Steve Grant: Steve Grant, Capital Bluestone. Our business has been going for 27 years this year. I walked into Norwest Business Park before there was a building built and – just an opportunity. And it’s been great for us. We’ve done 45 buildings. Esplanade is our latest that we have underway at Norwest, on the site of the Ice Skating Rink. And I’m very pleased to be here and to give some thoughts.
Michael Edgar: Michael Edgar, Group Manager – Strategic Planning, Hills Shire Council. A local government career of slightly over 30 years – 11 of them here at the Hills. I don't think I need to tell too many people around the table the Hills is really, really booming. And it’s really, you know, on the back of the economy broadly but thanks to – in a lot of ways – the investment of government in critical infrastructure – road and rail – to be honest.
David Inkster: David Inkster, PRD Norwest – local, commercial and residential real estate agent. We’re involved very much with this project at Esplanade. Thank you, Steve. We’ve been in business for 18 years and we’ve seen a lot of changes. I only echo the last 2 people in my thoughts around that. But excited, I guess moreso, with what’s to come.
Jim Taggart: Jim Taggart. Known to most of you for a variety of reasons. Very pleased to be here, if I can say. I do some consulting work. I think that’s probably the easiest way to say it. I don't really know what to say.
Michael Walls: Michael Walls. I’m the publisher of Western Sydney Business Access and several other publications. We’ve been a gold partner of the Hills Chamber for some years and we are very connected in the region, sponsoring major regional events such as Tropfest, the Corporate Triathlon series and so on. The Hills is a very important part of our base. Thank you everyone for coming along today.
Andrew Frank: Andrew Frank. I’m Managing Director of Frank Legal. We’re a legal firm that has 2 divisions – that’s business and corporate, and personal. So we’re very concerned about the individuals in the Hills, but we’re also concerned about business and corporate in the Hills. The firm has 3 significant pillars that we base our whole practice on. One is knowledge – knowledge for us, knowledge for clients, and knowledge for the broader community that we want to share. The second one is integrity – and that is, the whole notion of ensuring that, you know, work’s done in a way that achieves the goals for the clients – client ... all the time. The third element which is important is community, both within the practice and beyond the practice. We see that lawyers have a very important role to be part of the community, serving the community within the community.
Anthony Moss: Great. Thank you.
Alicia Sylvester: I’m Alicia Sylvester from Left Field Public Relations. We work very closely with Capital Bluestone across their projects across Sydney. We specialise in property development. We know that people have a fundamental fear towards change and it’s our job to connect with and partner with the community to help them overcome this natural fear and to help them get excited about how their community is changing, particularly here in the Hills. We have quite a few clients around this area. It is such a boom area. And it’s about getting community on board with the opportunities that come with that kind of growth.
Richard Holland: Richard Holland from the Sydney Hills Business Chamber. I’m the Membership and Engagement Manager. It’s a role that I take very seriously and I love. We basically help people to connect, to develop, to promote and also to speak within the local area. And I throw in behind that my 22 years of networking and being around businesses and helping people and working for several businesses before. So yeah, we’re here to help people basically.
Shahzad Khan: Shahzad Khan – basically looking after the Novotel Norwest. We own and built the Novotel Norwest in the Park. And when Michael was talking about how the area is booming, we’ve been part of that booming. We’ve witnessed it the last 20 years. We’ve got a couple of plans for the hotel, going forward. So, thank you Michael, for the invitation.
Nabil Chammas: Nabil Chammas, KPMG, Tax division. In a previous life I managed a key function for an investment bank. I have a mix of financial services and tax experience, and I’m heavily focussed on the property sector as well, from an indirect tax perspective. Very pleased to be here today as I’m originally from the Hills district. It’s amazing coming here every time, there’s always something happening, the area continually changes. I think this was always going to be the case, it was just a question of when.
Kristen Tod: Hello everyone. Kristen Tod, Managing Director of Young Living Essential Oils. We were very excited to relocate our business in January this year from Brisbane – the outskirts of Brisbane. It’s been a very good move for us. But we’ve had a very major problem insomuch as we made a relocation offer to 14 of our staff to relocate – generous packages to relocate – two accepted and both of them have gone back to Brisbane. They cannot afford to buy a home in the Hills. Major brain drain for us.
Anthony Moss: Thank you for sharing that with us, and that’s a bit of context for our discussion. Thank you. And Geoff?
Geoff Brailey: My name is Geoff. I’m from McCrindle Research. So, I’ve been involved in the research behind today’s discussion. And it’s a privilege to be here. I’ve worked in the Hills area before, working at McCrindle, in community organisations and it’s kind of been great to work into social research. So, a real love of people, I guess, is one of the drivers in working at McCrindle and seeing the data about people come to life, through things like our infographics. Through our research, we know the times and understand the social trends; the attitudes, behaviours of Australians. That’s what we love finding out through surveys, etc.
Anthony Moss: Excellent. Thank you, Geoff. Thanks, everybody for introducing yourselves. I guess I should have started too. I’m chairman of the Sydney Hills Business Chamber at the moment – my second year in that role. And that’s a real honour for me to be able to do that. That’s what I call my “early morning and late night job”. My day job is running my own strategic planning consultancy working with high growth small and medium privately owned businesses, particularly those that are looking to expand internationally. So, thanks everyone for being here and introducing yourself. That’s excellent. Let’s jump straight into it if we can. Can we perhaps set some context around what is happening in the Hills and the dynamic we talk about – and we’re always a little blasé about it, I guess. it would be great to be able to identify what are those changes that are taking place. I mean we know we’ve got the Metro Norwest happening. We know we’ve got development happening. We know we’ve got Council amalgamations happening/not quite happening in this region. We know we’ve got demographic changes. We know we’ve got an economic shift happening and we’ve got businesses coming in and leaving the region too. I thought it might be useful to start with Michael in terms of putting some context around those shifts that are taking place in the region?
