Investment and business activity in centres

Objective 22

Greater Sydney continues to benefit from the historic policy of locating major trip generating activities (such as retail, hospitality, offices, health and education, community and administrative services) in centres with train stations. The benefits of well-connected and diverse centres include:

Jobs are closer to homes - today 10 suburban centres have more than 20,000 jobs³³, providing a strong foundation of polycentric centres on which to build the metropolis of three cities.
Significant investment in the public transport network is optimised giving the community better access to goods, jobs and services which will be reinforced by a 30-minute city (refer to Objective 14).
Significant investment in health, education, administrative, community and other social infrastructure is optimised giving the community productivity and liveability benefits.
Businesses are well connected to a large skilled labour force.
Increased productivity is driven by business agglomerations.
A sense of place and identity is enhanced.

These benefits maximise opportunities to attract higher density and higher amenity residential developments, which in turn enhance the vibrancy of centres and support walkable neighbourhoods. Walkable neighbourhoods require infrastructure including footpaths on each side of the road, pedestrian crossings, wayfinding, lighting, shading and natural surveillance.

Centres continue to be a key organising element of the urban structure of Greater Sydney and all play an important role in providing access to jobs, goods and services. There are approximately 1,350 centres across Greater Sydney, ranging from the Harbour CBD with nearly half a million jobs across multiple precincts, to local centres with a small cluster of shops³⁴. Not all centres are based on retailing; in some centres such as Norwest and Rhodes retail is a relatively minor business component, which exemplifies the diverse nature of centres (refer to Table 4 and Figure 40).

As Greater Sydney's population grows over the next 20 years, there will be a need for over 5 million square metres of additional retail floor space³⁵ and additional stand-alone office developments to accommodate a significant increase in office jobs. For Greater Sydney to remain competitive the market needs to be able to deliver this floor space in an efficient and timely manner. Numerous regulatory reviews across Australia have emphasised this issue. This means there will be a need to grow existing centres and develop new ones. To maximise the liveability, productivity and sustainability benefits of all centres, the approach will focus on:

managing and expanding the network of existing centres
planning and growing new centres
monitoring development and activity trends and changes in centres.

Managing a hierarchy of centres

Centres vary in size and role depending on their activity mix, scale and location. This Plan builds on the existing strengths of each centre within a common framework to deliver on the wider productivity and liveability objectives to grow jobs across Greater Sydney and improve the communities' access to goods and services.

In managing Greater Sydney's network of centres, it is recognised that:

there is a significant demand for retail which needs to be accommodated
standalone office development is currently concentrated in nine locations
health and education activities can have a major influence on the attraction of other activities and their growth is driven by government investment (refer to Objective 21)
the proportion of all jobs in metropolitan, strategic and the larger local centres is increasing as a percentage of all jobs.

The provision of infrastructure - specifically transport, health and education infrastructure - influences the role and significance of a centre, and its capacity to attract jobs and private-sector investment.

This Plan establishes a three-level hierarchy of centres - metropolitan, strategic and local centres (refer to Table 4). The Greater Sydney Commission will play a role in supporting the planning and development of various metropolitan and strategic centres. This reflects the importance of these centres in the overall economic geography of Greater Sydney. The designation of each centre within the hierarchy, should be reviewed with each review of the Greater Sydney Region Plan, particularly in the growth areas of the Western Parkland City.

The details of the hierarchy are discussed below.

Metropolitan centres

Growing the global competitiveness of Greater Sydney is fundamental to the vision of A Metropolis of Three Cities.

The urban structure to support the metropolis of three cities needs to give people access to a large number and range of jobs and services delivering a well-connected city - a 30-minute city.

The urban structure of the Eastern Harbour and Central River cities enables each to have a single metropolitan centre. The new Western Parkland City requires a different approach - four centres will create a metropolitan cluster. Specifically:

In the Eastern Harbour City, the Harbour CBD provides a mature, highly accessible and wellserviced centre with its 230-year history and investments in a radial rail network.
In the Central River City, Greater Parramatta is also well established and located close to the geographic heart of Greater Sydney. It is a growing centre with an increasing range of jobs and services.
The Western Parkland City is an emerging city with a north-south geography extending for 54 kilometres. The presence of three longestablished centres provides the opportunity for a polycentric urban structure. Here, a cluster of four centres will deliver the metropolitan functions of providing concentrations of higher order jobs and a wide range of goods and services. The cluster comprises:
- Western Sydney Airport and Badgerys Creek Aerotropolis (to be developed over the life of the Plan)
- Liverpool
- Greater Penrith
- Campbelltown-Macarthur.

