Municipal Comprehensive Review of Commercial & Employment Lands February 3, 2015
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TABLE OF CONTENTS Introduction... 1 PART A/COMMERCIAL LANDS... 3 Commercial Land Needs... 3 Market Overview... 4 Land Supply... 18 Land Needs Projection... 21 Supply Versus Demand Conclusions... 25 Commercial Policy Review... 28 The Evolution of Community Planning & Commercial Development... 28 Provincial Policy Framework... 28 Local Policy Context... 29 Commercial Policy Conclusions... 32 PART B/ EMPLOYMENT LANDS... 36 Employment Land Needs... 36 Importance of the Industrial/Employment Areas... 37 Market Overview... 38 Land Needs Projection... 46 Supply Versus Demand Conclusions... 56
Employment Land Policy Review... 59 The Planning Context... 59 Provincial Policy & Legislative Framework... 60 Local Policy Context... 62 Provincial Directives for Employment Lands... 62 Policy Approaches from Other Jurisdictions... 69 Conclusions... 73 Appendices Appendix A. Vacant Commercial Land Appendix B. Existing Commercial Policy Framework Appendix C. Employment Area Inventory Appendix D. Employment Land Policy Example Matrix Appendix E. Industrial Land Use Conversions
Part A/ Commercial Lands List of Tables Table 1. Shopping Centre Inventory Table 2. Other Prominent Retail-Commercial Sites Table 3. Shopping Centre Space Per Capita Comparison Table 4. Shopping Centre Site Coverage in Brantford Table 5. Average Big Box Square Footage Table 6. Vacant Land Sites Table 7. Vacant Building Sites Table 8. Population Forecast Table 9. Land Demand Projection Scenario 1 (Base Case) Table 10. Land Demand Projection Scenario 2 (Reduced Space per Capita) Table 11. Land Demand Projection Scenario 3 (Reduced Space per Capita at a Higher Density) Table 12. Commercial Land Supply and Demand Analysis Overview List of Figures Figure 1. Shopping Centre Space Per Capita Across Southern Ontario Figure 2. Select Retailers by Store Location (Freestanding, Mall, Power Centres) Figure 3. Power Centre Inventory and Vacancy Across Canada Figure 4. Vacancy by Retail Format in the Greater Toronto Area (not including Brantford) Figure 5. E-Commerce Orders in Canada, 2010 & 2012 Figure 6. Retail-Commercial Building Permits, Number of Projects Figure 7. Retail-Commercial Building Permits, Construction Value Figure 8. Retail-Commercial Building Permits, New Supply Figure 9. Retail-Commercial Building Permits by Type of Project Figure 10. New Retail-Commercial Building Permits, Number of Projects Figure 11. Retail-Commercial Building Permits, New Supply by Category Figure 12. Retail Building Transactions, Sales Volume and Number of Transactions Figure 13. Retail Building Transactions, Building Size and Price Per Square Foot Figure 14. Composition of New Retail Development Figure 15. Population Growth by Five-Year Census Period, 2001 to 2041
Part B/ Employment Lands List of Tables Table 13. Vacant Employment Land Northwest Industrial Area Table 14. Vacant Employment Land Braneida Industrial Area - SOUTH of 403 Table 15. Vacant Employment Land Braneida Industrial Area - NORTH of 403 Table 16. Vacant Employment Land Total City Table 17. Vacant Employment Land Servicing Table 18. Employment Forecast Table 19. Recent Manufacturing Building Construction Activity Table 20. Land Demand Projection Scenario 1 (Base Case) Table 21. Land Demand Projection Scenario 2 (Lower Density Growth) Table 22. Supply Versus Demand Conclusions Table 23. Employment Forecast and Land Supply/Demand Base Case Scenario Table 24. Employment Forecast and Land Supply/Demand Lower Density Growth Scenario List of Figures Figure 16. Industrial Rental Rates Figure 17. Industrial Vacancies Figure 18. Building Permits Number of Projects Figure 19. Building Permits Construction Value Figure 20. Building Permits New Supply Figure 21. Manufacturing Building Permits Project Type Figure 22. Non-Manufacturing Building Permits Project Type Figure 23. Industrial Building Transactions ($) Figure 24. Industrial Building Transactions (sf) Figure 25. Serviced Industrial Land Sales Figure 26. Employment by Industry (Brantford Census Metropolitan Area) Figure 27. Industrial Building Employment Density (Brantford) Figure 28. Industrial Building Employment Density (Mississauga) Figure 29. Site Coverage for New Manufacturing Buildings in Brantford
Introduction