Michael Edgar: I know we’re here to talk about the Hills. But we are part of a broader region of North West Sydney, with Parramatta, Blacktown, ourselves and, to a lesser degree, Hawkesbury. The region is very important in terms of the growth of Sydney as a whole. Between the Councils I’ve mentioned, there’s effectively the population of Canberra to move in. Much of the land is already zoned – possibly not all serviced -that takes time to roll out over a long timeframe. But certainly, the critical infrastructure projects you talk about, really serve to be a catalyst for investment and that growth. I think, if you even just look at Norwest Business Park from its very humble beginnings in the 80s – and you referred to it earlier, Steve – I think shots in the arms that come along were on the back of major investment in infrastructure, whether it be the M2, then the M7 and now the connection to the freeway going north, and clearly the North-West Rail Link. I think the thing that people need to reflect upon with the North-West Rail Link is that we have not seen a service like that in Sydney let alone Australia. A train that comes not to a timetable, but every 4 minutes, can move rapid amounts of people very quickly, we haven’t had that here. And I think one of the important things we need to do is make sure that we not only have origins from those stations – so people that leave and go and feed the productivity arc of Sydney – but reasons to also move from within. So, around those station precincts over the next 10, 20 years, housing is important – no doubt about that. But crikey, so are jobs – and jobs closer to home. If we’re really going to meet the goals of Federal and State Government about jobs closer to home, we’ve got to really focus on what jobs we need to attract in, what are the elements that make people want to be here and to locate their business here.
Kristen Tod: I think affordable housing is the key.
Michael Edgar: And that’s been the problem in 30 years of my career so maybe we might solve it by the time I finish! But one thing I would ask you all to be aware of – and you may or may not be – but this week the government released the District Plans for Greater Sydney for public comment. It’s under the umbrella of the greater Sydney Commission and is a real opportunity for the logical and systematic rollout of land use and infrastructure planning to underpin our quality of life into the future. But we’re in the West Central sub region. Clearly, there’s a big emphasis on Parramatta and growing Parramatta’s role in Greater Sydney into the future, both in terms of housing and employment and as a real global city in its own right. So, I’d encourage everyone to have a read of that. It sets a lot of policy objectives around housing affordability and where the housing supply is, where the job supply is and where are the priorities. And, I think every business should have a look at that plan and see how they might contribute or otherwise to that plan.
Anthony Moss: You look at the population numbers they’re forecasting – to go from 971,000 in 2016 – an increase of 800,000 by 2036. That’s a significant number. Steve, I guess, Michael’s reference was in terms of the sort of changes is about to face, you’ve seen a lot of changes that you’ve also contributed to as part of that kind of infrastructure growth in the region. How do you see, the changes that have taken place right now and the impact on the community?
Michael Edgar: The Hills Shire is 380 square kilometres – round figures. Lost a bit to Parramatta – 12 or 14 square Kms or so. But of that, the urban footprint fits into about a quarter of it. So, when you get beyond Maraylya and Dural, it’s quite rural. And its part of our resources we need and it’s not only agricultural and flower growing lands, but mining, extraction for sand and sandstone that supplies materials for Sydney’s growth. Our Shire extends, all the way up to Wisemans Ferry. It’s very diverse region.
Steve Grant: It’s hard to imagine. When you hear those numbers, what does it mean, how many buildings is it, how does it go. And it’s a strange sort of phenomenon as far as the residential is concerned. Where do these people come from? This is a challenge that we have, of course, is to know where to market our projects. I’ve done retirement buildings for years and you find out people retire in one of a few places – where they grew up and where their family are or where their family go for holidays. And as far as where people live, if you live in the Eastern Suburbs now and you’ve got kids in their early 20s, you start to think about where are they going to buy a home, where can they afford a home. And of course, you know, that’s when they look for places – Kellyville, etc. One of our businesses, Eden Brae Homes, build at The Ponds at Kellyville, for instance. And as far as product being the right price and how it works, I think there was 8 builders there and we got 48% of the product. If you get the numbers right, you know, there’s a pretty good reward as far as the business is concerned. But also, for people that work for us, for instance, one of the young chaps is I think already in his fourth home now. We all know that, if you live in that home for a year or so, or 2 years, it’s tax free if you sell it. So those young people have got that run on. So they’ve got a good story for people that are coming from interstate. When we built one particular place here at Norwest, we relocated a company to come here from Chippendale. And the company had 35 staff. And they made a decision to come to Norwest. And we found that within – I think it was 18 months, about 25 of those 35-staff had actually moved out here, because they saw it as a good opportunity. The big challenge for business, which I think is a big attraction for people who want to live in this area, is we haven’t grown our infrastructure lately. And that’s a real concern for people like ourselves. I travelled up from the Southern Highlands this morning. It took me an hour and probably 30 minutes to get to the turnoff on the M7. And it took me 40 minutes to get from the turnoff on the M7 to here. And that’s just disgraceful. As a community, we’ve got that totally wrong and we have not put enough effort into sorting that out. And I don't care what position you play – whether it’s my position or the Council or Norwest or the RTA – it’s disgraceful. To sit there, you know, and crawl all that way down to here, we just can’t allow that.
Michael Edgar: Council has about $500,000 in funds that can be made available to put lights on the roundabout. The RMS are the lead agency and the Minister’s announced it, I think yesterday. So, a good interim solution but not your final solution. But it’s a good interim solution. The big fix is a very big fix. And it’s an expensive one, both for land take, but also just the movement of utilities. For example, there is a massive water main there that’s got to move.
Kristen Tod: Can I just add to that? Out of the 40-odd people that I’ve offered a job in the last 12 months, probably 4 have turned down the job, because they don’t want to travel along Norwest Boulevarde.
Andrew Frank: Anthony, picking up on what Steve said, I’ve come here with the catch phrase of: It’s not competition, but integration. And so often, everything gets distilled down to what’s good for “me”, and we lose sight of the bigger picture, as is exhibited most emphatically by the jobs and housing relationship. And that’s why I’m excited by what Lucy Turnbull’s published in one sense, because it’s big picture thinking. It’s recognising 3 centres of Sydney. And I think that’s important. But then the challenge is for Council to try and make that work in terms of integration with the other government departments and the other needs – both release of land, both making the construction of housing affordable. We find new home owners and others being able to borrow ridiculous sums of money on average income. And so, it’s the availability of money which is creating a competition in growth, which is I think something that has to be managed. I’m not quite sure how. I don't have that wisdom. And yeah – but it’s about integration. And we must think. Council, business, developers must sit down and think much more about how we integrate the elements of society to make it a society that we want to live in, but we don’t want to travel from, because we spend most of our time travelling from our homes to work, when in fact we should be really working near homes. A bit like the old “village” system of generations gone by.
Anthony Moss: Excellent. I also just wanted to clarify, really, that the objective this morning is to get the opportunities and challenges on the table. And, after the break, focus on some of the ideas for solutions that we might have.
