Billions of dollars’ worth of investment and thousands of jobs could be generated in Victoria if new precinct planning is brought forward, the latest report suggests.

Releasing its Principles of Successful Precincts report targeted primarily at Victoria, the Property Council of Australia says an average precinct which costs $2 billion to develop would generate around $5.7 billion worth of economic activity.

It cites numerous examples of well-developed precincts generating economic value.

Internationally, employment in the South Lake Union precinct in Seattle grew by 63 percent over seventeen years between 1995 and 2012 as it transitioned from a post-industrial site to a high-tech precinct.

Even during the 2007-08 recession, meanwhile, 40 international high-tech manufacturing clusters  and 40 knowledge intensive service clusters achieved an average employment growth rate of 11.2 percent and 14.3 percent respectively, according to an analysis performed in 2012.

In Australia, drawing on a 2014 article in the Urban Developer, the Property Council says the $6 billion redevelopment of Barangaroo in Sydney generates around $1.5 billion worth of economic per year.

According to the report, the notion of precincts is an evolving concept in planning circles and there is little agreed definition of what does and does not constitute a precinct.

Instead, it says four types of precincts have emerged:

• Priority precincts such as Fishermans Bend, Arden and Richmond to Docklands, which focus on regeneration and renewal of underutilised inner urban areas.
• Transport focused precinct development, such as areas associated with Melbourne Metro and suburban rail loop stations.
• Nationally significant employment precincts or national innovation clusters such as Latrobe, Monash and Parkville
• Suburban office precincts such as Essendon Fields.

In its report, the Property Council says several aspects are necessary to create a successful precinct strategy.

First, it calls for the creation of a central precincts authority which would promote and oversee development over the full cycle of precinct project developments.

A structure along the lines of former Major Projects Victoria could be applied to the new authority but with a focus on precincts rather than individual projects, it says.

As well, the Council says that:

• Timelines for precinct planning should have a minimum of twenty years and projects should be allowed to evolve over time to facilitate changing community demand.
• Infrastructure should be delivered ahead of population and community need whilst funding should be set aside and delivered via a mechanism through which the developer can work with the government on suitable transport connectivity arrangements.
• Innovative contracting and funding models should be considered in project delivery.
• Consideration should be given to alternative financing models which shift thinking from value capture to value creation. Managed by the precinct authority, this approach should consider revenue share models or long-term lease arrangements as well as freehold arrangements.
• Precinct design should include features which are common to successful precincts. These include the ability to curate a unique precinct identity, 24-hour activation, a flexible planning approach to accommodate multiple uses over the development lifecycle, being located in an area with strong demand for projects and service, sufficient scale to attract larger, private sector players, good transport connectivity, environmental sustainability and good health and liveability.

Property Council of Australia, Victorian Executive Director, Cressida Wall, said the importance of precinct planning should not be underestimated.

Wall said an authority with end to end management powers would create a bridge between the private and public sector, maximising social and economic outcomes.

“An authority, established to advance precinct development, would help Victoria to get more bang for its buck in the crucial COVID-19 recovery period.”

“The next phase of Victoria’s development cycle cannot just be business as usual. It needs big ideas and policy settings that drive innovation, and that is why the Property Council is calling on the State Government to create a Precincts Authority to support and shepherd precinct projects such as Arden through their whole development lifecycle.”

“Any conceptualisation of proper precinct planning must place economic impact as one of the highest priorities, particularly as part of a COVID-19 recovery effort.”

“In the face of challenging economic headwinds and with heightened uncertainty affecting immediate demand and investment, the role of government in the development cycle is even more critical.  By enabling and supporting the private sector to continue to build through the economic downturn, the government can ensure that vital infrastructure and housing supply exist for economic recovery.”

(image above: Geelong Civic Precinct)

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