Introduction Brantford s Official Plan Review In April 2013, the City of Brantford started the five-year review of its Official Plan with the goal of creating a new Plan that will provide policy direction to guide the growth of the City over the next twenty-five years. The current Official Plan was initially prepared in 1987 and has subsequently been the subject of 170 amendments over the last twentysix years. As such, City Council has determined that it is time to consider creating a new Plan that both captures the priorities of the community for the future of our City and fulfills its obligation to respond to current Provincial legislation. The Official Plan Review, including the Municipal Comprehensive Review documented in this report, is guided by a Vision and Principles that were identified in consultation with the Brantford Community in the Fall of 2013. The Municipal Comprehensive Review of Employment & Commercial Lands As part of the Official Plan Review, The Planning Partnership and Cushman & Wakefield were retained by the City of Brantford to complete a Municipal Comprehensive Review of Commercial and Employment Lands. The Municipal Comprehensive Review and lack of appeal rights are tools provided by the Province to empower municipalities to manage their own long-term employment destiny and protect their employment land supply. The purpose of this review is to conduct a land supply and demand analysis, and to develop land use planning strategies for meeting the City s long-term employment and commercial land needs to the year 2041, within the context of local and provincial planning objectives and requirements. Recommendations in this report are based on a fulsome analysis of City s existing land supply and future demand, balanced with the community s objectives to create a livable, complete community and thriving local economy that is diverse and adaptable. Report Outline The Municipal Comprehensive Review report is divided in two parts: A the commercial land review, and B the employment land review. Parts A and B each provide a market overview, land needs projection, and policy review for commercial and employment lands respectively. In recognition of the interconnected nature of commercial and employment land supply and demand, key directions for both are provided under shared conclusions that reflect a balanced approach to protecting employment lands while meeting the needs of various types of retail formats. Core recommendations are made regarding employment land conversions. It should be noted that several properties identified for conversion are not necessarily a true conversion since retail/commercial uses are already permitted and exist based on a historic mixed commercial/industrial designation in the current Official Plan. The intention is to ensure the new policy regime, and associated mapping, in the updated Official Plan reflects the on-the-ground reality. Brantford OPR Municipal Comprehensive Review 1
Part A/ Commercial Lands Brantford OPR Municipal Comprehensive Review 2
Part A/Commercial Lands Executive Summary The findings of the commercial land supply and demand analysis are documented in Part A of this report, which identifies the future retail-commercial space demand in Brantford (in square feet/metres per person) and the associated land needs (in acres/hectares), accounting for the vacant commercial land supply and major expansion/infill opportunities. According to the land supply and demand analysis, there is likely not a suitable amount of lands nor variety of locations to meet the requirements of retailers within the City. Brantford currently has a supply of vacant retailcommercial lands, buildings and potential expansion opportunities that total 119.7 acres (48.4 hectares). To determine future land needs, three land scenarios were developed to determine future demand for commercial land to the year 2041. The base case scenario reflects existing conditions; a second scenario anticipates reduced shopping centre space per capita based on a number of trends including e-commerce; and a third scenario anticipates reduced shopping centre space per capita and greater site coverage (higher density) of future retail development. The land demand scenarios identify a requirement for between 60-160 acres (25-64 hectares) of retailcommercial lands to accommodate the future shopping centre development demand. Even at a higher site coverage than is seen in the existing retail environment (i.e. 40% versus 25%), and assuming that retail space per capita will decline in the future compared to present, it will be a challenge to utilize all of the land supply identified. In some cases, existing vacant parcel sizes are small, and so can only accommodate modest development. As well, their location may not be optimal from a market demand perspective. Relying upon the re-use or redevelopment of vacant building sites is also a challenge as is relying on expansion potential at existing larger retail sites to accommodate a component of future growth. Notwithstanding these challenges, it is in the City s interest to encourage intensification through Official Plan policies as part of a balanced approach to growth management that responds to the provincial planning framework, and supports the ongoing vitality of existing communities. As such, key policy directions for the new Official Plan include integrating commercial policies with the existing growth management/intensification framework, addressing compact and mixed use development opportunities, and transitioning towards more people-friendly retail planning and design. Recommendations are also made for simplifying the hierarchy of commercial designations. Brantford OPR Municipal Comprehensive Review 3