Michael Edgar: If I could just add one thing, though. And I’m glad most people are aware of the Greater Sydney Commission’s work. And to me, it represents a real opportunity. So, if business understands that, next year you’ve got 2 other opportunities to influence government spend. One is the update of the Metropolitan Plan itself. But importantly, the Metropolitan Transport Plan, which deals with roads, rail, buses – the whole lot. I feel that business is too silent on those documents and doesn’t give its input to help government to make good decisions about how you integrate – because often it is a competition. Governments can’t do everything at once. So, what are the right things in the right order? And I think – I’m actually really optimistic that people around the table knew about that document, the updated plans next year are where we will see how well government responds and its spend over the next 10, 15, 20 years to match the priorities.
Anthony Moss: Shahzad, you operate a hotel in the region. I guess you’re a reasonable of activity in the region too. What comments, do you have in terms of the opportunities for growth potential for this reason?
Shahzad Khan: Thanks Anthony. It’s absolutely no secret that the opportunities are growing by the day. The size of the pot maybe hasn’t expanded, for obvious reasons. But with high rises and other projects, residential capacity is increasing, and so is an opportunity for more people to come here to work. And we can see that. We’re the only hotel in the Park – fully serviced hotel in the park. And we have the exclusive rights to it. Four years ago, Adina Apartment opened and our business took a bit of a hit. But we’ve recovered that and in fact we’re doing better as far as occupancy rates are concerned. And they haven’t lost their business. And the Hills Lodge has recovered theirs. And now we have another apartment – serviced apartment block – about 96 odd rooms – 140 actually. So, the supply has increased as far as hotel accommodation is concerned. But so, has the demand.
Anthony Moss: So it reflects a rising tide?
Shahzad Khan: Absolutely. But the trouble again, going back to ... performance, is it’s been 2 years we’re short of staff in the kitchen – and the reason being, most of our staff – Jim knows very well they’re excellent people and we’re very, very fortunate because they local. So, the head of our HR Department has been there before. She was the first person we employed – before anyone else was employed. So before the hotel opened, she was there and she’s still there, which is fantastic. But if she moves on, we don’t know what to do. We’re struggling to recruit staff because that which is available is, you know, not plentiful skilled – say, for example, kitchen people, cooks and chefs – and we can’t bring people from outside the Hills for similar reasons. They don’t want to be sitting at the traffic light, staring at it, whilst it turns from red to green about 20 times and they haven’t moved 6 inches. So, to answer your question, Anthony, I just wonder – I hope I’m still alive in 5 years’ time – That we can see some changes in 5 years’ time. It’s exciting. I mean I hope we’re all, you know, in good shape and still here to enjoy that growth.
Anthony Moss: Excellent. Thank you for that. I actually have a reference to PSI in a minute, but not until we’ve really gone around the table, and we’ll talk about what are the outcomes of the sort of PSI. But perhaps if I can get Nabil you’re obviously dealing with lots of businesses in the region, too. What are the challenges and opportunities you’re hearing from your client base?
Nabil Chammas: Just talking to a number of points that were made today, I think the challenges are to seek markets nationally, internationally, outside the west. There’s a big push on being more efficient in what they do, being more productive, and attracting the right talent. I keep hearing a common theme saying: Yes, there’s a very sophisticated workforce in the Hills. But predominantly it’s people that have either grown up in the Hills or live close by. Kind of broadening that, from a Western Sydney perspective, it’s a similar story. But how do you attract the right talent who are willing to come out to Western Sydney? That’s one of the challenges. There’s a massive focus on being more efficient in how we do things and there’s a number of regions that are doing programs like in the South West or South Sydney, called Southern Strength, which is around agile manufacturing and I believe is working well. To the extent there’s something similar for the Hills, that could potentially also work. On another note, our clients are big on data. Discussing what has been said on the PSI, data links – understanding data and how that drives decision making on a day to day basis is massive for a lot of our clients. These are really the main challenges. Western Sydney is growing really well. You can see there’s government commitment which is great. Mike Baird’s government’s actually doing things. Having said that, how do you attract the right people? There’s clearly a sophisticated workforce, but broader than the people that live in the area
Anthony Moss: Thank you. Richard, you deal with many businesses. At least 340 of them are members of the Chamber now, and many more businesses that are prospects too. What are you hearing about the kind of opportunities and challenges that business experiences?
Richard Holland: From what I can sense of from people who talk about what’s going to happen development-wise, I can see it crystal clear in my head. But I think a lot of people still don’t get how it’s going to change, how different it’s going to be and all the opportunities there. So, that’s exciting in a lot of ways, because I mean there’s some flowering that goes on. I think especially the catalyst will be the rail link, once that happens. The 2 biggest things that I hear over and over again is parking and people. Parking, traffic and people. And it’s diabolical. I’m in that bottom end. It took me – I put it on Facebook – it took me 50 minutes to go from Meridian Way at 6 o'clock, to get out onto Old Windsor Road, going out that way one night.
Anthony Moss: So, there’s lot of challenges. But by the same token then, I mean there are changes growing quite dramatically.
Richard Holland: Look, there’s always, you know, there’s plusses and minuses. They’re simply the 2 biggest ones that I hear about attracting people, the nightmare of the traffic, people not wanting to come. But, you know, I think there’s still a hell of a lot of opportunities – and the types of businesses coming into the Chamber now is very different.
Anthony Moss: And how do we manage them. Jim?
Jim Taggart: I’ll just make a couple of comments and try and look outside of the see-saw. From a celebration or an opportunity point of view, I would suggest if you form – even though you’ve got here a Norwest Council, I think there’s a lot of collective that you could get from the people here – because with the Commission’s views and so on, you know numbers talk. So, if you write off individually, it’s only seen in that context. So, I’m suggesting to you, around this table is some 60,000, 80,000 people. And I think you need to understand the significance of that. Daily, 33,000 people come into this Park, approximately. Whether it’s 29 or that, it’s a big number.
Andrew Frank: So, there’s about 33,000 people come into this Park?
Jim Taggart: That's right. 33,000. So, what I’m trying to say, again – with the Commission reports – and Michael’s right, next year’s 2 reports are really critical.
Anthony Moss: OK. So, I think we’ve captured 2 key issues here, which is people and management and staff, attracting and keeping people. And there’s no doubt about it: that whole traffic and infrastructure is a potential impediment for business in the region. That said though, David, it probably is no better time to be in real estate, is it?
