Brisbane Inner City Investment Prospectus July 2014

Invest in

Fortitude Valley

.

Brisbane City

Kangaroo Point

2| Brisbane Inner City Investment Prospectus

WelcomeFortitude Valley statistical area level 2 (SA2) has been identified as a key investment location within Brisbane Inner City. This supplement provides a snapshot of key economic and investment indicators for Fortitude Valley and has been produced as part of the Brisbane Inner City Investment Prospectus.

Fortitude Valley lies immediately northeast of the Brisbane Central Business District (CBD). The area is characterised by a rich tapestry of new and old buildings, vibrant streets and lanes, and a diverse culture that make it a unique and popular place to live, work and visit.

In 2012, Lord Mayor Graham Quirk consulted with Valley Malls tenants and traders to discuss their ideas for the future of the precinct. At the request of these stakeholders, Brisbane City Council committed to investing $4 million into the refurbishment of Brunswick Street Mall. Completed in July 2014, the revitalised area presents a vibrant mixed-use precinct that includes residential and tourist accommodation, nightclubs, live music venues, cafes, restaurants and retail businesses. The Lord Mayor also appointed the Fortitude Valley Economic Development Board in 2013. The board, comprising private sector representatives, provides advice on economic development in the area and plans to revitalise Fortitude Valley.

Known locally as ‘the Valley’, it is renowned as one of Brisbane’s premier entertainment hubs, well-known for its atmosphere characterised by live music, nightclubs and the arts. In July 2006, the Valley was designated as Australia’s first Special Entertainment Precinct to protect the future of the music-based entertainment industry without exposing local residents or businesses to unreasonable levels of amplified music noise. The area is also home to a variety of restaurants, cafes, commercial businesses and residential buildings that all contribute to the diversity of the local community and visitors to the area.

Fortitude Valley plays a vital role in the growth of Brisbane’s economy. It provides an extension to the commercial function of the CBD, while ensuring the cultural heritage of the area and the Special Entertainment Precinct are maintained and enhanced. According to 2013 Australian Bureau of Statistics (ABS) data, there are 1875 registered businesses in Fortitude Valley.

The Fortitude Valley local population can be characterised as well-educated, high-income earners, mainly consisting of couple families with no children that reside in apartments. Future growth and development is evident with a number of residential and non-residential development and building approvals being granted for the area.

Map of Fortitude Valley

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New Farm

Newstead - Bowen Hills

Spring Hill

Fortitude Valley

Kelvin Grove - Herston

Statistical area level 2

Neighbourhood plan boundary

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Location

The Fortitude Valley Neighbourhood Plan came into effect on 1 October 2010. The plis now a legal document and forms part of Brisbane City Plan 2014.

Neighbourhood plans can help facilitate economic prosperity, protect character development, provide for open space, include standards for new development and reflect improved infrastructure such as new transport routes. The Fortitude Valley Neighbourhood Plan sets out how land can be used and developed over time and seeks to:

• reinforce Fortitude Valley as a major entertainment, cultural, tourism, retail and business centre

• support growth and increased building heights

• establish a ‘special context area’ that protects character and heritage

• improve the public domain with wider footpaths, cross-block links, small-scale spaces and new public spaces

• reinforce a strong link between land use and public transport

• extend the Special Entertainment Precinct buffer.

Fortitude Valley is home to some of Brisbane’s landmark retail and cultural destinations including Brunswick Street Mall, Chinatown Mall, James Street precinctEmporium precinct and the Homemaker Centre precinct.

Brunswick Street Mall is a pedestrian mall that offers retail, dining and entertainment options, day and night. The mall’s centre stage provides an open-air venue for live entertainment.

an

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Chinatown Mall is a hive of activity that draws locals and visitors for its abundant alfresco dining options and lively program of festivals, events and performances held year-round. The pedestrian mall re-opened in 2010 after undergoing extensive refurbishment.

The James Street precinct has emerged from the area’s industrial past to become a destination well-known for its boutiques and high-end retail offerings. This retail and lifestyle precinct is also home to a variety of dining options and Palace Centro cinemas. Key retail centres are James Street Markets and Centro on James.