Commercial Land Needs Market Overview This section of the report presents an overview of the current shopping centre inventory in Brantford, which allows an analysis of the amount of retail space per capita. This chapter also examines the site coverage of retail-commercial properties. Recent trends in the retail sector are explored in order to assess their potential impact on retail space demand during the forecast period. Building permit activity is analyzed in order to understand the types of recent development that has taken place in the local market. Finally, an assessment of the supply of vacant land and vacant building sites, along with the expansion potential at certain properties, provides an understanding of the retailcommercial land supply context in Brantford. Our approach focuses on an assessment of the retail inventory primarily in shopping centres, larger freestanding properties, as well as smaller plazas. The Downtown streetfront retail environment remains an important component of the local retail mix. However, it is anticipated that future retail demand will be focused on sites outside of the Downtown area although infilling and mixed-use developments can also play a role. As well, the shopping centre supply is more readily available as an inventory, and can be compared to other markets through third-party data sets unlike the smaller retail properties and streetfront locations. Shopping Centre Inventory The Canadian Directory of Shopping Centres provides information on shopping centres and mixed-use centres with at least 25,000 sf (2,320 M 2 ) of gross leasable area, and three or more commercial retail units. As a result, freestanding retail properties are not tracked. Cushman & Wakefield has supplemented this data with additional market intelligence. There are 13 shopping centres identified in Brantford, comprising a total area of almost 1.9 million sf (174,200 M 2 ) (Table 1). There are a range of formats and shopping centre sizes to meet the retailcommercial needs of Brantford s residents. In addition to the larger shopping centres identified above, there are other smaller centres, along with freestanding retail stores, that contribute to the retail-commercial mix in the city (Table 2). Brantford OPR Municipal Comprehensive Review 4
TABLE 1. SHOPPING CENTRE INVENTORY CENTRE NAME TYPE YEAR OPENED GLA (SF) GLA (M 2 ) TOTAL STORES MAJOR RETAILERS Lynden Park Mall Community 1974 376,000 34,900 77 Sears, Food Basics, Winners, Sport Chek Brantford Commons Community 1962 328,000 30,500 30 Walmart, Zehrs Brant Retail Development Power Centre 2008 274,000 25,500 Lowe's (Note 1), Michaels, PetSmart Fairview Crossing Power Centre - 202,000 18,800 13 The Brick, Toys 'R' Us; Zehrs, Dollarama Brantford Commons Plaza Grocery-Anchored 2008 114,000 10,600 19 FreshCo Colborne Commons Grocery-Anchored 2006 95,400 8,700 19 Sobey s, Shoppers Drug Mart Northridge Plaza Grocery-Anchored 1983 93,000 8,600 25 Food Basics The Shops on Henry Power Centre - 79,000 7,350 10 Leon s Brantford Mall Neighbourhood 1990 73,000 6,800 14 King s Buffet Colborne Place Grocery-Anchored 1990 70,000 6,500 11 Zehrs King George Square Neighbourhood 1988 67,000 6,200 16 Shoppers Drug Mart, Dollarama North Park Shopping Centre Neighbourhood 1980 59,000 5,500 17 Shoppers Drug Mart Wyndham Place Neighbourhood 1973 45,000 4,200 6 PartSource Total (13 Properties) 1,875,000 174,200 257 Note 1: Lowe s is an adjacent property, and is considered a shadow anchor for this shopping centre Source: Canadian Directory of Shopping Centres TABLE 2. OTHER PROMINENT RETAIL-COMMERCIAL SITES CENTRE NAME TYPE YEAR OPENED GLA (SF) GLA (M 2 ) TOTAL STORES Home Depot Big Box - 119,200 11,100 Home Depot Canadian Tire Big Box - 117,600 10,900 Canadian Tire MAJOR RETAILERS Staples Plaza Community - 96,000 8,900 Staples, Athletic Club, M&M Meats Mohawk Plaza Neighbourhood - 63,000 5,900 61 Lynden Road Community - 48,500 4,500 Future Shop, The Keg, Moore s Canada Trust Square Community - 34,900 3,200 Dunsdon Plaza Neighbourhood - 34,300 3,200 84 King George Road Community - 32,600 3,000 Giant Tiger, Dollarama Metro (St. Paul Avenue) Grocery-Anchored - 30,200 2,800 Metro Home Hardware Plaza Community - 29,000 2,700 Home Hardware Brantwood Park Plaza Neighbourhood - 25,400 2,500 Total (11 Properties) 630,700 58,700 Source: City of Brantford and Cushman & Wakefield Brantford OPR Municipal Comprehensive Review 5