David Inkster: I hate to sound a bit mercenary here. But I will.
Jim Taggart: You don't mean that at all.
David Inkster: We’ve been going for 18 years. And the change in the scene – I mean 2009, for example, the Business Park occupancy – the vacancy was sitting at about 16% - 15%, 16%. Today, it would be under 6%. And I mentioned our relationship here in regards to the commercial component – certainly sort of 3 floors – 3600 square metres of commercial space approximately released, you know, in this development. Those of you who have been around the local area would know that, you know, commercial has sold well off the plan here in the Business Park – and that’s quite unusual. But we even surprised and I think even Steve with how quickly this flew out the door – within sort of 10 to 12 weeks of marketing that space, which is over 36 offices, we’d agreed terms with pretty much everyone. We certainly didn’t anticipate it. And I think it sort of speaks to the fact that there is immense pride in being involved with the wider community of the Hills community. It’s an incredible district.
Steve Grant: It was very exceptionally well-priced as well, David.
David Inkster: No, you’re right. It’s – in terms of price, though, we actually – we surprised ourselves in that regard. And the rates achieved here in Esplanade for the commercial were a new benchmark.: So everyone that owns an investment in Norwest benefits from that sales process. We were talking – prior to marketing here, and Steve and I had some robust discussions around price – that 4 and a half to 5,000 a square metre was pretty much what you were paying for commercial space.
Steve Grant: For good office suites, the best available.
David Inkster: For the best stuff in Norwest. And that was echoed by what we achieved in Atlas, the previous commercial development. Our average for here was 6900 a square metre. And we were selling in the last stage over 7 and a half thousand a square metre. So, that means that every, you know, business that is already here substantially would have increased the value of their premises.
Anthony Moss: And you’re just highlighting the fact that, despite the challenges that we talked about, there’s an appetite to come into this region. We also need to recognise, of course, that we’re not just Norwest Business Park. We are broader than that. Alicia, did you have anything that you wanted to add to that?
Alicia Sylvester: From our perspective, we’ve talked about the population needs to increase. And there’s obvious population targets. We need to accommodate those people. And how we do that is a shift towards apartment living. But I think the Hills is traditionally a house and land area – you come here to live on land. The area has the rural properties where acreage is an incredible lifestyle. It’s about an enlightenment process, I guess, about the benefits or the attractiveness of living in apartments. It is a new lifestyle. So, that’s an opportunity and a challenge at the same time, it’s about shifting people’s perspective of what traditional Sydney living is. And the new way of living and the low maintenance lifestyle is just as legitimate as a house and land.
Anthony Moss: That’s a good point. We hadn’t captured that point. But it’s a very key issue. And so, it will require a cultural shift, all those things. I’d like to talk about the PSI if we can, just so that everybody’s aware of it. The PSI – Performance Sentiment Index – is an initiative that the Chamber working along with the Council and McCrindle Research developed about 2 years ago, which was the idea to create a snapshot of the performance and sentiment and conditions for business in the region.
Geoff Brailey: I think you can see in the report, the Hills as an LGA has had a 65% increase in the number of businesses from 2013 to 2015. So now, a total of over 32,000 businesses. From some anecdotal evidence of living and working in the area over the last 7 years and I’m probably one of the newest in the area from around the table from what I gather. But I guess the strengths of the Hills are the lifestyle factors –I think even the community and the family expectations in this area that are where there is that frustration – residents that are driving 45 minutes because of the traffic, when it only takes 10 minutes at 10pm at night. But that frustration when people might be spending more time sitting in the traffic rather than they get on annual leave over the year. So, there’s that kind of frustration, I think. One key social trend is that people are more people are studying and are living at home longer. The Hills has a higher average household numbers compared to the Sydney average possibly because– these days, younger people are studying longer. One in two Gen Z will have university level qualifications. People are studying longer, delaying their earning years and in an increasingly challenging financial kind of environment, young people are looking for the most affordable opportunity to get into the housing market. Trading the backyard for the balcony, this kind of language – where it means you don't have to wake up on Saturday morning to mow the lawns. You get to go and have a nice latté, which sounds really appealing I think, to be honest. Overall, the 2016 Hills PSI saw a significant increase of 23 points from the 2015 PSI results. In 2016, 164 business owners and managers completed the survey that measures three components; business conditions, performance and sentiment. The biggest area of increase in the nine PSI measures that make up the three components was in the economic conditions. Also, the increase in the future sentiment component was top scoring of the three components. The respondents to the survey indicated economic conditions are getting better and will continue to improve with the future sentiment score rising in the 2016 results. The only decrease of the nine measures in the 2016 PSI measures was around local infrastructure.
Anthony Moss: So we have. Sorry for jumping in. It might be easier for me to jump in there, if I can. So, just to give you the Chamber’s perspective on the survey, the first result that we got – we’re going to measure 3 things: conditions, performance and sentiment – and its algorithm how they combine – we ended up with a negative score. when you scratched the surface and look at the detail, the 2 positives were around future sentiment and current earnings, but the negatives were off the charts. And the negatives were people and staff and infrastructure. Now, what changed to take us positive, was the economic outlook has gone extremely positive. So, it’s gone right up from 29 to 47 as a positive score. But the conditions stayed negative. They improved a little bit from minus 31 to minus 22. There’s 2 sides of the coin that we’ve been talking about. Lots of opportunity, but some real challenges.
Michael Edgar: So clearly, there is a real focus around Parramatta’s future role along with Westmead. And they really plan to amplify the scientific and medical jobs. That provides opportunity for The Hills as well. Not as a competitor to them. There’s a new hospital planned somewhere out towards Rouse Hill. We don’t know the site. But that’s another opportunity for the clustering of medical related industries and jobs. At the moment, the hot property is residential. There’s an insatiable appetite for housing. At some point with the population increase, I think that’s going to switch. And one of the things we noticed across the regions, because I was involved in some of the workshops that put the plan together, was that in some areas Council’s rezoned land that’s employment land over to residential too quick. And at some point, that’s going to need to recalibrate back so we do have enough land for jobs
Anthony Moss: Good. We’re going to delve into that right after the break in some detail.
Steve Grant: So what businesses are going to come to the Hills? What businesses now? So, we’re about to start new projects. We’re going to market. Who do we market to? What businesses are going to come here? That’s my question mark.