The Plan affirms the economic significance of the metropolitan centres which continue to be a major focus of government investment.

Delivering a 30-minute city in the Western Parkland City will focus on improving access to all four centres of the metropolitan cluster.

Strategic centres

Attracting investment, business activity and jobs in strategic centres across Greater Sydney increases access to a wide range of jobs, goods and services close to people's homes and supports the 30-minute city.

The Plan identifies 34 strategic centres (refer to Table 4 and Figure 40).

Each differs in scale and ability to provide jobs, goods and services. For example, there are only seven major commercial precincts within strategic centres, whereas centres such as Leppington, Frenchs Forest, Narellan and Marsden Park still have significant opportunities to grow.

However, as strategic centres, expectations for all are similar. They include:

high levels of private sector investment
flexibility, so that the private sector can choose where and when to invest
co-location of a wide mix of land uses, including residential
high levels of amenity and walkability and being cycle friendly
areas identified for commercial uses, and where appropriate, commercial cores.

The NSW Government will enhance public transport access to strategic centres as part of the 30-minute city - that is 30-minute access by public transport to the nearest strategic centre seven days a week to improve both productivity and liveability.

In recognition of the differing opportunities and scale of the strategic centres, the NSW Government will prioritise infrastructure investment to:

unlock significant private sector investment
attract businesses and provide a range of services
improve the attractiveness of the centres as a place to live, work and enjoy and provide community services
allow continued expansion to increase the number of jobs close to where people live.

The Greater Sydney Commission will explore opportunities to enhance initiatives that deliver jobs and investment in strategic centres.

With a need to create 817,000 jobs over the next 20 years to 2036, job targets are an important tool in driving opportunities for investment and business growth. District plans will include job targets for all metropolitan and strategic centres.

To deliver on this approach strategic plans should be prepared for all strategic centres. These plans need to outline how the expectations identified above can be delivered, including the infrastructure and the planning regime required to enable jobs growth.

Research indicates that some of the typical barriers which need to be addressed to unlock the economic potential of centres include land fragmentation and the limited availability of larger sites, restrictive planning controls, accessibility and amenity³⁶.

Employment growth is the principal underlying economic goal for metropolitan and strategic centres. Therefore, the designation of a commercial core within a strategic centre, for the purposes of economic and employment uses, may be necessary to manage the impact of residential developments in crowding out commercial activity.

A balance is required in providing adequate mixeduse or residential zoned land around a commercial core that allows new residential developments to benefit from access and services in centres.

Commercial office precincts

Commercial office precincts form part of some metropolitan and strategic centres (refer to Table 4). The majority of Greater Sydney's standalone office market is in nine centres³⁷:

Harbour CBD - including North Sydney
St Leonards
Chatswood
Macquarie Park
Norwest
Parramatta CBD
Sydney Olympic Park
Rhodes
Green Square - Mascot.

Greater Sydney's office market reveals an overflow market influenced by property and economic cycles where development opportunities are influenced by the availability of sites; planning settings; critical mass (generally seen to be 100,000 square metres of office floor space); access to labour and employers; proximity to health, education and legal activities; and government support³⁸.

The retention and growth of existing and new commercial office precincts is essential to grow jobs and Greater Sydney's global competitiveness into the future.

Local centres

Local centres are important for access to day-to-day goods and services. These centres create a strong sense of place within the local community. Local centres are collections of shops and health, civic or commercial services. Larger local centres, such as those anchored by a supermarket, can form the focus of a neighbourhood. Supermarket-based centres also provide local employment, accounting for close to 18 per cent of all Greater Sydney's jobs.

While local centres are diverse and vary in size (as measured by floor space), they play an important role in providing access to goods and services close to where people live. Increasing the level of residential development within walking distance of centres with a supermarket is a desirable liveability outcome.

