could also link in to

the future desired vision and a focus on innovation, technology and/or adaptation.

What it addresses: As highlighted in the Background Report and through consultation, there is no well accepted definition regarding the Bayswater precinct and while businesses consulted identified with the location, there was a lack of definition and ability to clearly highlight ‘what’ they were connected with. Conducting a branding exercise would help to provide this definition as well as link into the future aligned vision for the precinct and help to convey this vision to the market. Having a succinct brand would also

help to redefine the precinct and increase its amenity through naming, signage and associated links to the branding.

Survey Results

The survey showed that the existing brand and reputation of the Bayswater Precinct do not mean a lot. 13% of respondents identified that the reputation of the Bayswater precinct was a current strength of the location, while just 5% of respondents identified

the reputation of Bayswater precinct to be a limitation or drawback from the location.


Branding the estate will require a focus on its unique characteristics and competitive advantages and well providing a clear definition of the Precinct and what its future will be. Branding needs to consider its geographic location as well as future development potential. The brand also extends much further than just a logo and a tagline. It will seek to inspire and capture attention as well as (over time) contribute value to those

businesses that are located in the Precinct. For example, there is a certain prestige that comes with being located in Silicon Valley on in Collins Street in Melbourne’s CBD.


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It is recommended that a branding exercise be conducted involving DSDBI, the three

LGAs as well as local stakeholders, like the Bayswater Business Group. Additionally, the importance of the branding should be discussed with the Bayswater Business Group and/or the business reference group in order to ensure that it aligns to local business

thinking and that the local businesses and investors would find value in such an initiative.

Naturally, a branding initiative would also help with future marketing, promotion and investment attraction.

10.4.2 Marketing, Promotion and Investment Attraction

Why: In order to attract investment and jobs, it will be necessary to market and promote the precinct as a business and investment destination.

What it addresses: As highlighted in this report (Section 5), there are a variety of

future potential investors to engage with regarding future investment in the Bayswater Precinct, including existing businesses (i.e. those businesses that are already within the precinct), property investors and developers (likely focused around Melbourne) and potential future tenants in selected industries. The following activities note the

competitiveness of the precinct (Section 3) and existing trends and influences (Section 4 and the Background Report) to focus on those distinct areas where Bayswater can

effectively compete.


Marketing, promotion and investment attraction will need to be geared towards the three specific audiences identified for future investment, namely:

Existing businesses (investing in expansion).

Property investors and developers.

New businesses (e.g. future tenants or businesses not currently in the precinct).

Each of these groups will have different drivers around their future potential investments. Existing businesses are likely to be in the situation that their current facilities become insufficient or inadequate to support their business and additional or alternative space is required. These businesses are likely to have significant interests in staying within the local precinct given existing suppliers, customers and workers.

Property investors and developers are looking for specific property investments, where (in the context of the Bayswater Precinct) they can purchase an existing site, invest

further capital/redevelop the site and make a profit (from an increase in value). New businesses are likely to come from the adjoining areas or other parts of Melbourne’s South East and may be involved in the local service industry (as these businesses are also driven to stay within the local environment to access workers, suppliers, customers, etc.). There is also the opportunity, particularly with specialised facilities, that new businesses could be attracted to the area. In the case of redeveloped sites that increase

densities and offer potential for new uses, this can be particularly true (especially if the new business is attracted by the precinct’s distinct competitive advantages).

Marketing materials for the precinct will need to appreciate the unique perspective of each of the three audiences. As a minimum, a brochure highlighting the following elements should be generated (in combination with the associated branding):

Map of the precinct with major transport infrastructure highlighted as well as

proximity to East Link, Melbourne CBD and Melbourne Airport.

Inset map showing location of precinct relative to Melbourne CBD and in the context of Melbourne’s South East.

Table of facts about the precinct (i.e. total size in hectares, total number of businesses, employment, key sectors, etc.).

Overview of competitive advantages (summarising those listed in this report and in the survey).

Overview of redevelopment opportunities.


53

Inclusion of the vision for the precinct in the context of the Government’s support for

it.

Overview of the Bayswater Business Group.

Overview of any infrastructure initiatives.

Additionally, materials could be developed geared towards each of the target groups, expanding on the points highlighted above.

Engaging with the local businesses through the Bayswater Business Group as well as having one on one interviews with individual businesses within the precinct will be a good avenue to identify existing industries and potential expansion/retention projects. As highlighted in Section 5.1, various existing industries will continue to feel pressure from global competition and there are numerous existing industries that are likely to remain

for the foreseeable future. In such a manner, this engagement process can also be used to connect existing businesses to existing State or Federal business support programs (i.e. export grants, export advice, etc.).

Survey Results

The survey showed that over 20% of existing businesses do not currently export but are interest in exporting. In the manufacturing sector, over 40% of local businesses

are interested in exporting (but currently do not). The increase in manufacturing shows the local focus that is required for high value-adding, export competitive businesses highlighted in this report.

In order to reach property investors and developers, networking in such groups as the Property Council of Australia (PCA) and others would be recommended. PCA puts on a series of events throughout the year that attract a variety of property investors and developers. Additionally, targeting specific investors and developers in Melbourne (refer

Section 5.3) regarding the redevelopment opportunities and local initiatives to support future investment should be undertaken.

Other general marketing and promotional activities should be conducted in order to promote the precinct to the industry sectors for future tenants and new businesses. For these areas, the specific industry sectors highlighted in Section 5.2 should be targeted and these efforts should form part of a larger initiative to market the area and

be conducted in conjunction with State Government agencies, such as Invest Victoria and

Invest Assist. These activities could include attending major industry conferences or trade shows (in targeted areas).

In terms of priority, more efforts should be spent on existing businesses and property investors/developers rather than new tenants, given the nature of the precinct.

Duplication of Efforts

Both State and local governments in the Study Area have considerable existing efforts

and operations, particularly around existing businesses and business support. The purpose of this implementation plan is not to duplicate these efforts but to ensure there is a coordinated approach that focuses on the Bayswater Precinct and its unique environment. Strong coordination should be considered in terms of these future activities. At a state level, consideration should be given to other similar precincts and if a discreet role exists for State Government in terms of ongoing revitalisation and evolution of older industrial precincts, such as Bayswater, across the Melbourne

Metropolitan Region.

Naturally, subsequent activities around facilitating investment would be required after the marketing and promotional efforts identify potential investors or businesses. These activities would have to be closely coordinated with State and local government authorities and existing efforts by these organisations to facilitate investment.

10.4.3 Develop Governance Structure

Why: As the initiatives highlighted in this report are undertaken, it may arise that a

specific mechanism or vehicle is required to carry out all activities, which may provide the most efficient delivery of services.


54

What it addresses: The terms of reference for this project sought to evaluate a

‘collaborative networking mechanism’ is required to coordinate business and government efforts.


At this stage, without further input from the local business sector (and the future Bayswater Business Group and/or business reference panel), it is impossible to identify the effectiveness of a collaborative model.

Given all of the activities outlined in this implementation plan, it is conceivable that isolating responsibilities into a single vehicle could have its merits. Potentially as part of the Bayswater Business Group, there could be a role for government and industry funded personnel to carry out and lead all of the initiatives highlighted in this implementation

plan. The need for (and potential to fund) such a position would be more easily identified after further engagement and commitment from the local business sector.

Irrespective of this opportunities, the following potential governance structures would be available:

The local business association.

The local governments.

The State government.

A local chamber of commerce.

An independent group or organisation.

Or any deviation of these.

As the Precinct evolves and changes, its future needs and the duties of the vehicle will become more clearly defined and should be informed by ongoing dialogue with local businesses, owners and investors.


55

References

ABS (2010a). Number of Employed Persons by Industry of Employment (ANZSIC 93 all 4 digit classification levels) by all Place of Work LGAs in Australia. Data provided by Information Consultancy Services, Australian Bureau of Statistics, GPO Box 9817, Brisbane, QLD, 4001.

ABS (2010b). Australian Standard Geographical Classification (ASGC) Digital Boundaries (Intercensal), Australia, July 2010. Cat. No. 1259.0.30.001, Australian Bureau of Statistics, Canberra.

ABS (2012). Year Book Australia, 2012. Cat. No. 1301.0. Australian Bureau of Statistics, Canberra.

ABS (2013a). Australian System of National Accounts, 2012-13. Cat. No. 5204.0. Australian Bureau of Statistics, Canberra.

ABS (2013b). Research and Experimental Development, Businesses, Australia, 2011-12. Cat. No. 8104.0. Australian Bureau of Statistics, Canberra.

ABS (2013e). Australian National Accounts: Input-Output Tables – Electronic Publication, Final release 2009-10 tables. Cat. No. 5209.0.55.001, Australian Bureau of Statistics, Canberra.

CBRE (May 2014). Impact of Car Manufacturing Closure on Industrial Markets. CBRE

Global Research and Consulting.

CEDA (2014). Advanced Manufacturing: Beyond the production line. April 2014. Committee for Economic Development Australia. Melbourne, Australia.

DBI (2014). Terms of Reference – Bayswater Industrial Precinct Project – Precinct Map. Department of State Development Business and Innovation (DBI).

DTPLI (2009). Urban Development Program Annual Review. Department of Transport, Planning and Local Infrastructure (DTPLI).

DTPLI (2013). Urban Development Program 2013. Department of Transport, Planning and Local Infrastructure (DTPLI).

Google Earth Pro (2011). Google Earth Pro. Google. Available from: http://www.google.com/earth/. Last accessed: June 2014.

IBISWorld (2013). IBISWorld Industry Report C2440 - Household Appliance Manufacturing in Australia. Available from: http://www.ibisworld.com.au/. Last accessed 26 May 2014.

IBISWorld (2014a). IBISWorld Industry Report X0016 - Integrated Logistics in Australia. Available from: http://www.ibisworld.com.au/. Last accessed 23 May 2014.

IBISWorld (2014b). IBISWorld Industry Report X0014- Automotive Industry in Australia. Available from: http://www.ibisworld.com.au/. Last accessed 23 May 2014.

Knight Frank (2013). Melbourne Industrial Market Brief. Knight Frank research.

Maroondah Leader (2014). Major Corydon employer Denso announces end to local

manufacturing. Story by Thomas O’Byrne. 11 September 2014.