Shopping Centre Space Per Capita According to the 2011 Census, the City of Brantford had a population of 93,650. This population figure translates to approximately 20.0 sf (1.9 M 2 ) of shopping centre space per capita based upon shopping centres identified in the Shopping Centre Directory. The following presents a comparison of the City of Brantford to other Southern Ontario urban centres, utilizing the 2011 Census and the Canadian Directory of Shopping Centres to derive a figure for shopping centre space per capita. The exhibit is organized in descending shopping centre inventory, by size. The average shopping centre space per capita for these 16 Southern Ontario markets is 21.8 sf (2.0 M 2 ) (Table 3). The majority (11 out of 16) of these communities range between 19 and 26 sf per capita (1.8 and 2.4 M 2 per capita). In conclusion, the Brantford market is slightly below the average for these Southern Ontario communities. The preceding examines only shopping centres identified in the Shopping Centre Directory. Across Brantford, there is an additional 630,000 sf (58,700 M 2 ) of retail-commercial space excluding small retail sites, as well as the Downtown streetfronts. This contributes an additional 6.7 sf (0.6 M 2 ) per capita. Therefore, the total retailcommercial space across the City of Brantford is 26.8 sf (2.5 M 2 ) per capita. Table 3 and Figure 1 below illustrate the shopping centre space per capita, based upon the inventory identified in the Shopping Centre Directory. TABLE 3. SHOPPING CENTRE SPACE PER CAPITA COMPARISON COMMUNITY SHOPPING CENTRE INVENTORY (SF) SHOPPING CENTRE INVENTORY (M 2 ) # OFSHOPPING CENTRES 2011 CENSUS POPULATION SF PER CAPITA M 2 PER CAPITA London 8,527,000 792,200 59 366,150 23.3 2.2 Hamilton 8,256,000 767,000 50 519,950 15.9 1.5 Burlington 5,145,000 478,000 36 175,780 29.3 2.7 Kitchener 4,595,000 426,900 34 219,150 21.0 1.9 Windsor 4,508,000 418,800 30 210,890 21.4 2.0 Oakville 4,423,000 410,900 25 182,520 24.2 2.3 St. Catharines 3,832,000 356,000 21 131,400 29.2 2.7 Cambridge 2,896,000 269,000 19 126,750 22.8 2.1 Guelph 2,324,000 215,900 17 121,690 19.1 1.8 Waterloo 2,196,000 204,000 15 98,780 22.2 2.1 Niagara Falls 1,960,000 182,100 11 83,000 23.6 2.2 Brantford 1,875,000 174,000 13 93,650 20.0 1.9 Sarnia 1,845,000 171,400 11 72,370 25.5 2.4 Milton 1,427,000 132,600 8 84,360 16.9 1.6 Welland 1,306,000 121,300 7 50,630 25.8 2.4 Chatham 860,000 79,900 5 103,670 8.3 0.8 Average 21.8 2.0 Source: Canadian Directory of Shopping Centres and Statistics Canada Brantford OPR Municipal Comprehensive Review 6
Shopping Centre Space per Capita (sf) SHOPPING CENTRE SPACE PER CAPITA 35 30 25 20 15 10 5 0 Data: Population (2011 Census), Shopping Centre Inventory (2014) Source: Canadian Directory of Shopping Centres, Census of Canada and Cushman & Wakefield Figure 1. Shopping Centre Space Per Capita Across Southern Ontario Shopping Centre Site Coverage Existing Conditions We have analyzed the site coverage of the existing shopping centres. The building data was drawn from the Canadian Directory of Shopping Centres, and supplemented with our own local research. The land area data was obtained from GeoWarehouse. GeoWarehouse is a product offered by Teranet; Teranet built and manages Ontario's Electronic Land Registration System. While the 13 shopping centres in Brantford include a range of formats (power centre, community shopping centre, grocery-anchored), they fall within a fairly narrow range of site coverage percentage, from the low to upper 20s (Table 4). There is one notable exception Lynden Park Mall is an enclosed shopping centre with a site coverage of just 14%. The site area for the Brant Retail Development could not be identified. While the average site coverage figure for these sites is 23% (due in part to Lynden Park Mall), the average figure of 25% site coverage will be used in our land demand modeling, as it is a benchmark site coverage for retail developments. Future Conditions The benchmark site coverage figure of 25% is consistent with existing market conditions. However, future commercial development will be expected to achieve a more compact built form that reflects more contemporary preferences and attitudes, as well as intensification and urban design objectives under the Provincial and local planning frameworks. Within this context, an alternative site coverage figure of 40% has been identified as a reasonable target for more compact commercial and mixed use development in Brantford. This figure is based on The Planning Partnership s extensive experience planning and designing commercial sites across Southern Ontario, and particularly within the Places to Grow planning area. Achieving this level of site coverage is expected to require reduced parking standards, setbacks and landscaping as compared to the status quo. In our later land demand modelling, 40% is used as an alternative site coverage target for more compact retail development. Brantford OPR Municipal Comprehensive Review 7