The Emporium precinct offers luxury retail and dining, and includes a boutique hotel, residential apartments, fashion retailers, cafes and restaurants.

The Homemaker Centre precinct is strategically located with frontage to two of Fortitude Valley’s busiest streets, Ann Street and Wickham Street. This location provides excellent exposure for tenants. Servicing the growing need for bulky goods retail to the growing inner-city population, the Homemaker Centre has 10 anchor tenancies and 23 specialty retailers.

Population and growth projections

Fortitude Valley will see significant population growth over the next 25 years. The population in 2011 was 5545 people and is forecast to increase to 16,334 people by 2036 (see Figure 1).

Figure 1 – Population forecasts Fortitude Valley, 2011-2036

2011 2016 2021 2026 2031 2036

Peo

ple

Year

0

2000

4000

6000

8000

10,000

12,000

14,000

16,000

18,000

Source: Queensland Treasury and Trade, Queensland Government population projections, 2013 edition (medium series), Queensland Government Statistician’s Office, Queensland Treasury and Trade, Brisbane, 2011.

The median age for residents of Fortitude Valley in 2012 was 31.1 years, well below the Greater Brisbane (greater capital city statistical area) median age of 35.1 years. The age profile of Fortitude Valley is illustrated in Figure 2 below.

Figure 2 – Estimated resident population by age Fortitude Valley, 2012

16%

¢ 0-14 4%

¢ 15-24 16%

¢ 25-44 60%

¢ 45-64 15%

¢ 65+ 5%

60%

15%

5% 4%

Source: Australian Bureau of Statistics, Population by Age and Sex, Regions of Australia, 2012, cat. no. 3235.0, ABS, Canberra, 2012.

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The population of Fortitude Valley is characterised as mainly couple families with no children (see Figure 3), almost all of which reside in apartments. Seventy per cent of occupied private dwellings in Fortitude Valley are rented, which is significantly higher than the proportion across Greater Brisbane.

Figure 3 – Family composition Fortitude Valley, 2011

76%

16%

8%

¢ 76% (671) Couple family with no children

¢ 16% (136) Couple family with children

¢ 8% (70) One-parent family

Source: Australian Bureau of Statistics, Census of Population and Housing, 2011, Basic Community Profile – B25, ABS, Canberra, 2011.

Residents of Fortitude Valley are well-educated with 74% of the population aged 15 years and over holding post-school qualifications, around half of which hold a bachelor degree or higher.

In the 2011 Census, approximately one-third of the population of Fortitude Valley indicated that they were

born overseas. Less than 5% of those born overseas indicated they spoke English not well or not at all when asked about their proficiency in spoken English.

The residents of Fortitude Valley are employed across a wide variety of occupations. The top-three occupations identified in the 2011 Census were Professionals, Clerical and administative workers and Managers. The occupation profile of Fortitude Valley is illustrated in Figure 4 below.

Figure 4 – Employment by occupation Fortitude Valley, 2011

36%

16%15%

10%

9%

8%

5%

1%

¢ 36% (1192) Professionals

¢ 16% (520) Clerical and administrative workers

¢ 15% (484) Managers

¢ 10% (328) Community and personal service workers

¢ 9% (284) Technicians and trades workers

¢ 8% (261) Sales workers

¢ 5% (177) Labourers

¢ 1% (64) Machinery operators and drivers

Source: Australian Bureau of Statistics, Census of Population and Housing, 2011, Basic Community Profile – B45, ABS, Canberra, 2011.

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Employment forecasts and business information

In 2013, 1875 businesses were registered in Fortitude Valley. The top-ten industries by business count for employing businesses in Fortitude Valley are illustrated below (see Figure 5).