RBA (2014). Statement by Glenn Stevens, Governor: Monetary Policy Decision. Available

from: http://www.rba.gov.au/media-releases/2013/mr-13-25.html. Last accessed: 22 May 2014.

http://www.google.com/earth/

http://www.ibisworld.com.au/



http://www.rba.gov.au/media-releases/2013/mr-13-25.html


56

Appendix A: Precinct Assessment

Precinct by Sub-Area

Table A.1: Precinct Characteristics by Sub-Area

Area Location Building Types Average Allotment Sizes*

Observed Occupiers Land Uses Vacancy Levels General Presentation

1 North of Canterbury Road between Bayswater Road and Colchester Road

Accessible from: o Bayfield Road West o Dorset Road o Burgess Road o Gatwick Road

1-2 storey warehouse/offices

Large storage sheds

Big box retail sheds

Generally 2,000-3,000sqm

Larger allotments in eastern portion of sub-area just west of Colchester Road

16 lots >2.5ha

Fibremakers Business Park

Kenworth/Paccar Parts

Spotlight Good Guys Hardings Caravan

Storage

Warehouse, distribution and storage

Car yards/sales Retail of bulky

goods Industrial supplies Rural-industrial

Large parcels of land Vacant space for lease

including Fibremakers Business Park and Clive Peeters

Various units for lease along Bayfield Road West, Nicole Close and Gatwick Road

Mix of old and new buildings

Newer areas well-presented and aesthetically pleasing

2 Between Canterbury Road and Mountain Highway between Bayswater Road and Dorset Road

Also accessible from: o Longstaff Road

Generally 1 storey workshop/offices

1 storey warehouse/ storage sheds


Larger allotments east of Dandenong Creek

14 lots >2.5ha

Bunnings Siemens

Showroom retail Warehousing Some residential Community/sports

New warehouse/office space for sale and lease

Showrooms on large lot on Canterbury Road

Vacant parcels of land

Mix of old and new buildings

Generally fairly well presented

3 South of Mountain Highway between Scoresby Road and Dorset Road

Accessible from: o Dunlop Court o Jersey Road o Malvern Street o Corporate Boulevard


Newer warehouse/ office buildings are over 1 or 2 storeys


Larger allotments around Dunlop Court

6 lots >2.5ha

Veyance Technology

Johnson Tiles Tru Blu Oil

Industrial supplies Light industrial,

office Warehouse,

distribution and storage

Retail, cafés, takeaways

Units in Bayswater Business Park for sale and for lease

Various properties along Melrich Road

Various properties along Jersey Road, Malvern Street and Dunlop Court

Vacant parcels of land along Mountain Highway

Most intensive sub-area of industrial uses

Generally well presented with attractive streetscapes associated with new Bayswater Business Park

Modern developments (Corporate Boulevard and Jersey Road) attract more office-focused uses

4 North of Mountain Highway between Colchester Road and Wedmore Road

Accessible from: o Macquarie Place


Newer warehouse/ office buildings are over 1 or 2 storeys


Larger allotments around Kalman Drive

3 lots >2.5ha

GlaxoSmithKline Industrial supplies Light industrial,

office Warehouse,


Vacant parcels of land along Prospect Place and Kalman Drive (subdivided from GlaxoSmithKline property)

Various units for lease and

New subdivision along Kalman Drive, the area is generally well presented

Smaller, older workshops and


57

Area Location Building Types Average Allotment Sizes*

Observed Occupiers Land Uses Vacancy Levels General Presentation

o Elle Court o Kalman Drive

Showroom retail Commercial

sale in Macquarie Place and Mountain Highway

warehouses along Macquarie Place

5 East of Dorset Road, focused along Research Drive and Merrindale Drive

Larger 1 and 2 storey industrial facilities with a mix of warehouse /factory/retail showroom/office space

Generally 3,000sqm

Larger allotments around Merrindale Drive

6 lots >2.5ha

Denso Automotive Systems

Meyer Metec Driver

Training Centre

Research and development

Light industrial Commercial Warehouse,


2 large premises have recently sold after business relocations

Various units for lease and for sale along Merrindale Drive and Centre Way

Well presented, good streetscape

6 East of Colchester Road focused on either side of Canterbury Road

Excludes quarry at south east corner of Canterbury and Fussell Road

Accessible from: o Garden Street o Trade Way o Industry Circuit o Liverpook Road o Southfork Drive

Larger 1 and 2 storey industrial facilities with a mix of warehouse /factory/office space

Generally 3,000sqm

Larger allotments around Garden Street

22 lots >2.5ha

RFS Henkel RLA Polymers ARB 4x4

Accessories Mitech Eaton Vehicle Group

Industrial supplies Rural-industrial Bulky goods retail Commercial

1 large premises has recently sold after business relocation

Vacant parcels of land along Liverpool Road

Many sites have low site cover ratios, indicative of lower intensity of use

Various units for lease and for sale along Canterbury Road

Fair presentation and streetscape

Newer buildings on northern side of Canterbury Road off Garden Street

Past Liverpool Road more rural-industrial uses and less intense land use

7 On either side of Mountain Highway focused around Stud Road

Accessible from: o Sydney Road o Havelock Road o Michellan Court o Ricdanic Drive o Waldheim Road

1-2 storey warehouse/offices


Larger allotments on northern side of Mountain Highway

2 lots >2.5ha

Confoil Cameron Storage

and Distribution

Light industrial Industrial supplies Showroom retail Commercial

Vacant lots for sale on Ricdanic Drive

Various units for sale and for lease along Mountain Highway

Fair presentation and streetscape

*excluding sites >2.5ha Source: AEC


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Business Profile

Table A.2: Business Profile

Area No. of Businesses

Business Activity Size and Scale of Operations By Industry Sector By General Activity

1 >1,000 Storage and distribution

Local services Manufacturing Bulky goods retail Retail

Warehouse and distribution facilities Car yards/sales Retail of bulky goods Automotive parts Engineering fabrication, industrial

supplies Building materials (e.g. timber,

fencing, landscaping) Home improvements (e.g. furniture,

doors, kitchens, carpet, tiles, cabinets)

Mix of local and larger businesses

Large bulky goods operators

Mix of strata industrial units and separate allotments

2 >200 Storage and distribution

Local services Manufacturing Showroom retail Retail

Showroom retail Warehousing Some residential Community/sports

Mix of local businesses Some strata industrial

units

3 >1,700 Storage and distribution

Local services Manufacturing Commercial Showroom retail

Automotive and machinery and equipment

Industrial supplies Engineering fabrication Warehouse/ distribution services Home supplies Printing, marketing, signage,

graphics, publishing Sports, fitness Office supplies Some food, cafés, takeaways

Mix of local businesses Large proportion of

small allotments and strata industrial units


Local services Manufacturing Showroom retail

Automotive (incl. marine) machinery Engineering, electrical fabrication Building supplies (e.g. landscaping,

paving) Home supplies Printing, marketing, signage,

graphics, publishing

Mix of local businesses Mix of strata industrial

units and larger allotments


Manufacturing Commercial Local services

Health care Glazing Automotive supplies Engineering fabrication

Mix of local and national businesses

Higher proportion of larger allotments

Some smaller industrial lots


Local services Manufacturing Bulky goods retail

Electrical, lighting supplies Automotive (incl. marine) Industrial services (e.g.

engineering, plastics) Home supplies

Mix of local and national businesses

Predominantly larger premises

7 >200 Manufacturing Local services Retail

Automotive machinery Engineering Building supplies, e.g. bricks, carpet Printing Recruitment

Mix of local businesses Smaller allotments of

medium size businesses

Source: AEC


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Appendix B: Global Trends & Opportunities

The Australian industrial sector is changing. When considering future opportunities for the Bayswater Precinct it is important to understand the global trends and drivers impacting the Australian businesses and the implications for business and industry (both now and for the future) located in the Bayswater Industrial Precinct in Melbourne’s East.

This Chapter provides a high level overview of global trends, competitiveness of the Australian industrial sector, potential growth sectors and relevance for the Bayswater Precinct.

Global Trends and Competitiness of the Australian Industrial

Sector

A broad spectrum of factors influences industrial activity in Bayswater. While some of these are internal factors over which the local area have control, many are not. Significant influences on industrial activity come from outcomes at the global and

national level. Understanding the broader context in which Bayswater’s industrial sector operates is essential in identifying future opportunities and demand for industrial lands.

Globalisation and increased competition from overseas markets, the high Australian dollar, as well as the changing nature of consumer trends are all impacting the competitiveness of the Australian industrial sector. This combined with relatively higher input costs for Australian industry (when compared to other regions such as Asia) has meant that Australian business is facing significant competition and cost pressures from

international markets.

Figure B.1 and Figure B.2 demonstrates how the Australian trade profile is changing in response to changes in global competition and consumer trends. Over the last 20 years, Australian imports have increased significantly for industrial, capital goods and transport equipment. In contrast, Australian exports growth has been primarily focussed on resource based and associated export commodity groups such as fuels and industrial supplies. Food and beverage exports have also sustained moderate levels of export

growth.

These changes to Australian trade trends have been brought about by increased globalisation and competitiveness which has resulted in many of Australia’s traditional industrial sectors becoming high cost and non-competitive with businesses located in lower cost emerging economies. This structural shift in Australian business is further demonstrated through the historical declines in Australian employment in traditional

industry sectors and the rise of employment in the service sectors (refer to Figure B.3). This change signals the rise of the knowledge-based economy in Australia and highlights the importance that adaptability and innovation will play in future productivity and competitiveness of Australian business.

As this shift occurs many Australia’s businesses are seeking productivity gains. While some businesses have found productivity gains by offshoring production (as has been the case for the Australian automotive sector), others will gain from the competitive

advantage Australia has to offer through higher workforce skills, state of the art technology, relatively stable industrial relations (and traditionally low sovereign risk) and ease of establishing businesses making capital investment more feasible. Overall, Australian businesses will seek to innovate in response to change.


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Figure B.1. Value of Imports, Australia (by broad commodity grouping)

Source: ABS (2014).

Figure B.2. Value of Exports, Australia (by broad commodity grouping)

Source: ABS (2014).

$0

$1,000

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-$1,000

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Goods not elsewhere specified


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Figure B.3. Employment, 1985-2012

Source: ABS (2012)

Australian Industries of Opportunity

Analysis of 2006-2011 employment trends (ABS, 2012a) shows that key sectors of employment growth over the past five years have been (refer to Figure B.4):

Mining and resource industries.

Population based industries including health, construction, accommodation and food services, the arts and utility services.

Knowledge based service industries such as finance and insurance, professional scientific and technical services.

Some industrial sectors such as transport, postal and warehousing and wholesale trade.

Total employment across the manufacturing sector declined between 2006 and 2011.

Further breakdown of the historical manufacturing sector employment (refer to Figure 3.12) shows that manufacturing sector growth has occurred in downstream resource industry processing activities as well as food and beverage manufacturing and machinery

and equipment manufacturing.

Key sectors of decline in manufacturing have been:

Transport equipment.

Fabricated metal products.

Wood products.

Furniture and other products.

Polymer and other products.

Pulp, paper and converted paper products.

Printing.

The identified manufacturing industries in decline represent almost 60% of manufacturing employment in the Bayswater Study Area. Declining national industry trends present significant risk to employment in the Bayswater Precinct and the broader Melbourne

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Services Industry


62

Region unless individual businesses are able to respond to the changing marketplace

through diversification of product lines and productivity improvements.