Enhancing the accessibility, connectivity and amenity of walking and cycling paths in and around centres is required to improve walkability. Improving road and footpath environments within centres enhances the centre's function as a destination and contributes to the vitality and viability of the centre (refer to Objective 12). Enhanced walkability can also be achieved through provision of a fine grain urban form with a diversity of commercial spaces and public places, and co-location of services and infrastructure.

The management of local centres is best considered at a local level. Developing a hierarchy within the classification of local centres should be informed by a place-based strategic planning process at a council level including an assessment of how, broadly, the proposed hierarchy influences decision-making for commercial, retail and other uses.

Rural towns and villages

Greater Sydney's rural towns and villages are scattered across the Metropolitan Rural Area, providing important centres for rural industries, tourism and businesses and for providing the day-today needs of communities. While the larger towns of Katoomba and Richmond-Windsor are strategic centres, most rural towns and villages function as local centres.

Maintaining the distinctive character of rural villages is a high priority (refer to Objective 29). Growth and intensification of business activity within rural villages is supported where they maintain or enhance local character.

Expanding rural towns and villages beyond their current boundaries to accommodate new business activity should be considered only when this is linked to a growth management plan for the whole town or village, and should not compromise the values and character of nearby rural and bushland areas.

Interchanges

Future Transport 2056 identifies the importance of transport interchanges as places which will have a high level of accessibility as service frequencies and travel times are improved. There will be potential for interchanges to deliver mixed-use, walkable, cyclefriendly centres and neighbourhoods. Councils need to consider local conditions through placebased planning that provides for centres around interchanges to grow and evolve over time and potentially become strategic centres.

Governance

Governance is an important tool in the delivery of outcomes for Greater Sydney's centres. The NSW Government will facilitate a range of governance approaches across metropolitan and strategic centres, including:

Western Sydney City Deal governance arrangements which brings three tiers of Australian, NSW and local government together to deliver, among other things, the growth of the Western Parkland City - metropolitan cluster (refer to Objective 20).
Collaboration Areas, a Greater Sydney Commission governance arrangement which facilitates whole of NSW Government and local government co-ordination for complex place-based initiatives (refer to Objective 5 and Objective 39).
Planned Precincts, a NSW Department of Planning and Environment initiative which seeks to facilitate place-based outcomes, including for strategic centres.

Table 4: Centre hierarchy

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Figure 40: Metropolitan and strategic centres

Map showing Metropolitan and strategic centres.

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Strategy 22.1

Provide access to jobs, goods and services in centres by:

attracting significant investment and business activity in strategic centres to provide jobs growth
diversifying the range of activities in all centres
creating vibrant, safe places and a quality public realm
focusing on a human-scale public realm and locally accessible open space
balancing the efficient movement of people and goods with supporting the liveability of places on the road network
improving the walkability within and to centres
completing and improving a safe and connected cycling network to and within centres
improving public transport services to all strategic centres
conserving and interpreting heritage significance
designing parking that can be adapted to future uses
providing for a diverse and vibrant night-time economy in a way that responds to potential negative impacts
creating the conditions for residential development within strategic centres and within walking distance (up to 10 minutes), but not at the expense of the attraction and growth of jobs, retailing and services; where appropriate, strategic centres should define commercial cores informed by an assessment of their need

Principles for Greater Sydney's centres

As Greater Sydney's population grows over the next 20 years, there will be a need to grow existing centres, particularly strategic centres and supermarket-based local centres, create new centres including business parks, and attract health and education activities into centres. The principles for developing centres are:

