The future of Greater Sydney’s Urban Services

SGS Economics and Planning has supported the Greater Sydney Commission’s development of industrial land policy in the recently-released Draft Greater Sydney Region Plan.

Urban services are a collection of industries that support the development, operation and liveability of the city. They comprise of a diverse mix of industries including storage, building construction, postal services and building support services. The locational and operational characteristics of these industries means that they are often located in industrially-zoned precincts. Unlike heavy manufacturing or major freight and logistics activities, their relationship with local businesses and communities means they cannot be confined to the outskirts of a city or otherwise isolated from residential areas. Instead, they need to be distributed throughout urban areas in proximity to their suppliers and customers. This locational necessity, however, often places them in competition with other uses such as residential development and retail which often offer a higher land value than urban services or other industrial uses.

SGS’s recent study for the Greater Sydney Commission (GSC) prepared an evidence base to inform how much land Greater Sydney needs to provide for crucial urban services activities, and the impact of a growing population on future demand. This report helped the GSC shape the industrial land policies set out in the Draft Greater Sydney Region Plan (a link to the plan’s website can be found here).

For the purposes of this study, SGS defined a guideline benchmark of three square metres of urban services land per person. While not a definitive benchmark, it provides a basis for comparison for Sydney’s districts. This is based on analysis of urban services land in the Canberra and Queanbeyan urban area and was chosen due to the relatively contained nature of this economy [1].

SGS’s study found:

  • The Eastern City, North and South districts [2] all have less than three sqm per person of urban services land
  • By 2036, all Districts will see a reduction in urban services provision per person and the Central City will fall below the three sqm per person benchmark
  • Pressure for industrial land will intensify due to urban services competing with other industrial and non-industrial uses for land near to centres and trade gateways
  • Smaller industrial precincts (<1 hectare) have a high proportion of urban services jobs and play an important role in accommodating industries that service local populations or businesses. This is particularly prevalent in the Eastern City, North and South districts.
  • There is an inverse relationship between land values and per capita urban services provision. The higher the land values the lower the per capita provision (e.g. Eastern City, North and South Districts). This reflects the greater utilisation and productivity associated with land of higher value.
  • Industrial precincts in the Eastern City, North and South districts are under pressure and should be protected or managed to ensure appropriate urban services activities are supported. Precincts in the Central City require careful planning to ensure that there is adequate supply to meet future urban services demand.

SGS’s recent study for the GSC “Sydney’s Urban Services Land: Establishing a baseline provision”, draws on our extensive knowledge of Sydney’s industrial land supply. It highlights the importance of industrial lands throughout Greater Sydney and not just on the outskirts. These findings informed the GSC’s industrial land policy as detailed in the new draft Greater Sydney Regional Plan (2017).

Over 10 years, SGS has worked with some 20 local government areas to complete detailed, on-the-ground industrial land audits. Collectively, we have audited over 25,000 buildings across 20,000 lots. This extensive knowledge provides SGS with unparalleled insights into the operations of industrial precincts and the businesses that occupy them. SGS’s experience has helped the GSC and NSW Department of Planning and Environment to plan for the supply of industrial and urban services land through evidence based policy that focuses on Sydney’s future needs.

SGS’s report undertaken for the GSC can be found here.

The draft Greater Sydney Region Plan can be found here. Objective 23 outlines the Commission’s position on Industrial lands.

Figure 1: Urban Services growth by District

Figure 2: Per capita urban services land area provision (sqm)

[1] Unlike larger cities of Sydney and Melbourne, the ACT does not have a significant trade gateway such as a port of major international airport and lacks larger scale industrial activities servicing inter-regional markets.

[2] SGS’s study was completed prior to the update to district boundaries and names