Figure B.4. Australian Employment Growth, 2006-11


Figure B.5. Australian Manufacturing Employment Growth, 2006-11


-100.0% -80.0% -60.0% -40.0% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

Education

Public Administration and Safety

Administrative and Support Services

Agriculture

Manufacturing

Information, Media and Telecommunications

Wholesale Trade

Rental Hiring and Realestate Services

Retail Trade

Finance and Insurance Services

Other Services

Transport, Postal and Warehousing

Accommodation and Food Services

Arts and Recreational Services

Professional, Scientific and technical services

Construction

Health Care and Social Assistance


Mining

Employment Growth 2006-2011

-25.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

Textile, leather, clothing and footwear manufacturing

Printing

Pulp, paper and converted paper product manufacturing

Polymer product and rubber product manufacturing

Furniture and other manufacturing

Transport equipment manufacturing

Wood product manufacturing

Fabricated metal product manufacturing

Non-metallic mineral product manufacturing

Primary metal and metal product manufacturing

Machinery and equipment manufacturing

Basic chemical and chemical product manufacturing

Food product manufacturing

Beverage and tobacco product manufacturing

Petroleum and coal product manufacturing

Manufacturing, nfd


63

Looking ahead Australian industrial sector opportunities are likely to lie with businesses that that are able to take advantage of locational factors (e.g. proximity to primary product or population centres) and/or diversify product lines to leverage increasing

knowledge and high-technology to gain a market edge.

At a national level IBISworld forecasts (2014) estimate that a number of industries are likely to experience growth in employment (in Australia) over the next five years (2013-14 to 2018-19). Table B.1 shows the outlook for the manufacturing sector and Table B.2 shows estimates for the wholesale trade and transport, postal and warehousing sectors. In addition, IBISworld estimates indicate that almost all professional, scientific and technical service types of industries are also likely to experience growth (not represented

in the tables below).

Whilst many of these industries may not be suitable for attraction of investment to the Bayswater Precinct, it does highlight the diversity of industry opportunities and where industries are under pressure from global competition and rising costs, there does remain opportunity for growth through business innovation and delivery of unique products and services.

Table B.1: Australian Industry Outlook, Manufacturing Sector Employment

# Industry 5 year Employment Growth Outlook (%)


MANUFACTURING

1 Spirit Manufacturing 32.0% 31 Aluminium Rolling, Drawing, Extruding

3.9%

2 Timber Resawing and Dressing 11.0% 32 Pump and Compressor Manufacturing

3.8%

3 Gold and Other Non-Ferrous Metal Processing

10.8% 33 Industrial Gas Manufacturing 3.6%

4 Medical and Surgical Equipment Manufacturing

9.7% 34 Tea, Coffee and Other Food Manufacturing

3.3%

5 Artisanal Bakery Product Manufacturing

7.9% 35 Snack Food Manufacturing 3.3%

6 Seafood Processing 7.8% 36 Concrete Product Manufacturing

3.1%

7 Metal Furniture Manufacturing 7.7% 37 Measurement and Other Scientific Equipment Manufacturing

3.1%

8 Copper Tubes and Wire Manufacturing

7.7% 38 Aircraft Manufacturing and Repair Services

3.0%

9 Milk Powder Manufacturing 7.5% 39 Shipbuilding and Repair Services

3.0%

10 Boatbuilding and Repair Services

7.3% 40 Food Processing Machinery Manufacturing

3.0%

11 Machine Tool and Parts Manufacturing

7.0% 41 Ready-Mixed Concrete Manufacturing

2.9%

12 Paperboard Container Manufacturing

6.9% 42 Cheese Manufacturing 2.8%

13 Milk and Cream Processing 6.2% 43 Adhesive Manufacturing 2.6%

14 Heating, Cooling and Ventilation Equipment Manufacturing

6.1% 44 Structural Metal Product Manufacturing

2.6%

15 Iron and Steel Forging 6.0% 45 Aluminium Door and Window Manufacturing

2.5%

16 Cake and Pastry Manufacturing 5.8% 46 Cosmetics, Perfume and Toiletries Manufacturing

2.5%

17 Mining and Construction Machinery Manufacturing

5.7% 47 Mattress Manufacturing 2.3%

18 Polyester and Other Plastic Fibre Product Manufacturing

5.5% 48 Butter and Dairy Product Manufacturing

2.3%

19 Electric Lighting Equipment 5.5% 49 Iron Smelting and Steel 2.3%


64



MANUFACTURING

Manufacturing Manufacturing

20 Wood Chipping 5.4% 50 Clay Brick Manufacturing 2.3%

21 Prefabricated Wooden Building Manufacturing

5.3% 51 Automotive Electrical Component Manufacturing

1.9%

22 Wooden Furniture and Upholstered Seat Manufacturing

5.1% 52 Cereal, Pasta and Baking Mix Manufacturing

1.9%

23 Glass and Glass Product Manufacturing

5.0% 53 Wine Production 1.7%

24 Jewellery Manufacturing 5.0% 54 Wicker and Fibreglass Furniture Manufacturing

1.7%

25 Metal Coating and Finishing 5.0% 55 Fruit Juice Drink Manufacturing

1.3%

26 Ice Cream Manufacturing 4.9% 56 Structural Steel Fabricating 1.3%

27 Wooden Structural Component Manufacturing

4.4% 57 Cured Meat and Smallgoods Manufacturing

1.0%

28 Glasswool, Stone and Non-Metallic Mineral Product Manufacturing

4.4% 58 Flour and Grain Mill Product Manufacturing

0.8%

29 Fabricated Wood Manufacturing

4.1% 59 Poultry Processing 0.5%

30 Railway Equipment Manufacturing and Repair

4.0% 60 Soft Drink Manufacturing 0.4%

Source: IBISworld (2014)

Table B.2: Australian Industry Outlook, Wholesale Trade and Transport Sector Employment



WHOLESALE TRADE

1 Petroleum Product Whl. 11.4% 10 Commercial Vehicle Whl.

4.1%

2 Motor Vehicle Whl. 9.4% 11 Dairy Produce Whl. 3.7%

3 Medical and Scientific Equipment Whl.

7.6% 12 Cosmetics and Toiletry Whl.

3.2%

4 Cereal Grain Whl. 6.8% 13 Furniture and Floor Covering Whl.

2.4%

5 Timber Whl. 5.3% 14 Meat, Poultry and Smallgoods Whl.

1.3%

6 Metal and Mineral Whl. 5.3% 15 Textile Product Whl. 1.1%

7 Hardware Whl. 5.0% 16 General Line Grocery Whl.

1.0%

8 Household Appliance Whl. 4.4% 17 Wool Whl. 0.9%

9 Telecommunications and Other Electrical Goods Whl.

4.4% 18 Plumbing Goods Whl. 0.4%

TRANSPORT POSTAL AND WAREHOUSING

1 Toll Road Operators 18.0% 12 Rail, Air and Sea Freight Forwarding

6.4%

2 Rail Freight Transport 17.3% 13 Domestic Airlines 6.0%

3 Courier Pick-up and Delivery Services

14.2% 14 Container Repair and Wool Dumping

5.7%

4 Pipeline Transport 12.7% 15 Water Freight Transport

4.8%

5 Urban Bus and Tramway Transport

11.6% 16 Water Passenger Transport

4.6%

6 Road Freight Forwarding 11.2% 17 Scenic and Sightseeing Transport

4.5%

7 Port Operators 11.1% 18 Airport Operations 2.7%


65



8 Rail Passenger Transport 10.7% 19 International Airlines 2.0%

9 Customs Agency Services 8.2% 20 Non-Scheduled Air Transport

1.3%

10 Removalists 6.8% 21 General Warehousing and Cold Storage

1.0%

11 Taxi and Limousine Transport 6.5% 22 Stevedoring Services 0.3%

Source: IBISworld (2014)

Implications for Bayswater

With the shift in the nature of the Australian industrial sector toward a knowledge based service economy many of the jobs that have traditionally occupied the Bayswater Precinct could be considered to be ‘at risk’. In response to the changing global business landscape, some Bayswater Precinct businesses may depart, however others will look to innovate and diversify their product and market base in anticipation of changes to the Australian industrial sector in order to remain competitive.

As the nature of industrial activity changes in Australia, there will be opportunities to attract new investment to the Bayswater Industrial Precinct. These opportunities are likely to be focused on attraction of smaller businesses looking for expansion opportunities in a variety of niche manufacturing types of activities through to distribution, wholesale and retail trade. Attraction of higher knowledge based industries, such as specialised high-tech and scientific equipment manufacturing, scientific and laboratory operations, chemical and pharmaceuticals may also be a key area of

opportunity.


66

PAGE LEFT INTENTIONALLY BLANK

Bayswater Business Survey

DSDBI

Final Report v1.1

October, 2014

APPENDIX B

Bayswater Business Survey Final Report v1.1

i

Document Control

Job ID: 23627BNE

Job Name: Bayswater Business Survey

Client: DSDBI

Client Contact: Gabrielle Nime

Project Manager: Simon Smith

Email: [email protected]

Telephone: 07 3831 0577

Document Name: AEC Report - DSDBI Bayswater Business Survey Draft Report.docx

Last Saved: 7/10/2014 4:59 PM

Version Date Reviewed Approved

Draft Report v1.0 10/09/2014 SS SS

Final Report v1.1 8/10/2014 SS SS

Disclaimer:

Whilst all care and diligence have been exercised in the preparation of this report, AEC Group Pty Ltd does not warrant the accuracy of the information contained within and accepts no liability for any loss or damage that may be suffered as a result of reliance on this information, whether or not there has been any error, omission or negligence on the part of AEC Group Pty Ltd or their employees. Any forecasts or projections used in the analysis can be affected by a number of unforeseen variables, and as such no warranty is given that a particular set of results will in fact be achieved.


ii

Executive Summary

Background

The Bayswater/ Bayswater North/ Kilsyth Industrial Precinct (the Precinct) is located in

eastern Melbourne at the confluence of three municipalities - Knox, Maroondah and Yarra Ranges. The industrial area is approximately 730 hectares and accommodates over 4,500 businesses, employing almost 40,000 people. Traditionally, the Bayswater Industrial Precinct has accommodated a high number of car manufacturing and related business as well as other manufacturing-type businesses. The area has gradually evolved to accommodate less manufacturing activity and increased warehousing, storage and

distribution type activities.

The Australian manufacturing sector is undergoing a period of significant change. Globalisation, high labour and operational costs and fierce import competition in Australia has contributed to traditional manufacturing operations relocating offshore, with the Australian automotive industry being the latest casualty of intense global competition. The

outcome of this is a need for manufacturing in Australia to move to a ‘smarter’ and ‘knowledge’ based rather than process based model.

The changing trends of the Australian manufacturing sector pose an immediate threat to jobs and business in the Bayswater Industrial Precinct, which has traditionally been dominated by these key sectors under threat.

In anticipation of these changes to composition likely to occur in the Bayswater Industrial Precinct, and potential for loss of jobs for the region, the Knox, Maroondah and Yarra Ranges Councils, Melbourne East RDA, Department of State Development, Business and Innovation, and the Metropolitan Planning Authority have undertaken a proactive response

to change for the region and see this as an opportunity to reposition and revitalise the Bayswater Industrial Precinct. A competitive review of the precinct is currently underway with future recommendations regarding the redevelopment of the precinct. As a part of this future program, a survey of existing businesses, tenants, building and land owners is required to identify their desires, aspirations and future direction they see the precinct going.