Existing centres: Expansion options will need to consider building heights and outward growth. In some cases, directly adjacent industrial land may be appropriate for centre expansions to accommodate businesses. Quality design and adequate infrastructure provision is critical to enable expansions. This approach needs to be informed by local government industrial strategies.
New centres: These will be required across the whole of Greater Sydney.
- In land release areas, planning is to identify a range of centre types, including large and small local centres which could grow and evolve into new strategic centres and planning should maximise the number and capacity of centres on existing or planned mass transit corridors. To deliver this latter outcome centres need to be identified early to allow their incorporation into transport infrastructure plans.
- In the Western Parkland City, where South Creek is to be planned as the central organising element for the city, opportunities for new centres to address South Creek are to be maximised.
- In established areas, innovative approaches to creating new centres are likely to be part of urban renewal and mixed-use developments.
- All new centres are to have good public transport commensurate with the scale of the centre.
Business parks: Not all centres will start as retail centres. Creating jobs and providing services to local communities can be initiated within business parks. However, the built form of these business parks is critical - that is, they need to be developed, from the outset, as urban places which can transition into higher amenity and vibrant places while maintaining their main role as an employment precinct. Councils' retail and employment strategies should provide guidance on the transition of business parks into mixed employment precincts including, where appropriate, ancillary residential developments to support the business park.
New health and tertiary education facilities such as hospitals and community health centres. These should be located within or directly adjacent to centres, and ideally co-located with supporting transport infrastructure. In some cases, health and education facilities may be the anchor of a new centre. Built form is critical to facilitate the transition of centres with health and education uses into more mature innovation precincts. A mix of retail and other services including hotel type accommodation adjacent to the precinct should be supported (refer to Objective 21).
Clusters of large format retail should be treated as part of the retail network, and planning for new clusters of large format retail should be done in the same way other new centres are planned. This includes ensuring centres are places that can grow and evolve over time, and have adequate access to transport services and quality public domains.

Increases in online ordering and home delivery means some retail is essentially a distribution centre. These 'dark retail' stores are most suited to industrial areas as they involve significant logistics support and do not require community access.

Where there is a prevalence of retail activities in an industrial area, there may be exceptional circumstances which warrant the development of a new centre. This should be informed by a net community benefit test supported by a strategic review of centres (which identifies the need for the centre) and an industrial land review (which identifies that the loss of industrial activity can be managed) for the local government area. These reviews are to be prepared by councils, and endorsed by the Greater Sydney Commission.

In such cases, the centre should be:

located where public transport services are commensurate with the scale of the centre
directly opposite a residential catchment accessible by a controlled pedestrian crossing
more than a standalone supermarket
of quality urban design with amenity, informed by a master plan
supported by planned and funded infrastructure commensurate with the needs of the centre.

For new centres in industrial areas, the economic impact of the centre should be assessed for its impact on the operation of existing businesses in the locality and the viability of surrounding centres.

Planning for new and existing centres is to:

be informed by council growth strategies, which should consider the network of centres, retail, commercial and industrial supply and demand and local housing strategies
be potentially informed by district-based studies, facilitated by collaborations between councils
consider the temporal nature of growth and change across Greater Sydney, both historic and future, and its influence on development opportunities at the local level
recognise improvements to walkability as a core outcome for change in centres
result in the development and implementation of land use and infrastructure plans to inform infrastructure investment and land use policy decisions
respond to the detailed planning considerations of Strategy 12.1 and Strategy 22.1.

Strategy 22.2

Create new centres in accordance with the principles for Greater Sydney's centres.

Understanding changes in the retail sector

The retail industry is continually influenced by changing trends and new technologies. For example, in 2016, Australians spent an estimated $21 billion on online retail with NSW contributing 34.9 per cent of this, well ahead of Victoria (23.7 per cent), Queensland (18.2 per cent) and Western Australia (11.2 per cent)³⁹.

Although online retail remains a relatively small proportion of spending on bricks and mortar retail compared to other countries at 7.1 per cent in 2016⁴⁰, Australia's adoption of consumer technology, increasing desire for innovative experiences, and the rising use of online-only stores, has retailers reviewing their store formats, improving their online presence and in some cases significantly reducing their retail floor space.

While physical shop fronts will continue to play an important role for retail, their functions and purpose will change depending on the market capacity to adopt new technology and digital platforms. It will be important to understand how the market is responding to these changing technologies, and in particular, what this means for the demand for retail and other floor space across Greater Sydney.

Considerations for planning include:

retention of industrial land that provides justin-time logistics supply chains to support future retail in centres and deliveries
the adaptation or re-use of existing urban forms such as car parking
public domain design measures that enhance centre activation and vibrant street life.

The NSW Department of Planning and Environment is to prepare a statewide retail planning policy.

To enable land use policies to respond to these changes, there is a need to improve the monitoring of retail activity to better understand supply and demand pressure. This issue is further addressed in Objective 40: Plans refined by monitoring and reporting.

High Street, Penrith