TABLE 4. SHOPPING CENTRE SITE COVERAGE IN BRANTFORD CENTRE NAME BUILDING GLA (SF) BUILDING GLA (M 2 ) LAND AREA (ACRES) LAND AREA (HECTARES) SITE COVERAGE Lynden Park Mall 376,000 34,900 62.0 25.1 14% Brantford Commons 328,000 30,500 37.2 15.1 20% Brant Retail Development 274,000 25,500 N/A N/A N/A The Shops on Henry (Note 1) 225,000 20,900 21.9 8.9 24% Fairview Crossing 202,000 18,800 16.3 6.6 28% Brantford Commons Plaza 114,000 10,600 10.5 4.2 25% Colborne Commons 95,400 8,900 10.4 4.2 21% Northridge Plaza 93,000 8,600 9.3 3.8 23% Brantford Mall 73,000 6,800 7.6 3.1 22% Colborne Place 70,000 6,500 6.7 2.7 24% King George Square 67,000 6,200 5.8 2.3 27% North Park Shopping Centre 59,000 5,500 4.8 2.0 28% Wyndham Place 45,000 4,200 4.1 1.7 25% Total (13 Centres) 1,926,000 179,000 196.6 79.7 23% (avg.) Note 1: This building GLA and land area includes the portion of the site that was originally planned to accommodate the Real Canadian Superstore (measuring 145,000 sf 13,500 M 2 ). Source: Canadian Directory of Shopping Centres Retail Trends Retail Formats The retail sector is a constantly evolving business, with changing store formats, shopping centre formats, anchor tenant brands, and consumer behaviours. The recent announcement by Target that it is closing all of its Canadian stores; the continued expansion of Walmart; Sears exiting its leases at several key sites, and the entry of new U.S. department stores; the uncertain future of electronics retailing (Best Buy/Future Shop restructuring); the closure of Blockbuster Video locations; ongoing consolidations in the grocery segment (Sobey s acquiring Canada Safeway; Loblaw acquiring Shoppers Drug Mart); Leon s acquisition of The Brick these are a few of the significant changes seen across Canada s retail landscape in just the past few years. The following presents some of the key broad retail sector trends that are considered in our evaluation of the retail-commercial marketplace in Brantford today, and in the future. Big box retailing the dominant form of new development big box stores serve as a relatively low cost form of retail development, addressing a suburban style of design. This allows retailers to accrue economies of scale in their operations and meet consumer s demand for low prices and wider product selection. Power centre developments anchored by several big box retailers are also home to ancillary services (restaurants, personal services, business services, and smaller retail stores). According to the Centre for the Study of Commercial Activity (CSCA), from 2008 to 2012, there was 22.5 million sf (2.1 million M 2 ) of new power centre development in Canada, representing a growth rate of 15.3%. During this same time, the population of Canada increased by 4.7%. Overall, the rate of power centre growth has slowed considerably, reflecting the mature stage of power retail consolidation. Brantford OPR Municipal Comprehensive Review 8
The CSCA has identified that for 29 select major retailers, power centre locations account for 62% of their locations, which is three times the number compared to mall locations (19%) and freestanding locations (18%). SELECT RETAILERS BY STORE LOCATION (2012) Distribution of Store Locations 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Canadian Tire Mark's Work Wearhouse Walmart Reitmans Business Depot Winners Home Depot The Brick Future Shop Penningtons Moores BouClair Real Canadian Superstore Michael's HomeSense Costco PetSmart Best Buy Loblaws Toys 'R Us The Shoe Company Zellers * Pier 1 Imports Chapters Home Outfitters Old Navy Sears Whole Home Indigo Books & Music Ikea Freestanding Mall Power Centre * Note: Data pre-dates Target acquisition of Zellers leases. Figure 2. Select Retailers by Store Location (Freestanding, Mall, Power Centres) Source: Centre for the Study of Commercial Activity Changing composition of big box retail mix The Centre for the Study of Commercial Activity has identified that there has been a clear movement on the part of fashion retailers (including sporting and household fashion) to develop big box formats. Power centres a decade ago were anchored by supermarket, general merchandise, hardware and electronics retailers; more recent developments are influenced by fashion retail, sporting goods stores, pharmacy and ancillary services (including financial institutions, restaurants and entertainment). Smaller store formats Recent media reports have noted a number of big box retailers are exploring smaller sized box stores, due to concerns over productivity, and under-utilized square footage. Also, smaller format stores are more compatible in urban environments when seeking infill sites, as prime sites are not as readily available (or in the case of higher land costs affordable). Brantford OPR Municipal Comprehensive Review 9
