HOT PROPERTY

Looking for the best locations in NSW?

The right site selection can make or break a business opportunity, and as the popularity of rural real estate grows and the country’s metropolitan centres hit boiling point, it may surprise you which regions are ripe for the picking.

The factors that influence a location’s profitability are many and varied, but all play an equally important and significant role.

Understanding the brand’s customer base, the demographics that dictate the region’s buying demand and the proximity to supply channels are all critical elements that must be considered when assessing a franchise opportunity.

Regardless of the proposed business’s industry or offering, however, access to a high flow of traffic and customer visibility will be pivotal to the overall prosperity of a site, and landlords know this.

Rents in high footfall areas such as shopping centres and CBD spaces are steadily rising, however, the impending results of the parliamentary inquiry into franchising threaten to swing the power back into the hands of retailers.

With the NSW government pledging a renewed focus on industry and development, prospective franchisees are well poised to make a move into the world of business ownership, with Commercial Property Guide’s Stephen Rose suggesting entrepreneurs widen their search.

“When it comes to industrial property there is a ring of sweet spots around the 20km distance from the Sydney CBD,” Rose says. “This seems to be the point at which most property seekers believe the locations can provide the balance between quick delivery times to the majority of the metropolitan population and the lower-cost industrial rents of the slightly further out suburbs, compared to inner city industrial rents.”

As the lure of prime real estate at an affordable price shifts the focus from city centre to outer reaches, where are the NSW hotspots prospective franchisees should be setting up shop?

WESTERN SYDNEY

With a population now topping five million people, the iconic Sydney skyline has been no stranger to construction cranes and towering scaffolding structures, with its western suburbs the latest region set to reap the reward of increased development.

In its 2017 state budget, the NSW government committed $72.7 billion over a four-year period to help boost the area’s road and public transport projects, reducing commute times and easing congestion.

Projects such as the $20 billion, 33-kilometre WestConnex motorway will link the area with Sydney Airport, granting domestic and international guests easy access to the thriving cultural hub.

The ongoing infrastructure developments are expected to significantly bolster both residential and commercial property values, akin to the boom seen in Lilyfield and Rozelle following the opening of the Anzac Bridge in the mid-’90s.

Rose suggests the increase in development and an expected population growth made Western Sydney, already Australia’s third-largest economy, a primary target for eagle-eyed investors and entrepreneurs.

“Population growth is the main reason for rising commercial property prices, both for lease and for sale prices,” he says. “The firm commitment to the Western Sydney airport has started an upward move in the wider precinct commercial property prices, particularly industrial property prices.

This is as much in anticipation of the improved road transport access as the airport itself. The strategic thinkers are making plans now.”

Interest in Western Sydney is steadily rising, with the areas of Penrith, Liverpool and Parramatta expected to attract a further million residents over the next 10 to 15 years, thanks to community-centric developments such as the Eastern Creek Quarter.

EASTERN CREEK QUARTER

Located within the Western Sydney Parklands, Eastern Creek Quarter is the latest project from perennial developers Fraser Property Australia, and features an innovative dining precinct set to supply visitors and locals with a fresh market offering.

The space will house a range of speciality retail stores and services, an entertainment precinct, children’s play area and other community amenities.

“At Eastern Creek Quarter, we’re looking to create the most talked about place in Sydney’s west. This means creating a vibrant, unique and exciting food and beverage offer in the most comfortable, sustainable environment imaginable,” says Tim Moore, general manager, retail leasing, Frasers Property Australia.

Like many developments within the Western Sydney catchment, the project leverages the area’s predicted growth and increased accessibility as key market assets, with the new development marketed as just a 15-minute drive for 330,000 people and a 30-minute drive for another 1.2 million Sydneysiders.

Driving won’t be the only option for Western Sydney visitors, however, with the first stage of Parramatta’s light rail project expected to open in 2023.

PARRAMATTA

The introduction of the Parramatta line capitalises on the $2.7 billion Parramatta Square redevelopment that is set to revitalise the area with premium-grade offices space, multi-level retail opportunities and civic facilities that showcase the latest in contemporary design.

Developed to provide a food and beverage offering that runs 18 hours a day, seven days a week, the Parramatta Square project is gaining national attention from food service providers and culinary connoisseurs alike.

The 290,000sqm retail development is being constructed to accommodate the surging influx of people set to join the region over the next 20 years.

The Metropolitan Plan for Sydney 2036 targeted an employment capacity of 70,000 jobs for Parramatta by 2036, strengthening the area’s role as Sydney’s premier regional city and second CBD.

According to a study by professional services firm, PwC, commissioned by the City of Parramatta, economic growth within the region is expected to double in the years 2016 to 2021, including an additional $1.2 million daily retail spend.

With more than $10 billion worth of investment in economic and social infrastructure expected to be completed in Parramatta over the next three years, the total workforce is set to rise to 186,000, up by 29,000 in 2016.

Compounding this, an additional 41,000 people are predicted to call Parramatta City home by 2021, a growth that nearly doubles the national rate.

Rose says the increasing residential demand and commitment to boost infrastructure is causing a shift in market value, forcing commercial prices to slowly rise as the wealth of projects near completion.

“Small and medium-sized industrial developments have been widespread,” he says. “The commercial property market functions exactly as the economics textbooks says free markets operate. Demand from population growth causes commercial rents to rise. These increases in lease costs encourage more investment in industrial property to take advantage of the high rent returns. Eventually rents stop rising. We’ve seen this in Sydney in recent years. For a while, the best option was to be an owner-occupier then as new properties hit the market, renting becomes the preferred option.”

At Eastern Creek Quarter we’re looking to create the most talked about place in Sydney’s west.

WOLLONGONG

Located on the southern fringe of the CBD, Wollongong has exploded in popularity over the last two years, due primarily to the growth in areas such as Port Kembla and Shoalhaven.

Retail in the Wollongong region has remained steady over the last decade, however, the recent inconsistency in sales growth for the country’s primary discount department store (DDS) retailers has sharply effected tenancy.

In its Sub-Regional Shopping Centres: A Case

of Middle Child Syndrome? report released this year, property group CBRE suggested that a healthy mix of tenants and a focus on servicebased offerings were helping to boost regional retail market share.

“Our analysis indicates that neighbourhood shopping centres – underpinned by their relatively secure income profile, which focuses on food and convenience – are now being priced more sharply than sub-regional centres, which is a historical anomaly,” CBRE head of research Bradley Spears says. “Meanwhile, larger landlords are heavily investing capital into regional shopping centres to ensure their ongoing allure to shoppers.”

Developments such as the Warrawong Plaza in Wollongong’s south highlight the importance for centres to revitalise the local community through a diversification of specialist offerings.

“While some sub-regional shopping centres may be faced with discount department stores either vacating or shrinking their footprint, this presents an opportunity to landlords to redefine their asset as a centre for service, convenience or entertainment,” CBRE associate director, retail investments, Nick Willis says.

Earlier this year, brands Another Burger Joint and Sugar Rush were added to the Warrawong Plaza centre, complemented by the announcement QSR offering Rashays had submitted a development application for a 181-seat restaurant with the Wollongong City Council.

As the Port Kembla and Warrawong areas continue to develop as cultural, food- and service-based destinations, the sharp increase in popularity and population in Wollongong looks certain to continue.

GRIFFITH

Further inland is where true rural opportunities lie however, with