Kristen Tod: Well I can give you an example. In fact, Anthony didn’t know this. But in the Norwest Business Park, out of the 200 plus direct sales businesses in Australia, approximately 25 international companies have their headquarters here. So, I would market to the other 200.
Steve Grant: What did you say? Direct sales?
Kristen Tod: Direct sales. So, you’re very familiar with the business I’m in. So, we’re talking about the Amways, the Mary Kays, the Nutrimetics etc. A million Australians are either a customer of or a distributor for one of those companies.
Michael Edgar: So there’s a little opportunity. I would like to just pick up on something that you mentioned in your talk a moment ago. One of the things we’ve got to get right – and we’re spending a bit of time thinking through – and if you look on the wall in this room and the imagery, you start to get a sense of what I’m talking about. We have to do a bit of work on place-making, because that will create an environment for people not only to want to work here but we want people to want to live and work here. And when you start to see – and I think Norwest Lake and the environments and your development here is the window into the future about the place-making. In a way, that’s not a bad alternative to the traditional great Australian dream. But we’ve got to do things that add to that, to make it a place – to make it a place where people want to spend a lot of time and cut down on the need to travel a lot.
Kristen Tod: Steve, didn’t you say earlier you were talking about the “village” atmosphere. That’s what we need.
Steve Grant: When you do these buildings – Michael’s been down to one that we’re doing at Cronulla at Woolooware Bay Town Centre. It will end up with 850 apartments and a $200 million Shopping Centre. But when you do that, there is so much on entertaining those people. And, you know, we’ve got 3 different types of pools – a resort pool for all the families with kids and everything else, a lap pool – a big lap pool – and then you’ve got a rooftop pool, and the rooftop facility across the other side’s got the rooftop theatre, just so our buyers have something special. So, you know – and Michael said to me: Why aren’t you doing this in the Hills? Well, we haven’t got a site big enough. That site down there’s 10 hectares and we’re filling it with a lot of things. But that’s exactly what we’re looking for is something where they’re so proud of it, they want to take their friends up to the pool up on the roof, or they want to take them to the great amenities.
Kristen Tod: Yes. And just one last point. I think it’s critical to your success, Steve, that whilst there are 800 apartments, it doesn’t feel anything like that.
Steve Grant: No. Not a bit.
Kristen Tod: It feels like there’s 100 or 80.
(COFFEE BREAK)
Anthony Moss: So the second half of the agenda is really entitled Creating Solutions for a Prosperous Future. So, we pretty much captured I think 3 key issues. One is the housing affordability. The other is staff retention, acquisition management. And the third is infrastructure and everything associated with infrastructure. We’ve also captured that there’s still very much not just a population growth happening here, but there’s also an appetite for business investment coming into the region. A couple of people came to me at the break and had some thoughts that they wanted to share.
Andrew Frank: Just in terms of – we’re talking about the Sydney Hills, of course – bigger than the Business Park. So, I think we need to always bear that in mind. Again, talking about integration – your comment about mine in terms of the jugular training day – that picture, that model is just a terrific model for us to grasp and to plant in other people’s minds.
Anthony Moss: It needs to be articulated, doesn’t it?
Andrew Frank: Articulated as being the bigger picture and a variety of occupation is – and, you know, the notion that there’s a lot of rural space still left in the Sydney Hills is very attractive as a proposition for many people.
Shahzad Khan: Can I add something please? I grew up in and around London and Oxford. And what Michael and Steve said – the idea, for me, I’m just waiting for it to happen. The idea of having a train every 4 minutes – you don't need to plan it. You need to be in the city at 9:00. You can be at the station at 8:00. And, you know, if you miss one, 3 and a half minutes later there is another coming. This is just mouth-watering. I had a car in London and I only had it because, when I moved from Oxford to London, so I could go back to Oxford whenever I wanted over the week-end. That was the only reason I had a car. And I worked in London for about 9 years. The train – it is – once people realise the facility and the advantages of, you know, having a train every 4 minutes, I don't think anyone is going to – unless they desperately need to – no-one is going to put up with the horrors of driving a car to the city.
Anthony Moss: So when – the train is due to finish early 2019?
Michael Edgar: 2020, thereabouts.
Andrew Frank: Give or take 4 minutes.
Anthony Moss: So at what point – because I mean that is an issue that came out of the focus groups from the PSI2, which is there needs to be an articulation of that vision – of the impact of the train – because there are some people I think at the moment that are dealing with the traffic challenges that see the development taking place, and all they see is more pain – not necessarily the gain.
Michael Edgar: Obviously, the government’s committed to closing the link between Chatswood and the South West Rail Link. So, look, to be honest, the government, I and I am apolitical – should be congratulated for this investment because this is hard wiring us into the future and future-proofing our region and our movement of people. There is widespread criticism recently of Government but I think the investment they’ve done in roads and rail and big infrastructure, is not to be under-estimated.
Andrew Frank: There is one other issue though that I think a lot of people talk to me about when we talk about the rail. And that is: Yes, but where do I park my car to get to the station to jump on the train, when you’re at various stations around here.
Michael Edgar: Well there’s a couple of good commuter spots. One’s at Kellyville. Another one’s at the Showground. But one of the challenges that we’ve got to do around the repurposing of the suburbs of those stations, is actually increase or improve pedestrian linkages that make it more walkable – and make that walkable environment so inviting that you don't want to get your car out. You want to leave it in the garage because you can easily and safely walk to that station. So, that 1 kilometre catchment is really a primary focus at the moment for us. So how do we allow it to redevelop but make sure that there is very, very nice safe laneways through to that station.
Steve Grant: I think also GoCatch. Like when we proposed this project to Michael, I think one of our pitch was on GoCatch cars. So, we’re not far off, for instance in these other cases, supplying that. Let me tell you: down at Woolooware Bay, at Cronulla, we couldn’t get the government to talk to us about the bus service that will be at this big complex once we’re finished. So we said: OK. We’ll do the bus service ourselves. So, we went to the expense. We put on the bus. We bought the bus. And guess what? The bus is irrelevant now, because they’re going to put the controls in. But that’s one thing that didn’t work with government. You couldn’t go and see them until you had an approval. We couldn’t get an approval until we had a bus service. We’re building 700 apartments at Cudgegong, 100 metres from the train. Get all those people from Box Hill to come straight down there.