Project Approach

Quantitative surveys were undertaken with 200 businesses from the Bayswater precinct from 8th August to 3rd September 2014. Computer Aided Telephone Interviewing (CATI) surveys were administered with businesses using random sampling from a business

database provided by the Department of State Development, Business and Innovation (DSDBI).

Key Findings

Business Profile

Businesses surveyed were most commonly involved in the manufacturing sector, which accounted for 35.9% of all businesses surveyed. A further 12.1% were active in the retail trade sector. Businesses surveyed most commonly had a turnover of between $1 million and $4 million in 2013-14. Persons surveyed for this project tended to be either the general

manager/ owner (39.0%) or director/ partner (23.0) of the business.

Employee Profile

Most sites surveyed in the Bayswater precinct employed fewer than 20 employees with

46% having 1-4 FTE1 staff and 34.5% having 5-19 FTE staff. Those surveyed that had sites outside the precinct (associated with local businesses) also had small numbers of employees at those sites with 26.2% of businesses having fewer than 20 FTE at other sites

1 FTE = Full Time Equivalent, which equates to one employee working for 38 hours each week.


iii

across Victoria, 21.2% of businesses having fewer than 20 FTE at other sites in Australia

(excluding Victoria) and 16.3% having fewer than 20 FTE offshore.

The majority (53.0%) of businesses indicated their FTE levels had remained about the same over the past two years. And half, 50.5%, expected FTE levels to remain about the

same over the coming two years. Businesses who anticipated a change in FTE levels over the coming two years were most likely to anticipate an increase by 10% - 25% (9.5%) and an increase by less than 10% (9.0%) than any other degree of increase or decrease.

Over the coming 10 years, businesses generally do not anticipate many skills shortages for their business. The most common expectation for skills shortage in the next 10 years is for technicians and trades workers (indicated by 28.5% of businesses).

Business Location Profile

Almost all (90.5%) respondents to the survey were located in their business’ head or principal office. The most common reasons for choosing their business’ location were proximity to customers/ clients (12.5%) and operating costs (8.5%). Other reasons included being close to home and purchasing/ continuing a business which was already

established in the precinct.

Respondents were mostly in offices of 1-200m2 (17.5%) or 201-400m2 (9.0%). The most

common size of the business site for respondents in the Bayswater precinct was between 201 – 400m2 (6.5%) followed by 600 – 1,000m2 and 1,001 – 2,000m2 (each at 5.0%).

Most respondents (57.8%) had leased their premises and most leases were expected to expire within 2-5 years (30.4%) or 6 months – 2 years (22.6%). Most businesses had been long-term residents of the precinct, with 51.8% of respondents indicating they had been in their current location for 10+ years.

Most businesses are very likely to remain in the precinct for at least the next 1 to 5 years.

A further 38.5% are very likely to remain in the precinct for the next 10 years. Over half (52.5%) of businesses who had indicated they were less than very likely to remain in the precinct over the coming 10 years suggested that if they were to move from their current site they were not at all likely to remain in the Bayswater precinct. However, when asked where they would move to, 52.1%) indicated they would stay within the Bayswater area. The primary reasons cited by businesses for moving included rental costs (12.0%) and

better infrastructure (4.5%). The most common other reasons included no plans to move

(35.9%) and larger premises (15.4%).

Infrastructure Iniatives

In weighted average terms, the five most important infrastructure initiatives for survey respondents were:

Access to high speed internet (weighted average = 3.8, neutral-somewhat important).

Improved road conditions and configuration (weighted average = 3.7, neutral-

somewhat important).

Improvement to the overall look and presentation of the Bayswater precinct (weighted average = 3.2, neutral-somewhat important).

Railway lines underpass program (weighted average = 2.6, not very important-neutral).

Better connection with surrounding rail infrastructure (weighted average = 2.5, not

very important-neutral).

Location Advantages & Disadvantages

The most prominent strengths of the precinct cited by survey respondents included access to major roads/ highways (49.5%), proximity to customers/ clients (42.0%) and proximity to suppliers (30.0%). The most prominent limitations of the precinct cited by survey respondents included proximity to customers/ clients (10.5%), access to major roads/ highways (10.0%) and operating costs (8.0%).

A quarter of respondents (26.0%) suggested there was very little needing to be done to

improve the Bayswater Precinct. A further 10% did not make any suggestions.


iv

Key suggestions made generally centred on transport access, broadband and IT

connectivity, general aesthetics, crime and safety, skills and education, land use and mix, costs, processes/ Council’s role and business attraction.

Business Relationships

Over 30% of business’ suppliers are within the immediate regions (Melbourne Southeast region) and a further 21.0% were within the state. Customers for local businesses tend to be from the immediate regions (Melbourne Southeast region) (27.5%) and the Melbourne Metropolitan Region (26.5%).

A quarter (25.3%) of businesses surveyed currently export and a further 21.1% are interested in exporting. Almost 40% (39.2%) of businesses surveyed did not have any barriers to export. Key barriers to export for businesses surveyed were the nature of

business (15.0%) and cost (11.5%).


v

Table of Contents

DOCUMENT CONTROL .......................................................................................... I

EXECUTIVE SUMMARY ......................................................................................... I

TABLE OF CONTENTS........................................................................................... V

1. INTRODUCTION .......................................................................................... 1

1.1 BAKGROUND ................................................................................................... 1

1.2 PROJECT METHODOLOGY ...................................................................................... 1

2. BUSINESS PROFILE ..................................................................................... 3

2.1 BUSINESS INDUSTRY .......................................................................................... 3

2.2 ROLE/POSITION OF RESPONDENT ........................................................................... 4

2.3 ANNUAL TURNOVER ........................................................................................... 4

3. EMPLOYEE PROFILE .................................................................................... 5

3.1 NUMBER OF FTE AT BUSINESS SITE ........................................................................ 5

3.2 NUMBER OF FTE AT OTHER SITES ACROSS VICTORIA .................................................... 5

3.3 NUMBER OF FTE IN AUSTRALIA (EXCLUDING VICTORIA) ................................................. 6

3.4 NUMBER OF FTE OVERSEAS .................................................................................. 7

3.5 CHANGE IN FTE IN LAST 2 YEARS ........................................................................... 8

3.6 CHANGE IN FTE IN NEXT 2 YEARS .......................................................................... 8

3.7 SKILLS SHORTAGES IN NEXT 10 YEARS .................................................................... 9

4. BUSINESS LOCATION PROFILE ................................................................. 11

4.1 HEAD/PRINCIPAL OFFICE ................................................................................... 11

4.2 PRIMARY REASON FOR CURRENT LOCATION .............................................................. 11

4.3 FLOORSPACE OF CURRENT OFFICE/BUILDING ............................................................ 12

4.4 LAND AREA OF SITE ......................................................................................... 12

4.5 OWNED OR LEASED ......................................................................................... 13

4.6 LENGTH OF TIME IN CURRENT LOCATION ................................................................. 14

4.7 LIKELIHOOD OF STAYING IN CURRENT LOCATION ........................................................ 15

4.8 LIKELYHOOD OF MOVING WITHIN BAYSWATER ........................................................... 16

4.9 LIKELY RELOCATION LOCATIONS ........................................................................... 16

4.10 PRIMARY REASON FOR MOVING ............................................................................ 17

5. INFRASTRUCTURE INITIATIVES ............................................................... 19

6. LOCATION ADVANTAGES & DISADVANTAGES ........................................... 20

6.1 STRENGTHS OF CURRENT LOCATION ...................................................................... 20

6.2 LIMITATIONS OF CURRENT LOCATION ..................................................................... 21

6.3 METHODS FOR IMPROVING BAYSWATER ................................................................... 22

7. BUSINESS RELATIONSHIPS ...................................................................... 24

7.1 SUPPLIERS.................................................................................................... 24

7.2 CUSTOMERS .................................................................................................. 24

7.3 BUSINESS SUPPORT ......................................................................................... 25

7.4 EXPORTS...................................................................................................... 26

7.5 BARRIERS TO EXPORTS ..................................................................................... 26

APPENDIX A: SURVEY INSTRUMENT ................................................................. 28

APPENDIX B: VERBATIM RESPONSES ............................................................... 33


1

1. Introduction

This chapter provides an introduction to the project and document. It also outlines the project methodology undertaken.

1.1 Background

The Bayswater/ Bayswater North/ Kilsyth Industrial Precinct (the Precinct) is located in eastern Melbourne at the confluence of three municipalities - Knox, Maroondah and Yarra Ranges. The industrial area is approximately 730 hectares and accommodates over 4,500 businesses, employing almost 40,000 people. Traditionally, the Bayswater Industrial Precinct has accommodated a high number of car manufacturing and related business as

well as other manufacturing-type businesses. The area has gradually evolved to accommodate less manufacturing activity and increased warehousing, storage and distribution type activities.

The Australian manufacturing sector is undergoing a period of significant change.

Globalisation, high labour and operational costs and fierce import competition in Australia has contributed to traditional manufacturing operations relocating offshore, with the Australian automotive industry being the latest casualty of intense global competition. The

outcome of this is a need for manufacturing in Australia to move to a ‘smarter’ and ‘knowledge’ based rather than process based model.

The changing trends of the Australian manufacturing sector pose an immediate threat to jobs and business in the Bayswater Industrial Precinct, which has traditionally been dominated by these key sectors under threat.

In anticipation of these changes to composition likely to occur in the Bayswater Industrial Precinct, and potential for loss of jobs for the region, the Knox, Maroondah and Yarra

Ranges Councils, Melbourne East RDA, Department of State Development, Business and Innovation, and the Metropolitan Planning Authority have undertaken a proactive response to change for the region and see this as an opportunity to reposition and revitalise the Bayswater Industrial Precinct. A competitive review of the precinct is currently underway with future recommendations regarding the redevelopment of the precinct. As a part of this future program, a survey of existing businesses, tenants, building and land owners is

required to identify their desires, aspirations and future direction they see the precinct going.

1.2 Project Methodology

The main elements of the methodology utilised in executing the study were as follows.

Attended a teleconference inception meeting to discuss the objectives of the study, outline study timeframe, confirm deliverables and identify relevant project personnel.

Designed a survey instrument in collaboration with RDA project management team.

Developed a survey database to be administered via computer aided telephone interviewing (CATI).

Undertook telephone surveys with the business community to ensure a statistically valid sample size.

Monitored survey staff performance and completion rates to achieve the required

target.

Clean data and undertook analysis of the results.

Produced a detailed report detailing the results.

Key components of note associated with the survey process included:

The survey instrument was designed in conjunction with Department staff and was administered via CATI. Telephone surveys were conducted amongst randomly selected

businesses in the Bayswater Precinct.