Figure 5 – Top-10 industries by business count Fortitude Valley, 2013

24%

22%

12%

9%

9%

7%

6%

4%4% 3%

¢ 24% (369) Professional, scientific and technical services

¢ 22% (350) Rental, hiring and real estate services

¢ 12% (181) Financial and insurance services

¢ 9% (148) Accommodation and food services

¢ 9% (140) Retail trade

¢ 7% (110) Construction

¢ 6% (93) Administrative and support services

¢ 4% (69) Health care and social assistance

¢ 4% (62) Other services

¢ 3% (46) Wholesale trade

Source: Australian Bureau of Statistics, Counts of Australian Businesses, including Entries and Exits, June 2009 to June 2013, cat. no. 8165.0, ABS, Canberra.

Employment in Fortitude Valley is forecast to reach 32,362 people by 2031, a growth of 11,769 people (57%) from 2011.

The top-five employing industries in Fortitude Valley (see Figure 6) will contribute almost three-quarters of total employment growth for the area.

Figure 6 – Employment by industry (top-five) Fortitude Valley, 2011-2031

Business services

(incl property)

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10,000

Retail Health and community

Government Hospitality

¢ Growth 2011-2031 ¢ 2011

Industry

Empl

oyee

s

Source: National Institute of Economic and Industry Research (NIEIR), 2009 Economic Activity and Employment Forecasts, NIEIR, Melbourne.

Availability of skilled workers is important for the area. Workers in Fortitude Valley commute from various locations. The top-three locations in which workers live are New Farm, Newstead-Bowen Hills and Hills District. The journey-to-work profile for Fortitude Valley is illustrated in Figure 7.

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Figure 7 – Top-10 places of residence for workers commuting to Fortitude Valley, 2011

0 100 200 300 400 500 600

New Farm

Newstead-Bowen Hills

Hills District

Morningside-Seven Hills

Coorparoo

The Gap

Ashgrove

Paddington-Milton

Brisbane City

Clayfield

Workers

Com

mut

ing

from

Source: Australian Bureau of Statistics, Census of Population and Housing, 2011, ABS, Canberra, 2011.

Building and development activityIn the 12 months ending 31 March 2014, there were 401 dwelling units in new residential buildings approved in Fortitude Valley, with a total value of $90 million.

The total value of non-residential building approvals in Fortitude Valley SA2 in the 12 months ending 31 March 2014 was $69 million.

There are a number of projects currently under construction in Fortitude Valley including Wickham 358. Scheduled for completion in mid-2015, the development will be a 15-storey commercial tower providing 22,100 square metres of net lettable area commercial space and 783 square metres of retail space at ground level.

The recently opened Alpha Mosaic Brisbane Hotel is an 18-storey mixed-use tower that includes residential, retail, commercial offices and a boutique hotel. The development offers 51 hotel rooms and 213 self-contained residential apartments.

Opened in November 2013, M&A James Street is a mixed-use development in Fortitude Valley featuring a twin tower apartment block comprising 234 one and two-bedroom apartments over 21 levels. The development also consists of a commercial tower, known as 825 Ann Street, which has provided an additional 17,500 square metres of A-grade commercial office space.

A $600 million Elenberg Fraser-designed building bordering Brunswick Street, Alfred Street and Barry Parade was approved in June 2014. Scheduled for completion in 2017, the building will include 900 apartments, a 90-room 4.5 star hotel and a ground-floor retail precinct.

Growth in floor areaAvailable floor space in Fortitude Valley in 2011 was estimated to be more than 830,000 square metres and is expected to increase by more than 50% by 2031 (see Table 1).

Table 1 – Floor space forecasts Fortitude Valley, 2011-2031

2011 floor space 2016 floor space 2021 floor space 2026 floor space 2031 floor space Fortitude Valley estimate (m²) forecast (m²) forecast (m²) forecast (m²) forecast (m²)

Retail 295,145 322,135 359,792 404,867 425,734

Commercial 151,435 168,030 187,499 209,919 226,581

Industrial 149,424 156,818 160,017 167,957 173,019

Community purpose 221,981 266,884 316,063 376,838 435,721

Other 12,202 11,900 11,882 11,759 11,586

Total 830,187 925,767 1,035,253 1,171,340 1,272,641

Source: Queensland Government, Department of Transport and Main Roads, Employment Projections converted to floor space by Brisbane City Council.

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