Michael Edgar: And I think the commuting car parking story is you can never have too much, but you will have too much – if you get what I mean. Even if the carparking is at grade and not underground it’s probably a 17,000 per annum subsidy of that commuter car space, because of the lost opportunity. Building underground is probably $40,000 a car space. So it comes with great cost to the taxpayer to provide so I understand there’s a limit to the amount of commuter spaces that can be afforded. Road investment and particularly regional road investment (M2 and M7 as an example) are critical. I firmly believe that if you took the regional traffic off our local roads, our local roads would perform well. So, I think when these bigger networks get delivered and hopefully they’ve got the feeder points right, so regional traffic starts to get off localised roads we see improvement.
Anthony Moss: Michael, are there numbers around that? You must have done studies or the Council’s done studies around, you know, they’re sort of anticipating so many cars per day coming off the road – kind of like there is on the top with the North Connex – they’ve done analysis around that, haven’t they?
Michael Edgar: They would have some statistics however I’m not aware of the figures so. I couldn’t quote any.
Anthony Moss: It’s probably something that is part of this message around articulating what the change is likely to be when you’ve captured it.
Jim Taggart: I was just going to say, I’m trying to look at a solution point of view. And I look in the ... and see a particular – I’m solutions – I like solutions. Why wouldn’t you securitise those car parks and super funds? Well, I’m taking those principles. That’s really what I’m saying. And I’m really, without looking at Michael, I’m saying this: it’s about innovation. Look, I like love finance and structured finance and all of those types of stuff. But from a technical point of view of saying: Hey, there is that much money out there at the minute – you know.
Steve Grant: The thing is, with those things then, we don’t want all these massive car parks if we don’t need them as well.
Jim Taggart: Yes. That's right.
Steve Grant: So, you’ve always got to design a car park so you can convert it to something later.
Jim Taggart: Yep.
Steve Grant: Because Sydney Olympic Park, which is disgraceful, you cannot have a car above ground. So, just for instance, let’s say the train works perfectly at Sydney Olympic Park in 3 years, in 5 years all those spaces below ground are becoming useless. We don’t want the cars there. They should be building car parks above ground to be able to convert that into office or accommodation or something. And that’s – for me, Sydney Olympic Park is the worst example in the planning that we’ve got when it comes to cater for improved public transport systems.
Anthony Moss: Interesting. Nabil, you also came to me at the break and you had something that you ... around that issue around innovation.
Nabil Chammas: I know it was touched on briefly in the PSI as well. And KPMG is playing quite heavily in that space. In terms of innovation and what that means, we’re having a conversation generally around what is the future of employment for the people that are going to Universities now, what are they going to be working in?, what are they going to be in the future? What are the professions and industries? I look at an area like the Hills District and I think there needs to be a bit of an effort or initiative around: OK. Well these are going to be the jobs of the future now. When you drive up and down you can see there’s a lot of major pharmaceutical companies around here, there’s biotechnology life science companies in Norwest Business Park. At KPMG we’re working quite closely with Western Sydney University. We are part of the Launch Pad initiative. Maybe in terms of the Hills District, on a stand-alone basis, there has to be some thought around ‘we’ve got to do something now via maybe incubation hubs or something to start the thinking’ What’s the future of the Hills going to look like? How do we retain the talent – people that have grown up here, that are in Western Sydney – keep it here, and start thinking about the industries they’re going to be working in. I feel there needs to be more thought around innovation.
Anthony Moss: So, just to follow up from the PSI – because that point came out very clearly from the focus groups that we did at the PSI too, which was: somebody made the comment that we need to create an atmosphere where it’s attractive to live, work and play in the Hills. I thought that was a great line. But I can't remember who came up with it now – but that sense of the Hills as a place to live, work and play. So, let’s take Kristen’s point from earlier on, because we’re talking about solutions now. Your issue was housing affordability.
Kristen Tod: Yes.
Anthony Moss: So how do we address that issue – housing affordability?
Jim Taggart: I heard something the other day. And I just want to run this by you for ideas – to bring other ideas. And one of the other ideas is by another business – a builder/developer who is selling homes. They’re selling their homes with a granny flat in them. Because 2 reasons: as grandparents now – and I want my children to have a house. So, say for Carol and I - we’ve lived our lives – we’re happy to be with our grandchildren, and all of those values we hold close – to live in a nice place at the back of the children’s home, because at the end of the day, you’re going to end up with it anyway, all things being equal. So, I think there’s a conversation around changing attitudes and values of how people live, if they still want that smaller block.
Steve Grant: They’re what we term as a “Fonzie pad”.
Jim Taggart: Sorry, Steve?
Steve Grant: Remember Fonzie and Happy Days?
Kristen Tod: So that’s about the 300 square metre blocks, you’re talking about?
Steve Grant: Yeah, 280.
Kristen Tod: Yes. This is what we need. Absolutely. And I’d like to clarify my statement because, present company excepted, we don’t live in their world. They earn – 70% of my staff earn less than $69,000 a year. How can they afford to buy here? Sorry – with respect. But if we had those Fonzie blocks that you’re talking about, there’s a chance they could buy here.
Nabil Chammas: There’s a conversation around affordable housing, because now a lot of Councils are considering designating a portion of total developments to affordable housing. That’s quite big in the US now. New York is close to 50% - new housing has to go to affordable housing, because they recognise ‘affordable’ now is not 30, 40 grand – it’s 60, 70 grand – and that’s still not enough. I know a lot of councils and I think Lucy Turnbull was recently quoted in the paper, is considering an ambitious proposal, incorporating affordable housing for new developments.
Steve Grant: And Nabil, you know the idea as well is not the fact of you are providing housing, but also so that in Zetland and those areas, they have got a mechanic and have got other trades etc that afford to live in a community because otherwise they have to take their car over to somewhere else.
Kristen Tod: So perhaps the state or the government can subsidise part of that Fonzie pads?
Steve Grant: I don't think they’ve got the money. I think we’ve got to come up with a better answer. One thing that I think that we’re missing in the whole development sort of range is: where is most of that money made. Now, I’m not having a go at the people in Castle Hill. But people that are selling their homes for $4 million, that’s really worth $1.2 million– is that tax free, or should they be paying tax on part of that? If you’re in Canberra, you pay a betterment tax on that difference. The betterment tax then goes to pay for that public housing – because the government can’t raise it from where they are. We’ve all said and done this. The right answer is: where is the money being made? Someone should do a review of that. And I don't mind someone having a house that’s $1.2 million but getting, you know, twice that for it. But 3 times or 4 times for it is ridiculous, without paying any tax on it.