2

The survey database was constructed using AEC’s in-house Computer Assisted

Telephone Interviewing (CATI) systems and all CATI surveys were undertaken in-house by experienced AEC staff and supervisors.

CATI surveys were administered from 8th August to 3rd September between the hours

of 9am and 5pm on weekdays. Survey results were processed using excel.

A total of 200 surveys were undertaken. Given the estimated 4,500 businesses operating in the precinct, this response yields a confidence interval +/-6.77 at a 95% confidence level.


3

2. Business Profile

This section profiles the surveyed businesses. The profile identifies businesses across many characteristics including their industry sector and annual turnover.

2.1 Business Industry

Surveyed businesses represented a cross-section of industries. The highest represented industries included manufacturing (35.9%) and retail trade (12.1%).

Table 2.1. Business Industry

Response Proportion of Total

Manufacturing 35.9%

Retail Trade 12.1%

Construction 5.8%

Wholesale Trade 5.8%

Professional, Scientific and Technical Services 5.3%

Administrative and Support Services 5.3%

Arts and Recreation Services 2.9%

Transport, Postal and Warehousing 2.4%

Accommodation and Food Services 1.9%

Information Media and Telecommunications 1.9%

Education and Training 1.9%

Electricity, Gas, Water and Waste Services 1.5%

Financial and Insurance Services 1.5%

Rental, Hiring and Real Estate Services 1.5%

Health Care and Social Assistance 1.5%

Other Services 8.3%

Don’t Know / Unsure 0.5%

Refused / No Answer 3.9%

Total 100.0%

Q3: What is the core business activity for this business?

Source: AEC

Figure 2.1. Business Industry

Q3: What is the core business activity for this business? Source: AEC

35.9%

12.1%5.8%5.8%

5.3%

5.3%

2.9%

2.4%

1.9%

1.9%

1.9%

1.5%

1.5%

1.5%

1.5%8.3%

0.5% 3.9%Manufacturing

Retail Trade

Construction

Wholesale Trade

Professional, Scientific and Technical Services

Administrative and Support Services

Arts and Recreation Services

Transport, Postal and Warehousing

Accommodation and Food Services

Information Media and Telecommunications

Education and Training

Electricity, Gas, Water and Waste Services

Financial and Insurance Services

Rental, Hiring and Real Estate Services

Health Care and Social Assistance

Other Services

Don’t Know / Unsure

Refused / No Answer


4

2.2 Role/Position of Respondent

The majority of respondents to the survey were either the General Manager/ Owner (39.0%) or Director/ Partner (23.0%) of the business they were responding on behalf of. Other roles of persons surveyed included Administration Managers (8.0%) and Managers (7.5%).

Figure 2.2. Role/ Position of Respondent

Q4: What is your role/position within the business?

Source: AEC

2.3 Annual Turnover

Most respondents (55.5%) did not know the annual turnover of their business. Of those

who did know the annual turnover of their business, the most prominent turnover category was $1M-$4.99M in 2013-14, accounting for 11.5% of all respondents.

Figure 2.3. Annual Turnover

Q5: What was the approximate annual turnover of your business in the 2013/2014 financial year? Source: AEC

39.0%

23.0%

8.0%

7.5%

6.5%

2.5%

1.5%

10.0%

2.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

General Manager / Owner

Director / Partner

Administration Manager

Manager

Manager of Operations

Finance Manager

CEO

Other

Refused / Not Answered

Proportion of Respondents (%)

11.5%

11.0%

10.5%

6.5%

4.0%

55.5%

1.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

$1M-$4.99M

$100K-$499K

$5M +

$500K-$999K

Less than $100K





5

3. Employee Profile

This section profiles the employees of surveyed businesses. The profile identifies number of employees, recent and anticipated changes in employee levels and potential skills shortages.

3.1 Number of FTE at Business Site

The majority (80.5%) of businesses surveyed are small businesses with fewer than 20 staff at their current business site. Approximately 46.0% of businesses employed between 1 and 4 FTE2 staff and a further 34.5% of responding businesses employed between 5 and 19 FTE staff. Very few (approximately 2%) of businesses employed more than 100

employees.

Figure 3.1. Number of Employees at Business Site

Q6: Approximately, how many full time equivalent (FTE) staff work at this business site? Source: AEC

Table 3.1. Number of Employees at Business Site

Response Number Proportion of Total (%)

1 - 4 92 46.0%

5 - 19 69 34.5%

20 - 99 29 14.5%

100 - 199 2 1.0%

500 - 1,000 2 1.0%

Don’t Know / Unsure 6 3.0%

Total 200 100%

Q6: Approximately, how many full time equivalent (FTE) staff work at this business site?

Source: AEC

3.2 Number of FTE at Other Sites Across Victoria

Businesses surveyed which also had an office outside the Bayswater precinct, but within the state of Victoria, tended to employ at further 5-19 FTE employees beyond those employed in Bayswater. Approximately 16.4% of businesses surveyed noted this was the

2 FTE = Full Time Equivalent, which equates to one employee working for 38 hours each week.

46.0%

34.5%

14.5%

1.0%

1.0%

3.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

1 - 4

5 - 19

20 - 99

100 - 199

500 - 1,000




6

case. A large number were unsure or did not have any offices in the rest of Victoria

(54.1%).

Figure 3.2. Number of Employees at Other Business Sites in Victoria

Q6a: Approximately, how many full time equivalent (FTE) staff work at other business sites across Victoria? Note: proportion of total respondents.

Source: AEC

3.3 Number of FTE in Australia (Excluding Victoria)

Businesses surveyed which also had an office outside Victoria, but within Australia, tended

to employ at further 1 to 4 FTE or 20 to 99 FTE at offices outside Victoria. Approximately 13.5% of businesses surveyed noted this was the case (for each category). A large number were unsure or did not have an office elsewhere in Australia (59.6%).

9.8%

16.4%

9.8%

3.3%

0.0%

1.6%

1.6%

54.1%

3.3%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

1 - 4

5 - 19

20 - 99

100 - 199

200 - 499

500 - 1,000

More than 1,000





7

Figure 3.3. Number of Employees at Other Business Sites in Australia

Q6b: Approximately, how many full time equivalent (FTE) staff work at business sites outside Victoria but within Australia?

Note: proportion of total respondents. Source: AEC

3.4 Number of FTE Overseas

Businesses surveyed which also had an office outside Australia, tended to employ at further 1 to 4 FTE in their offshore operations. Approximately 11.6% of businesses surveyed noted this was the case (for each category). A large number were unsure or did not have an office

offshore (79.1%).

Figure 3.4. Number of Employees at Other Business Sites outside Australia

Q6c: Approximately, how many full time equivalent (FTE) staff work at business sites overseas? Note: proportion of total respondents. Source: AEC

13.5%

7.7%

13.5%

1.9%

0.0%

0.0%

1.9%

59.6%

1.9%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

1 - 4

5 - 19

20 - 99

100 - 199

200 - 499

500 - 1,000

More than 1,000




11.6%

4.7%

4.7%

0.0%

0.0%

0.0%

0.0%

79.1%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

1 - 4

5 - 19

20 - 99

100 - 199

200 - 499

500 - 1,000

More than 1,000




8

3.5 Change in FTE in Last 2 Years

The majority (53.0%) of businesses surveyed indicated that the number of FTE staff working at their site in the Bayswater precinct had remained about the same over the last two years. A further 30.5% indicated the number of FTE staff had decreased in the last two years.

Figure 3.5. Change in FTE in Past 2 Years

Q7: In the last 2 years, has the number of FTE employees at this site increased, decreased or remained about the same?

Source: AEC

3.6 Change in FTE in Next 2 Years

The majority (50.5%) of businesses surveyed indicated that the number of FTE staff working at their site in the Bayswater precinct is expected to remain about the same over the next two years. A further 29.5% indicated the number of FTE staff is expected to increase in the next two years.

53.0%

30.5%

13.0%

3.5%

Remained about the Same

Decreased

Increased

Don't Know / Unsure


9

Figure 3.6. Change in FTE in Next 2 Years

Q8: In the next 2 years, do you anticipate the number of FTE employees at this site will increase, decrease or remain about the same? Source: AEC

The degree to which employment levels were expected to change were mostly mild changes with the most common expectations being an increase by 10% - 25% (9.5%), an increase by less than 10% (9.5%) and an increase by 25% - 50% (6.5%).

Table 3.2. Degree of Change in FTE Employment


Increase by Less than 10% 9.0%

Increase by 10% - 25% 9.5%

Increase by 25% - 50% 6.5%

Increase by More than 50% 3.5%

Increase - Don't Know / Unsure 1.0%

Remain the Same 46.5%

Decrease by Less than 10% 2.5%

Decrease by 10% - 25% 5.5%

Decrease by 25% - 50% 0.5%

Decrease by More than 50% 1.5%

Decrease - Don't Know / Unsure 1.5%

Don't Know/ Unsure / Not Answered 12.5%

Total 100.0%

Q9: And by approximately what proportion do you think the employees at this site will increase or decrease in the next 2 years? Source: AEC

3.7 Skills Shortages in Next 10 Years

Very low levels of skills shortages are anticipated by surveyed businesses over the coming 10 years. The occupation most likely to be in shortage in 10 years was that of technicians and trades workers which 28.5% of respondents anticipated would be in shortage. The

second most likely occupation identified by surveyed businesses to be in shortage in 10 years’ time was machinery operators and drivers (6.5%).

50.5%

29.5%

11.5%

8.0% 0.5%

Remain about the Same

Increase

Decrease

Don't Know / Unsure



10

Figure 3.7. Skills Shortages in 10 Years’ Time

Q10: In what occupations do you think you will suffer skills shortages over the next 10 years?

Note: Multiple responses allowed Source: AEC

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

Managers

Professionals

Technicians and Trades Workers

Community and Personal Service Workers

Clerical and Administrative Workers

Sales Workers

Machinery Operators and Drivers

Labourers

Other


Yes No


11

4. Business Location Profile

This section profiles the location of businesses. The profile includes the primary reason for choosing its current location, if the current location is the head office, the floor space of the office and land, and potential reasons for moving location.

4.1 Head/Principal Office

Overwhelmingly (90.5%), businesses surveyed were the head/principal office.

Figure 4.1. Head/Principal Office

Q11: Is this site the Head/Principal Office for your business? Source: AEC

4.2 Primary Reason for Current Location

The most commonly cited primary reason for choosing their business’ current location was proximity to customers/clients (12.5%) and operating costs (8.5%).

Figure 4.2. Primary Reasons for Location Choice

Q12: What was the primary reason for your business choosing its current location? Note: Multiple responses allowed.

Source: AEC

90.5%

9.0%0.5%

Yes

No

Don't Know / Unsure

7.0%

60.0%

0.0%

0.5%

1.0%

3.5%

5.5%

6.0%

6.5%

7.0%

8.5%

12.5%

0.0% 20.0% 40.0% 60.0% 80.0%


Other

Relationship with the Council and/or state…

Proximity to Universities/colleges

Proximity to amenities

Calibre / type of other businesses

Proximity to or access to skilled workers

Reputation of the Bayswater precinct

Proximity to suppliers

Access to major roads / highways

Operating costs

Proximity to customers/clients



12

Reasons cited by respondents who indicated another reason for locating in the Bayswater

precinct, included being close to home (36.6%), the purchase of an established business (34.1%) or affordability or availability of land/building (13.8%).