Power Centre Inventory (Millions sf) Vacancy Rate TABLE 5. AVERAGE BIG BOX SQUARE FOOTAGE LOCATION TYPE 2003 2012 CHANGE % CHANGE Freestanding 50,810 53,030 2,220 4.4% Located in a Mall 29,480 27,450-2,030-6.9% Located in a Power Centre 36,630 36,200-430 -1.2% Located in a Power Node* 35,140 35,730 590 1.7% All Big Boxes 35,530 35,060-470 -1.3% * A Power Node is a Power Centre site with other nearby big box stores, or other Power Centre(s) within a 1 kilometre radius typically at a major intersection location. Source: Centre for the Study of Commercial Activity 200 180 POWER CENTRE INVENTORY AND VACANCY CANADA Inventory Vacancy Rate 5.0% 4.0% 160 3.0% 140 2.0% 120 1.0% 100 2008 2009 2010 2011 2012 * Note: The 2012 vacancy rate is adjusted to account for the transition of Zellers location to Target stores. 0.0% Figure 3. Power Centre Inventory and Vacancy Across Canada Source: Centre for the Study of Commercial Activity Unknown future of power centre developments Power centres are maligned by some as a sprawling form of unsustainable development a sea of car parking surrounding buildings disconnected from the surrounding built landscape. Across Canada, the first wave of power centres will soon be 20-25 years old. The potential for tired centres may increase. Some land use commentators refer to power centres as a temporary form of development; the build quality (lifespan), their functional form (automobile-oriented) and low density are key criticisms. As these power centres age and consumer habits evolve, will they continue to represent the highest and best use of their lands? In Canada in contrast to the U.S. much of the power centre development has been undertaken by a relatively small number of major retail real estate companies, with long-standing relationships with key tenants. There has been much less speculative development in Canada compared to some U.S. markets. This relative conservatism in recent retail new development should insulate Canadian communities from the over-developed, and in some cases declining state of retail in select U.S. cities. Brantford OPR Municipal Comprehensive Review 10
Vacancy Rate Retail Vacancy There has been an increase in vacancy across most retail formats during the past few years, as identified by the CSCA s survey of the Greater Toronto Area market (Brantford is not part of this survey) (Figure 4). In part, the higher vacancy levels in power centres is due to new developments that have not been fully leased to a stabilized level. Super regional shopping centres are well managed by institutional owners who have a great deal of influence over the tenant mix, in that there is an excess of retail brands seeking space at these highly successful centres. It is probable that regional centres have suffered due to ongoing competition from power centres. Notably, the late-2008- to early-2009 recession does not represent the peak of vacancy for any store format, other than strip centres. With vacancy levels remaining elevated compared to conditions seen in 2007, this likely will contribute to a slowdown in new retail development for the near term across the Greater Toronto Area market as a whole (although micro-market conditions will dictate development plans at a local level). Note that this data is reported as the count of store vacancies, not the square footage (square metres) of overall retail vacant space. VACANCY BY RETAIL FORMAT GREATER TORONTO AREA 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 2007 2009 2012 Power Centre Super Regional Regional Community Neighbourhood Strip Source: Centre for the Study of Commercial Activity Figure 4. Vacancy by Retail Format in the Greater Toronto Area (not including Brantford) E-Commerce The ability to research and purchase items using our computers and mobile devices has changed the way we shop. Internet Retailer.com expects U.S. online sales to increase 13% in 2013, on a year-over-year basis. According to research firm Peerless Research Group (PRG), nearly half of the retailers responding to a recent survey expect mobile commerce ( m-commerce ) to become the most vital sales channel in the next 24 months. A Statistics Canada survey of internet use related to e-commerce orders indicates that across a range of goods, the percentage of those surveyed who have purchased online has increased on average by 2.5% from 2010 to 2012 (Figure 5). Brantford OPR Municipal Comprehensive Review 11