Andrew Frank: But there is tension here. People who own the larger block of land in this Shire, in this Local Government Area does not – they do not want to compromise the value of their property by reducing the size of it. In other words, they love the size of the property. If you’re going to introduce smaller blocks, you’ve got all sorts of other issues of a community nature that you’ll have to deal with. The whole notion of living one stuck together – that’s something that would have to also be address, because it’s not just about ..., it’s not just about size of land – it’s about the community context. We’re talking about Fonzie pads of how many hundred...?
Kristen Tod: About 300, roughly.
Andrew Frank: 300. We’re now producing – we’re now going to the or introducing this whole notion of really close living, which is the reason why people came to this part of Sydney in the first place. So, you’ve got that tension. I’m not saying you shouldn’t have it. But it’s a huge – there’s going to be a lot of push back there.
David Inkster: I mean one thing that we’re really seeing with – we’re involved in the project marketing of a number of different sites around the Hills District – and the ones that are becoming particularly popular are the ones that are addressing that issue. Steve sort of just mentioned before the site that they’ve got opposite Cudgegong Road. That answers a lot of your questions. We’re talking about an entry price of circa $500,000 to get in. Now, when you get into that complex, you get over 5,000 square metres of space, including a tennis court, including a swimming pool and a community centre. So, you’re not just confining those people. You know. The developments that are working are those ones where the developer is not just putting a block there and saying, you know: That’s your space. They’re saying – well, you know, acknowledgement of break-out areas, acknowledgement that people have a need for connectivity, and they want to – you know – to have these areas where you can go down to the – it’s a 300-square metre community centre. You can have a barbecue. You’ll probably do your Owners Corporation meetings there.
Andrew Frank: The notion of affordability – is it the case that there’s more and more property being – or housing units being constructed which allow for part – 1 of the rooms to be rented easily? That’s the issue. Because if you’ve got a young couple who can buy a 400, 500 square metre block of land and put a house on it with a granny flat, suddenly the granny flat becomes an income stream which helps them to fund their purchase. Similarly, if they buy a unit and the unit has a structure that allows them room.
Steve Grant: So we’ve got 14 of those in 280 we’re just handing over at Cronulla now. So, it’s only 14 out of 280. But I do think – I do agree with you, Andrew, that is going to be more popular in the future. A lot of the people that buy from us buy with the intent they’ll live there in 3 or 4 or 5 years. So, they’ll lease them out for the time being.
Michael Edgar: I’ll just mention 2 things, just very briefly – one of them is that you must have a diversity of product. When I first started running around as a building surveyor at Blacktown Council in the 1980’s, properties were around about 600 square metres – a house and land package. The land was about half the build price.
Steve Grant: Correct.
Michael Edgar: Now, the land is double the build price. So, something’s gone wrong with the basic land economy. When land went from 600 square metres down to let’s say 450 there wasn’t a linear reduction in price. What’s really important is that there is a wide range of land sizes to keep price relativity. If all land is the same size, that will be market price but if there is choice, then you find it has a natural shock absorber to make sure the smaller blocks are worth less than the larger blocks. So, it’s very important that we just don’t focus on the low end particularly. You must have the larger blocks. And one of our success factors in this Shire is we have the housing and the education that attracts people to want to raise a family. That’s why we have 3.2 people per household – because it’s a great place to raise our families. So we must make sure we don’t let our housing stock decay to a point where that doesn’t encourage the business owner, managing director to come and live here and raise their family here, because that’s what’s going to fuel our economy. So, there’s not one single answer. It’s a combination of things. Some of the initiatives that you talked about, Andrew, are good.
Andrew Frank: There’s one other driver that I’ve personally experienced. And that is the location of the better schools. I live in Baulkham Hills, just near Matthew Pearce – not far from Matthew Pearce. In the last 7 years, the demographic of my street has changed dramatically – very happily so. But now, the Asian residents and the Indians – subcontinent residents – are very, very prominent because they’re prepared to – that’s where they’re going to buy.
Kristen Tod: We intend to pay an incentive based performance bonus quarterly. Yesterday, at our staff meeting I announced that the person who has the most nominations for Employee of the Month, which is from our client base – not internally – that I’ll take them on a trip with me to a convention next year in the US. So, it’s all of these little things that don’t cost a whole lot of money. And another thing: your child’s sick? OK. They’re not infectious; they’re not really sick. We have a room set up where you can bring your child to work. You can see the child and they play on their computer or whatever, and mum is right there. But it means that my staff members at work, being productive, and she loves it.
Anthony Moss: So, the message is the onus is on business to have to think innovatively about how we, you know, hire and manage staff.
Shahzad Khan: Anthony, like Richard Branson said: Train your staff so they can leave. But treat them so they don’t want to. So, that’s very important for retention, bringing in fresh talent once – you know, the bigger picture that we spoke about – once these things start to kick in, once the train is there, once the load is taken off the roads. Then people would, because – like the ruler of Dubai said: If you’re earning anything less than 10,000 Dirhams a month, don’t come to Dubai because you will struggle, which is about 3,000 to 4,000 Aussie dollars. Now, just touching on what you said earlier, this is a kind of an area unfortunately – maybe it changes over the next 15 years – but unfortunately if I’m earning 65 grand a year, I’m not going to own a house here. That’s just ... If you’re earning £50,000 a year, you don't get to live in Mayfair. You don't get to live around Hyde Park in London. That’s just the reality of it. But, once these things start taking effect, you will be able to bring talent from areas where they’re happy and cosy to live, and afford it, but are happy to travel because it doesn’t take them more than half an hour or an hour.
Michael Edgar: One of the interesting things in the Greater Sydney District Plan, there was a real narrative around rental affordability. There seems to be a shift from ownership to it’s going to be OK to rent.
Andrew Frank: But Mike, the problem with that though is that’s unattractive from the average punter because that’s their asset, that’s their investment, that’s their future – is the home. The whole tax regime has been set up on the basis of giving the average person a tax benefit – no CGT, etc, on your residence.
Michael Edgar: You’re right.
Anthony Moss: Kristen, I want to come back if I may to the points you raised about having a flexible approach to staff management too. Can I also ask: do you have a roster system that people can work around the traffic queues?