Figure 4.3. Primary Reasons for Location Choice, “Other” Reasons

Q12: What was the primary reason for your business choosing its current location? “Other” responses. Source: AEC

4.3 Floorspace of Current Office/Building

The most common size of office / building for respondents was between 1 – 200 m2 (17.5%) followed by 201-400 m2 (9.0%). However, the majority of respondents (52.0%)

didn’t know or did not respond to the question.

Table 4.1. Floorspace of Current Office / Building

Response Number Proportion of Total

1-200 m2 35 17.5%

201-400 m2 18 9.0%

401-600 m2 7 3.5%

600-1,000 m2 11 5.5%

1,001-2,000 m2 13 6.5%

2,001-3,000 m2 5 2.5%

3,001 + m2 7 3.5%

Refused/ Not answered 104 52.0%

Total 200 100.0%

Q13: What is the floorspace of your office/building (if known)?

Source: AEC

4.4 Land Area of Site

The most common size of the business site for respondents in the Bayswater precinct was between 201 – 400 m2 (6.5%) followed by 600 – 1,000 m2 and 1,001 – 2,000 m2 (each at 5.0%). However, the majority of respondents (66.0%) didn’t know or did not respond to the question.

0.8%

0.8%

2.4%

4.1%

7.3%

13.8%

34.1%

36.6%

0.0% 10.0% 20.0% 30.0% 40.0%

Congestion

Personal

Need / Opportunity for business

Proximity to other businesses

Locational benefits

Affordability and availability of land/ building

Business was established here

Convenience / Close to home



13

Table 4.2. Land Area of Site

Response Number Proportion of Total

1-200 m2 6 3.0%

201-400 m2 13 6.5%

401-600 m2 6 3.0%

600-1,000 m2 10 5.0%

1,001-2,000 m2 10 5.0%

2,001-3,000 m2 8 4.0%

3,001 + m2 15 7.5%

Refused/ Not answered 132 66.0%

Total 200 100.0%

Q13a: What is the land area of your site (if known)? Source: AEC

4.5 Owned or Leased

The majority of respondents (57.8%) leased their premises in the Bayswater precinct. A further 35.2% of respondents owned their premises.

Figure 4.4. Tenure of Premises

Q14: Is this site owned by the business or leased?

Source: AEC

Those who are leasing their site tended to have a lease which expires in 2-5 years (30.4%) or 6 months – 2 years (22.6%). Very few respondents had a long term, 10+ years, lease (3.5%).

57.8%

35.2%

7.0%

Leased

Owned

Don't Know / Unsure


14

Figure 4.5. Time until Lease Expiry

Q14a: When does the lease expire?

Source: AEC

4.6 Length of Time in Current Location

The majority of respondents have been long-term residents of the Bayswater precinct, with 51.8% of respondents indicating they had been in their current location for 10+ years. A further 22.0% of respondents indicated they had been in their current location for 5-10 years.

Figure 4.6. Time in Current Location

Q15: Approximately how long has your business been in operation at the current location?

Source: AEC

17.4%

22.6%

30.4%

7.0%

3.5%

19.1%

Less than 6 months6 months - 2 years2-5 years5-10 years10+ yearsDon't Know / Unsure

51.0%

22.0%

11.0%

8.5%

3.0% 3.0%1.5%

10+ years

5-10 years

2-5 years

6 months - 2 years

Less than 6 months

Don't Know / Unsure

Refused / Notanswered


15

4.7 Likelihood of Staying in Current Location

Overall, respondents have indicated they are very likely to remain in their current location. In 1 years’ time, approximately 86.0% of respondents indicate it is very likely they will still be in their current location. In 5 years’ time, approximately 55.5% of respondents indicate it is very likely they will still be in their current location. Certainty surrounding their location falls as the time frame is extended, and 38.5% of respondents indicate they are very likely to remain in their current location in 10 years’ time.

Figure 4.7. Likelihood of Staying in Current Location

Q16: On a scale of 1 to 5 with 5 being very likely and 1 being very unlikely to stay at the present location, how likely is your

business to stay in its current location over the next 1 year, 5 years and 10 years? Source: AEC

Though smaller businesses were more likely to indicate they anticipate staying in the precinct in the coming year than medium size businesses, these businesses tended to be less certain about their location in the coming five to ten years. By ten years, under a third of smaller businesses (1-4 employees) anticipate to be in the Bayswater precinct.

Table 4.3. Likelihood of Staying by Business Size

Likelihood of Staying

Size of Business (Employment)

1 – 4

5 - 19

20 - 99

100 - 199

200 - 499

500 - 1,000

More than 1,000 Unsure

1 Year

Very Unlikely 3.3% 4.3% 3.4% 0.0% 0.0% 0.0% 0.0% 0.0%

Somewhat Unlikely 3.3% 2.9% 3.4% 0.0% 0.0% 0.0% 0.0% 16.7%

Neutral 2.2% 1.4% 6.9% 0.0% 0.0% 0.0% 0.0% 0.0%

Somewhat Likely 4.3% 2.9% 3.4% 0.0% 0.0% 0.0% 0.0% 0.0%

Very Likely 85.9% 88.4% 79.3% 100.0% 0.0% 100.0% 0.0% 83.3%

Don't Know/Unsure 1.1% 0.0% 3.4% 0.0% 0.0% 0.0% 0.0% 0.0%

5 Years

Very Unlikely 13.0% 10.1% 3.4% 0.0% 0.0% 0.0% 0.0% 16.7%


Neutral 5.4% 13.0% 10.3% 0.0% 0.0% 0.0% 0.0% 50.0%

Somewhat Likely 15.2% 8.7% 13.8% 0.0% 0.0% 0.0% 0.0% 0.0%

Very Likely 53.3% 56.5% 58.6% 100.0% 0.0% 100.0% 0.0% 33.3%

Don't Know/Unsure 5.4% 5.8% 6.9% 0.0% 0.0% 0.0% 0.0% 0.0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1 Year

5 years

10 Years


Don't Know Very Unlikely Somewhat Unikely Neutral Somewhat Likely Very Likey No Response


16

Likelihood of Staying


1 – 4

5 - 19

20 - 99

100 - 199

200 - 499

500 - 1,000

More than 1,000 Unsure

10 Years

Very Unlikely 22.8% 14.9% 3.4% 0.0% 0.0% 0.0% 0.0% 33.3%


Neutral 12.0% 16.4% 27.6% 0.0% 0.0% 0.0% 0.0% 33.3%

Somewhat Likely 10.9% 6.0% 3.4% 0.0% 0.0% 0.0% 0.0% 0.0%

Very Likely 32.6% 44.8% 44.8% 50.0% 0.0% 100.0% 0.0% 16.7%

Don't Know/Unsure 15.2% 11.9% 10.3% 50.0% 0.0% 0.0% 0.0% 16.7%

Note: there are no businesses with between 200 and 499 employees or More than 1,000 employees in Bayswater. Source: AEC

4.8 Likelihood of Moving within Bayswater

Businesses who gave a score less than very likely on the above question indicated any move from their current site would be not at all likely to be to a site within the Bayswater

precinct. Approximately 52.5% of respondents indicated it was not at all likely and a further 16.7% of respondents indicated it was not very likely.

Figure 4.8. Likelihood of Moving within Bayswater

Q16b: If your business was to move from its current location, how likely do you think the new business location would be within the Bayswater precinct? Source: AEC

4.9 Likely Relocation Locations

However, businesses are most likely (52.1%) to remain within the Bayswater area. A

further 15.1% of respondents suggested they would stay within the immediate area (but

not within the Bayswater precinct).

52.5%

16.7%

5.6%

8.0%

6.2%

11.1%

Not at all likelyNot very likelyNeutralSomewhat likelyVery likelyDon't know / Unsure


17

Figure 4.9. Likely Relocation Locations

Q16c: If you were likely to move, to which of the following areas would you be likely to move? Source: AEC

4.10 Primary Reason for Moving

Respondents indicated their primary reasons for leaving the region, if they were to, would

be rental costs (12.0%) and better infrastructure (4.5%).

Figure 4.10. Primary Reasons for Moving

Q17: If you were to leave the region, what would be your primary reasons for moving? Note: multiple options available

Source: AEC

Other reasons for moving included no plans to move (35.9%) and larger premises (15.4%) and better premises (7.7%).

Table 4.4. Primary Reasons for Move, Other Categories


No plans to move 35.9%

Larger premises 15.4%

Better premises 7.7%

Proximity to customers 7.7%

52.1%

15.1%

12.6%

0.8%

8.4%

10.1%

Stay within the Bayswaterarea

Stay within the immediatearea (but not within theBayswater Precinct)

Stay within the MelbourneSoutheast region

Move to north Melbourne

Other

Don't know / Unsure

0.0% 20.0% 40.0% 60.0% 80.0%

Other

Don't know / Unsure

Rental costs

Better infrastructure

Mergers & Acquisitions

Consolidation of business operations ontoone site

Planning restrictions/ red tape



18


Opportunity / sales 6.0%

Quality of area/ precinct 4.3%

Costs 3.4%

Lifestyle 3.4%

Proximity to residence 1.7%

Proximity to employees 1.7%

Transport access 0.9%

Convenience 0.9%

Proximity to suppliers 0.9%

Other 10.3%

Total 100%

Q17: If you were to leave the region, what would be your primary reasons for moving? Other categories grouped by topic.

Source: AEC


19

5. Infrastructure Initiatives

In weighted average terms, the five most important infrastructure initiatives for survey respondents were:

Access to high speed internet (weighted average = 3.8, neutral-somewhat important).

Improved road conditions and configuration (weighted average = 3.7, neutral-

somewhat important).

Improvement to the overall look and presentation of the Bayswater precinct (weighted average = 3.2, neutral-somewhat important).

Railway lines underpass program (weighted average = 2.6, not very important-neutral).

Better connection with surrounding rail infrastructure (weighted average = 2.5, not very important-neutral).