Kristen Tod: Absolutely. Very flexible. I think once a staff member creates trust, I trust them. I know that they can do their work more productively from home than in the office. They produce about 25% more work from home. There’s no interruptions. And it’s constant. But, no, I just want to add: you know the biggest thing that my staff love, and unfortunately, I don't have enough guys in the office. I’ve got about 7 men. The rest are women. But the thing they love most is everybody hates Christmas school holidays, with young children. You’ve got like 5 weeks. You need to find entertainment. You need to provide. It costs a lot of money. So, I provide an entertainment programme for the children for 3 of those weeks which costs the parents nothing and it costs me $22 an hour.
Anthony Moss: OK. So, the message is, business has got to be agile in how they deal with the workforce, distributed workforce – think about the teleworking and the working from home initiatives – and having a flexible approach to work practices. I want to move onto the third issue which is the big one that we talked about earlier. So, what are the 1, 2, 3 strategic initiatives that need to happen, even though we know we can’t necessarily afford them yet, but that we need to do.
Andrew Frank: We need an integrated plan – bus, pedestrian, train – a visible, transparent, integrated plan.
Anthony Moss: Just articulate that, Andrew. What do you mean?
Andrew Frank: Linking up on the corridors, taking people from the house to the train or from the community near the car park to the train. Buses to the community – to the trains.
Anthony Moss: So, integrated transport?
Andrew Frank: Absolutely. And it has to be transparent, because no-one believes this government at the moment. I do. And Steve does. But no-one else does – that that’s what’s happening – but it has to be integrated. We’ve got to resolve and, you know, obviously repair the sins of the past in terms of how our city is developed. And that’s painful, but it’s got to happen.
Michael Edgar: One of the things that has worked with our staff since coming to Norwest Business Park is being a little bit flexible with start and finish times. And we’ve got several staff that might not arrive till 10, but they’ll be there till 7:00. So, they’ve missed the peak – the morning and evening.
Shahzad Khan: Can I add to the integrated transport plan? When Boris Johnson was the Mayor of London, he started a Boris Bike which was sponsored by Barclays Bank. And there were bike stations all around Central London. You just get the bike. It’s all integrated. It reads your card or you can use your coin. And you cycle/pedal through wherever you want to get to and just leave it at the next one, and just don’t worry about bills or anything. And obviously bicycles – study bicycles – are a very long lasting piece of equipment that does last.
Michael Edgar: It’s important to sell that message. And we’ve got a very good planned cycle network in throughout the whole Hills. We’ll be able to cycle from one end to the other. But there’s missing links, and we’re working on it over time.
Anthony Moss: OK. So, building cycle ways and communicating that message. Jim?
Jim Taggart: And probably better improvements around home based businesses. And that’s not a point of – you know what I’m involved in. So, let me make that clear. It’s not. But I think the whole notion, structurally, is around Council and home based businesses and regulation. So, it’s not the Councils personally, Mike. It’s about just regulation and so on - people are working 2 and 3 days to really understand how that could become more friendly and different things.
Michael Edgar: There will be a road that extends Lexington down to the Balmoral end of Memorial. We’re going to have another link from – hopefully from Maitland Place into Spurway, behind Council. So, improving the permeability around here is going to assist. It’s not going to happen overnight. And that’s the reality. So, we’ve got to find other coping mechanisms in the meantime.
Nabil Chammas: One of the things that is happening in other industries is the use of social bonds and so on and getting buy-in from the private sector. Particularly now, banks/financial institutions are willing to inject capital into a project that’s viable and that gets a good return, because they’re finding that particularly when they work with government, it’s an easier sell to the public, to investors to actually invest in a program. I don't know whether there’s an opportunity to align government initiatives. It kind of talks to this whole concept of business now being more socially responsible and being more involved in the community.
Jim Taggart: And this is not community, but just to share with you the whole notion of social bonds: I don't know if David’s told you, but myself and other colleagues in other areas have gone to KPMG to talk about developing social bonds. So, I’m just saying to you: that’s where the thinking is about where things are going.
Anthony Moss: OK, ladies and gentlemen. We are 15 minutes over time. But I think we were having an excellent discussion here. If we can, Steve, perhaps as our sponsor as Esplanade, Norwest Lake, you have some concluding remarks.
Steve Grant: I just think it’s exciting times. It’s funny from where I sit because we’ve got it in our DNA to identify opportunities and we take those risks to move ahead. But the financing model has changed dramatically. The market has shifted quickly. As far as business and taking advantage of it, you know, you’ve got to really act very quickly. We must be agile, alert for change. Change sometimes doesn’t happen quickly, other times it’s instant. Like, when we talked about the car parking at Sydney Olympic Park in that discussion we just had, the best way to do it is to have a plan that works and work through that to get the best result. It won’t happen overnight. But what does happen overnight is the opportunity. And you move on that quickly, and you’re j set for it. And we put a lot of work into knowing where the market is today. We try and concentrate on that, make sure that what we’re doing is not out of step. I had so many people at Norwest that couldn’t afford to move here, and we’d walk down to Toongabbie and all those different parts of industrial areas across Sydney trying to convince them to come here to Norwest. But I just sort of smile to myself now. If I go for coffee and those guys will come up that ought off me 17 years ago and say: Thank goodness you talked me into it. These days people would always ask me: Where’s the next Norwest, where should we invest? Well, the next Norwest is at Norwest. That’s where it is. This is the opportunity. It’s a great situation. And when I say that, this is just the hub that provides all those things out there – whether it’s Cudgegong Road that we’re gradually doing out there, or other things around towards West Pennant Hills where you’re building nice homes or whatever development is, everyone does well out of it. And it’s just something that will flow through right across the board.
Anthony Moss: So, Steve, thanks again for hosting today here at Esplanade, Norwest Lake. Thank you to Michael Walls, CEO of Access News Australia for organising today. And a special thanks to everyone around this table for your willingness to contribute, and bringing your brains to the table and your ideas. I’m now going to ask you and challenge you to take those ideas forward and be part of the charge of implementing these initiatives. We’re happy to engage you through the Chamber. We are driving initiatives through the PSI. We are going to have another couple of focus groups, particularly around infrastructure and compliance. And we’d love to engage you in that process. We have a Chairman’s lunch in April of next year the theme of which will be crafting the vision for the hills. So, that’s an invitation to the rest of the group to participate