Table 5.1. Infrastructure Importance

Infrastructure

Proportion of Respondents

Don't Know / Unsure

Not at all important

Not very important

Neutral Somewhat important

Very important

Railway lines underpass program 0.0% 36.4% 19.5% 11.8% 14.9% 17.4%

Improved local public bus network 0.0% 38.9% 22.3% 15.0% 16.1% 7.8%

Better connection with surrounding rail infrastructure

0.0% 38.0% 18.2% 15.1% 17.2% 11.5%

Greater supply of convenience retail facilities such as a supermarket and other additional shops/ retail services

0.0% 42.8% 20.1% 14.4% 16.0% 6.7%

Greater supply of food and beverages such as takeaways, cafes and/or restaurants

0.0% 45.6% 18.7% 14.0% 14.0% 7.8%

Greater supply of housing in the immediate vicinity

0.0% 40.8% 19.4% 14.7% 15.7% 9.4%

Greater supply of short term visitor accommodation

0.0% 56.5% 22.5% 9.4% 6.3% 5.2%

Greater supply of gyms 0.0% 64.9% 17.3% 7.9% 9.4% 0.5%

Greater supply of child care services

0.0% 50.3% 18.5% 13.8% 13.2% 4.2%

Improvement to the overall look and presentation of the Bayswater Precinct

0.0% 21.4% 13.5% 9.9% 29.7% 25.5%

Improved road conditions and/or configuration

0.0% 14.1% 8.4% 12.6% 22.0% 42.9%

Access to high speed broadband 0.0% 12.5% 7.3% 13.0% 19.8% 47.4%

Q18: How important would the following potential major infrastructure/investment initiatives be to your business? Source: AEC


20

6. Location Advantages & Disadvantages

This section profiles the locational advantages and disadvantages for local business. This includes key strengths, limitations and ways in which Bayswater could become more attractive to businesses.

6.1 Strengths of Current Location

The most prominent strengths of the precinct cited by survey respondents included access to major roads/ highways (49.5%), proximity to customers/ clients (42.0%) and proximity to suppliers (30.0%).

Figure 6.1. Strengths of Current Location

Q19: Which of the following are key benefits or strengths for the current location of your premises?

Note: multiple options available Source: AEC

Businesses of various sizes report different strengths of the region for business. Small to medium sized businesses are most likely to indicate ‘Access to major roads/highways’ and ‘Proximity to customers/clients’ as the main strengths of the area. Large businesses are more likely to consider ‘Proximity of access to skilled workers’.

Table 6.1. Strengths of Location by Size of Business

Strengths


1 – 4

5 – 19 20 - 99 100 - 199 500 - 1,000 Unsure

Proximity to customers/clients 47.8% 39.1% 31.0% 0.0% 50.0% 50.0%

Proximity to suppliers 32.6% 31.9% 17.2% 0.0% 50.0% 33.3%

Proximity to Universities/colleges 5.4% 1.4% 0.0% 0.0% 50.0% 0.0%

Proximity to or access to skilled workers 13.0% 20.3% 34.5% 50.0% 100.0% 0.0%

Access to major roads / highways 51.1% 44.9% 62.1% 50.0% 50.0% 16.7%

Proximity to amenities 13.0% 10.1% 0.0% 0.0% 50.0% 0.0%

Calibre / type of other businesses 12.0% 4.3% 6.9% 0.0% 0.0% 0.0%

Reputation of the Bayswater precinct 16.3% 7.2% 17.2% 50.0% 0.0% 0.0%

Relationship with Council and/or State gov 2.2% 7.2% 10.3% 0.0% 0.0% 0.0%

Operating costs 18.5% 20.3% 13.8% 50.0% 0.0% 0.0%

Other 19.6% 23.2% 20.7% 0.0% 0.0% 33.3%

5.5%

21.0%

3.5%

5.0%

8.0%

10.0%

13.0%

18.0%

19.5%

30.0%

42.0%

49.5%

0.0% 20.0% 40.0% 60.0%


Other


Relationship with the Council and/or state govt




Operating costs







21

Strengths


1 – 4

5 – 19 20 - 99 100 - 199 500 - 1,000 Unsure

Don’t Know / Unsure 18.5% 20.3% 20.7% 0.0% 0.0% 33.3%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%


6.2 Limitations of Current Location

The most prominent limitations of the precinct cited by survey respondents included proximity to customers/ clients (10.5%), access to major roads/ highways (10.0%) and operating costs (8.0%). Other limitations sited included public transportation and traffic

congestion. Limitations outlined as ‘other’ are provided in Appendix B.

Figure 6.2. Limitations of Current Location

Q19: Which of the following are key limitations or drawbacks of the current location of your premises? Note: multiple options available

Source: AEC

Businesses most sizes indicate ‘Proximity to customers/clients’ and ‘Access to major roads/highways’ as the main limitations of the area.

Table 6.2. Limitations of Location by Size of Business

Strengths


1 – 4

5 – 19 20 - 99 100 - 199 500 - 1,000 Unsure

Proximity to customers/clients 13.0% 5.8% 13.8% 50.0% 0.0% 0.0%

Proximity to suppliers 3.3% 4.3% 3.4% 0.0% 0.0% 0.0%

Proximity to Universities/colleges 4.3% 0.0% 0.0% 0.0% 0.0% 0.0%

Proximity to or access to skilled workers 5.4% 5.8% 3.4% 0.0% 0.0% 0.0%

Access to major roads / highways 9.8% 10.1% 6.9% 100.0% 0.0% 0.0%

Proximity to amenities 2.2% 0.0% 3.4% 0.0% 0.0% 0.0%

Calibre / type of other businesses 3.3% 0.0% 3.4% 0.0% 0.0% 0.0%

Reputation of the Bayswater precinct 6.5% 4.3% 3.4% 0.0% 0.0% 0.0%

Relationship with Council and/or State gov 2.2% 2.9% 3.4% 0.0% 0.0% 0.0%

Operating costs 8.7% 8.7% 3.4% 0.0% 0.0% 16.7%

Other 43.5% 43.5% 31.0% 50.0% 50.0% 50.0%

31.5%

42.0%

1.5%

2.0%

2.0%

2.5%

3.5%

5.0%

5.0%

8.0%

10.0%

10.5%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%


Other




Relationship with the Council and/or state govt




Operating costs





22

Strengths


1 – 4

5 – 19 20 - 99 100 - 199 500 - 1,000 Unsure

Don’t Know / Unsure 41.3% 42.0% 41.4% 50.0% 50.0% 50.0%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%


6.3 Methods for Improving Bayswater

Survey respondents were asked to provide guidance on would make the Bayswater Precinct a more attractive location for their business in the future. A quarter of respondents (26.0%) suggested there was very little needing to be done to improve the Bayswater Precinct. A

further 10% did not make any suggestions.

Key suggestions made generally centred on transport access, broadband and IT connectivity, general aesthetics, crime and safety, skills and education, land use and mix, costs, processes/ Council’s role and business attraction. Detailed points raised are

summarised in Table 6.3 below. All responses received are outlined in Appendix B.

Table 6.3. Methods for Improving Bayswater

Category Details

Transport access

Access to main roads

Removal of high tolls

Better roads

Better traffic network

New freeway

Car parking

Improvement in congestion

Move rail crossing underground

Improve public transport

Move railway line underground/ Rail underpass

Broadband/ IT Higher speeds and bandwidth

Optical connectivity

Aesthetics

Clean up the area (rubbish, pollution, graffiti etc.)

Make the area busier and more active

More exposure

More upmarket

Parks and gardens

Update some of the olds factories

Update old shops

Create something to draw people in

Increase tourism

Crime and Safety

Entrance gates/ security in the industrial area

More police presence

More lighting

More safety

Remove speed cameras

Skills and Education

Attract skilled workers

Increased education for trades

Research facilities and universities

Investment in research and development

Land Use and Mix

Increased tourism accommodation

Improve affordable housing in the area

Remove residential areas

Increased residential housing


23

Category Details

Increased mixed use development (with retail on ground floor)

Improve/ increase commercial office offering

Increase availability of industrial land

Provide large factory lots at lower prices

Costs

Lower cost of land

Lower rental prices

Increase cost effectiveness of business

Processes / Council Role

Don't change too much

Provide government assistance for business

Provide opportunities to engage with local government for planning/ urban design

Increase accessibility to grants

Increase advertising of the area

Support the manufacturing industry

Business Attraction

Attract both upstream and downstream supply chain businesses

Attract working factories

Attract more industry

Q21: What, if anything, would make the Bayswater Precinct a more attractive location for your business in the future? Please consider potential challenges (technical and non-technical) that you would like to overcome. .

Source: AEC


24

7. Business Relationships

This section profiles the relationships between local businesses. This includes supplier base, customer base, business needs and desire to export.

7.1 Suppliers

Suppliers for local businesses tend to be in the immediate regions (Melbourne Southeast region) at 30.5% or within the state at 21.0%. Approximately 12.0% of all suppliers 8.0% of critical suppliers are in the Bayswater precinct.

Table 7.1. Location of Supplier Base


Most of the suppliers are from the immediate regions (Melbourne Southeast region) 30.5%

Most of the suppliers are from within the state 21.0%

Most of the suppliers are from the Bayswater Precinct 12.0%

Most of the suppliers are from overseas 11.5%

Most of the suppliers are from outside Victoria but within Australia 9.0%

Critical suppliers are from the Bayswater Precinct 8.0%


Total 100%

Q22: Which of the following best describes the location of your current supplier base? Source: AEC

Most large businesses benefit from having suppliers in the Bayswater precinct, however, the suppliers for smaller businesses are in more diverse locations.

Table 7.2. Location of Supplier Base by Business Size

Response

Business Size (Employment)

1 – 4

5 - 19

20 - 99

100 - 199

500 - 1,000 Unsure

Most of the suppliers are from the immediate regions (Melbourne Southeast region)

13.0% 4.3% 0.0% 0.0% 0.0% 16.7%

Most of the suppliers are from within the state 10.9% 13.0% 17.2% 0.0% 0.0% 0.0%

Most of the suppliers are from the Bayswater Precinct

25.0% 37.7% 31.0% 0.0% 50.0% 33.3%

Most of the suppliers are from overseas 20.7% 20.3% 17.2% 50.0% 0.0% 50.0%

Most of the suppliers are from outside Victoria but within Australia

7.6% 5.8% 20.7% 50.0% 0.0% 0.0%

Critical suppliers are from the Bayswater Precinct 13.0% 11.6% 6.9% 0.0% 50.0% 0.0%

Don’t Know/Unsure 9.8% 7.2% 6.9% 0.0% 0.0% 0.0%

Total 100% 100% 100% 100% 100% 100%

Source: AEC

7.2 Customers

Customers for local businesses tend to be in the immediate regions (Melbourne Southeast

region) at 27.5% or within the Melbourne Metropolitan region at 26.5%.

Table 7.3. Location of Customer Base


Most of the customers are from the immediate regions (Melbourne Southeast region) 27.5%

Most of the customers are from within the Melbourne Metropolitan region 26.5%

Most of the customers are from within the state 19.5%

Most of the customers are from outside Victoria but within Australia 19.5%

Most of the customers are from overseas 4.0%



25


Total 100%

Q23: Which of the following best describes the location of your current customer base?

Source: AEC

Larger businesses (with more than 100 employees) are most likely to have clients outside the precinct. These customers are mostly in Victoria or the rest of Australia. Smaller

businesses within the precinct were more likely to have customers from within the broader region, both Melbourne Southeast and Melbourne Metropolitan regions.

Table 7.4. Location of Customer Base

Response 1 –

4 5 – 19

20 - 99

100 - 199

500 - 1,000 Unsure

Most of the customers are from the immediate regions (Melbourne Southeast region)

34.8% 26.1% 6.9% 0.0% 0.0% 50.0%

Most of the customers are from within the Melbourne Metropolitan region

30.4% 24.6% 24.1% 0.0% 0.0% 16.7%

Most of the customers are from within the state 15.2% 24.6% 17.2% 50.0% 0.0% 33.3%

Most of the customers are from outside Victoria but within Australia

15.2% 17.4% 34.5% 50.0% 100.0% 0.0%

Most of the customers are from overseas 3.3% 2.9% 10.3% 0.0% 0.0% 0.0%

Don’t Know/Unsure 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Total 100% 100% 100% 100% 100% 100%

Source: AEC

7.3 Business Support

The most prominent forms of business support respondents indicated would be beneficial

to their business included opportunities to access new technology (37.5%), opportunities to identify new local suppliers or customers (37.0%) and local business association to network and meet with other local business (34.0%).

Figure 7.1. Business Support

Q24: Which, if any, of the following would be beneficial to your business? Note: multiple options available

Source: AEC

9.0%

10.0%

11.5%

15.5%

19.0%

21.0%

27.0%

34.0%

37.0%

37.5%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%


Other

None of the above/nothing would be beneficial tothe business

Seminars and workshops around business topics

Opportunities to access more localised training forworkers

Websites for networking

Local business association to advise the government

Local business association to network and meet withother local businesses

Opportunities to identify new local suppliers orcustomers

Opportunities to access new technology



26

7.4 Exports

Approximately a quarter (25.3%) of local businesses export their products. Almost all other respondents (39.2%) indicated they did not currently export and were not interested in exporting.

Figure 7.2. Exports

Q25: Does your business currently export goods or services overseas or is your business interested in exporting? Source: AEC

Businesses in the manufacturing, retail trade and wholesale trade sectors were most likely

to indicate they did not currently export but were interested in exporting.

Table 7.5. Interest in Exporting – By Sector

Sector Proportion of Total %

Manufacturing 41.9%

Retail Trade 22.6%

Wholesale Trade 12.9%

Arts and Recreation Services 9.7%

Construction 3.2%

Financial and Insurance Services 3.2%

Rental, Hiring and Real Estate Services 3.2%

Health Care and Social Assistance 3.2%

Total 100%

Source: AEC

7.5 Barriers to Exports

Approximately a third (33.5%) of respondents indicated they experienced none of the above/ no barriers identified. The nature of business (15.0%) and cost (11.5) were also

cited as barriers to export. Barriers outlined under other included the exchange rate, competition (particularly with China) and tariffs.

39.2%

25.3%

21.1%

14.4%

Other

Business currently exports

Business does not currently export but is interested in exporting

Don't Know / Unsure


27

Figure 7.3. Barriers to Exports

Q26: What are the main barriers to export, if any, your business faces? Note: multiple options available

Source: AEC

0.5%

2.0%

2.0%

11.5%

15.0%

15.5%

19.5%

33.5%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

Access to export infrastructure

Trade barriers

Access to key export markets

Cost

Nature of business


Other

None of the above/no barriers identified



28

Appendix A: Survey Instrument


29


30


31


32


33

Appendix B: Verbatim Responses

Table B. 1. Verbatim Responses to Q20

Response Frequency

access to public transport. 1

access to western suburbs 1

bigger sized premises 1

car parking on Malvern st made less room for trucks 1

clients interstate 1

closer to major freeways, Monash or east link would be ideal 1

convenience 1

difficult getting signal 1

far from eastern freeway 1

industrial zone which effects parking 1

inner city focus vs outer city focus - inner city is better resourced, and close to government being able to access is

1

isolation 1

lack of parking 1

lack of traffic in the area industrial area 1

location 1

location fine, online retail ruin business 1

location fine, overseas importing ruining business 1

luxury service that requires people with money 1

more affordable housing would be great and better road networks. Council should consult more with the council. Especially in relation to the flooding- they need to look after the needs of the small businesses. Better access to East Link. Cut time getting into the city.

1

new chocolate business with same name 1

No nearby short term accommodation for international visitors 1

no out-door area 1

no shops nearby in walking distance 1

not central of Melbourne CBD 1

not close to unis 1

not enough foot traffic 1

not enough street exposure 1

old location, construction renewal 1

parking 2

parking accessibility 1

peak traffic increased 1

people dumping rubbish 1

people not spending money 1

Poor cleanliness of the area, next door like junk yard, overall cleanliness council not caring 1

poor quality internet 1

proximity to CBD 1

public transport 1

railway crossing 1

relined Malvern street too small for double parking, one side is better, not good for trucks, too crammed

1

road configuration 1

security 1

size 2

technical trade training 1

the industrial estate has bad odors, pollution and a lot of rubbish particularly on vacant lots 1

too many business closing down 1


34

Response Frequency

traffic 2

traffic congestion 1

very busy road near the school 1

none 33

Source: AEC

Table B. 2. Verbatim Responses to Q21

Response Frequency

Access to main roads, getting on to the freeways without any hassle of high tolls 1

Access to roads 1

Accessibility to grants 1

Accommodation - lots of international clients with no place to stay in Bayswater, nearest is Novotel in another area

1

Advertising 1

Affordable housing in the area 1

As long as the council keeps out of it and doesn’t change too many things we will be ok 1

Aesthetics 1

Availability of more industrial land 1

Bayswater is dying because manufacturing is dying. If people are no longer manufacturing our business will be non-existent

1

Better commercial properties 1

Better infrastructure on roads for access larger plants out 1

Better internet in the Bayswater precinct 1

Better location 1

Better presentation 1

Better road access and power supply 1

Better roads 1

Better traffic network and road infrastructure 1

Broadband is an issue 1

Building the freeway 1

Bulldoze residential areas and put up factories instead 1

Busyness, more people, more attractive 1

Can’t think of any 1

Can’t think of anything 1

Car parking, Railway, Peak hour traffic 1

Cheaper 1

Cheaper rental for customers 1

Clean the area up, a lot of pollution, can smell the rubber from Dunlop, some companies are offensive, people dump rubbish on vacant lots, left trailer for months, a couch was dumped, devalues the property and not good when clients come here, people need also to follow laws, a lot of car stunts going on

1

Communication and internet 1

Competitive broadband for inner city, improved ability to be able to move in and out (road conditions)

1

Council need to clean up the factories, graffiti next to railway, junk scattered and food. Bad for showing customers

1

Don’t know 4

Doesn’t affect me 1

Don’t know 1

Don’t know 6

Don’t know 2

Education of trade’s people. Specific technical training for each trade. 1

Entrance gates/ security in the industrial area 1

Fast internet, optical 1


35

Response Frequency

Faster broadband access 1

Fine 1

Freeway to eastern suburbs - infrastructure for factories 1

Get rid of the railway line all together and constant cleaning up of the rubbish on the streets 1

Get rid of the tolls on the toll road 1

Get the new chocolate business to change name! 1

Getting rail crossing out of the road and underground. 1

Government assistance 1

Ground floor should be retail to encourage business 1

GST 1

Happy with the development so far 1

He is a mechanic so not much would make his location more attractive 1

Housing unit development and planning restrictions 1

I can’t think of anything. 1

I don’t know 1

I don’t know. I can’t really say for sure. 1

I don’t think it would affect our business 1

I really can’t think of anything. We’re not impacted by rail, we’re not driven by access. Maybe just a bit of road access for large trucks or containers.

1

I think the reputation has a good ring to certain areas. Having a more tidier area and economical area would benefit the service later on

1

I’d like to make sure the roads are maintained in a satisfactory manner. Everything else in the area is okay for us.

1

Improve public transport (connections with south and integration with bus and train services) 1

Improve the roads and landscape 1

Improved infrastructure 1

Improvements to the availability of trade training options for staff, improved access for staff via road and public transport, have to have own car and drive to work for us

1

Improving the look of it 1

It’s more just around the type of population in Bayswater, it’s a fairly low socio-economic area so they don’t want to pay the rates for a dietitian

1

It’s the rates. The location is very convenient but turning into the most expensive area 1

I've got nothing (laughs). 1

Just the cost of premises in the area is too expensive for non-for-profit org 1

Just the general amenities in the area 1

Keeping it alive 1

Lack of commercial development, road conditions with the heavy traffic 1

Land prices cheaper 1

Less drug deals 1

Less graffiti more police, and more lighting 1

Less importing from cheap companies or make a tariff to import, most manufacturing companies facing the same issues, some closing, more factories are becoming available, manufacturing companies are suffering and require help.

1

Less traffic congestion 1

Location not important 1

Making it cost effective for businesses 1

More about facility 1

More amenities in the area 1

More business in the manufacturing 1

More cleaner in the main streets 1

More clients 1

More exposure 1

More housing 1

More industry 1


36

Response Frequency

More investment from the government in ways of R&D 1

More larger sized factories at affordable pricing. 1

More manufacturing in the area would be supportive but it has more to do with government policy 1

More people - tourism and long term leaving; infrastructure for locals 1

More shops doing well 1

More skilled workers 1

More upmarket 1

More working factories 1

N/a 6

No 11

No comments 1

No problems 1

None 2

None that I can think of. 1

Not applicable 1

Not known 1

Not much 1

Not really 1

Not really people only come when problem 1

Not so many lease signs, more shops doing well 1

Not sure 3

Not sure. 1

Nothing 8

Nothing that applies to me 1

Nothing to add 1

Nothing. 1

Nothing. Not relevant. 1

No response 13

Old industrial estate - not sure 1

Only thing is that our internet is slow and getting slower 1

Opportunity to engage with local government for planning/ urban design 1

Overall aesthetic - needs to update the old shops 1

Overall improving area including cleaning up 1

Parking, different variety of shops (oversupply of opportunity shops) 1

Parks and Gardens 1

Power bills are out of control 1

Public transport 1

Rail underpass 1

Railway lines underpass program 1

Railway underpass 1

Recognition for the technology 1

Removing red tape for small businesses 1

Research facilities and universities 1

Road improvement 1

Road improvements 1

Speed cameras removed, more police, more safety 1

Stop importing, kitchen importing, Bunnings and master, killing the cabinet industry, that with the media making it impossible, Bunnings kitchen manufactured in a week

1

Survey terminated at q17 1

That’s a really hard question. Cheaper rates for businesses, more palatable to open a business in the area, encourage people and businesses to come to the area

1

The business is an upmarket business, the area I live in I don’t' have a lot of customers in this area

1


37

Response Frequency

The housing trend looks attractive 1

The railway line in Bayswater to be put underground. A bit of a bottleneck. 1

The road network 1

There’s really nothing that I can say. Not unless they can offer cheaper electricity. 1

To have something that would draw people in more and parking 1

Traffic conditions - getting in and out, the commute - ability to get to and other precinct - road conditions

1

Underpass for rail 1

Unsure 2

Updating some of the other older factories 1

Vehicle access 1

Will be there for 20 years and don’t have to change a thing 1

Source: AEC


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