CANADIAN INTERNET USE SURVEY E-COMMERCE ORDERS Percent of Respondents 0% 10% 20% 30% 40% 50% 60% 70% Software Music Books, magazines, online newspapers Videos or DVDs Memberships or registration fees Gift certificates or gift cards Tickets for entertainment events Computer hardware Food or beverages Prescription drugs or products Other health or beauty products Clothing, jewellery or accessories Housewares Consumer electronics Travel arrangements Sports equipment Toys and games Home improvement or gardening supplies Photographic services Other goods or services Figure 5. E-Commerce Orders in Canada, 2010 & 2012 2010 2012 Source: Statistics Canada The following trends are related to changing online shopping behaviour, which will impact demand for bricks and mortar retail space in the future: Increase in Online Sales Deloitte projects that by 2030, e-commerce will comprise 30% of all retail sales, meaning that in roughly 15 years, e-commerce sales will grow by a factor of five. This is attributable to the popularity of smartphones and tablets. Shopping with Mobile Devices ( M-Commerce ) Consumers have embraced online shopping, and savvy retailers are pursuing new ways of engaging with mobile shoppers, such as applications (apps) that track consumer locations in proximity to their stores within a shopping centre (using the GPS functionality of the mobile device) and offer targeted promotions even based upon previous buying experiences. Showrooming Online-focused retailers may open small store locations in shopping centres to showcase various products and allow consumers to experience the merchandise see it first hand, try it on but ultimately place an order electronically. The shopper does not leave with the merchandise it is shipped directly to their home. In this e-commerce era, people are conditioned to receiving product through the mail/by courier. Conclusion on Trends Overall, these trends point to changing consumer behaviours that will likely translate into a reduced amount of shopping centre space per capita in the future. Online shopping has emerged as a necessary sales channel for many retailers one that is gaining increased attention and investment. While shopping will remain an experience, e-commerce is ultimately about convenience. Brantford OPR Municipal Comprehensive Review 12
# of Projects Retail-Commercial Building Permit Activity The City of Brantford provided historic non-manufacturing building permit data from January, 2003 through December, 2013 (Figure 6). The building permits included new construction, building additions and alterations, and other building and site work. In terms of the count of projects, retail-type uses have been the most prominent form of building activity during the past three years, and have accounted for 57% of all permits this past decade. Commercial-type uses have represented 37% of the building permit issuances since 2004, but have declined in overall activity since the recent peak in 2009. RETAIL-COMMERCIAL BUILDING PERMITS NUMBER OF PROJECTS 40 35 30 25 20 15 10 5 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Retail Commercial Other Source: City of Brantford Figure 6. Retail-Commercial Building Permits, Number of Projects The value of commercial building permits peaked in 2009 at almost $37 million (Figure 7). This represented the most active year by a factor of 3.5 times the next highest year. Apart from this peak year, commercial building permit had tracked at a fairly stable rate, averaging 7.8 million sf annually from 2004-2010. However, the value of permits declined sharply from 2010-2013 to around $2.2 million annually. Retail building permits have more closely followed the recent economic cycle, with rising activity through the mid 200s followed by a decline that coincides with the recession of late-2008-early-2009. Retail activity has since resumed, with annual growth in each of the past three years. Brantford OPR Municipal Comprehensive Review 13
Size (sf) $ Millions RETAIL-COMMERCIAL BUILDING PERMITS CONSTRUCTION VALUE $40 $35 $30 $25 $20 $15 $10 $5 $0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Retail Commercial Other Source: City of Brantford Figure 7. Retail-Commercial Building Permits, Construction Value Figure 8 below illustrates the historic new supply of retail, commercial and other non-manufacturing-type buildings in Brantford. Understandably, the trend in construction value illustrated above closely translates to new retailcommercial space. The notable exception to this general trend is the significant commercial construction value in 2009 that is associated with a 13,800 sf (1,285 M 2 ) addition at the Brantford Charity Casino. RETAIL-COMMERCIAL BUILDING PERMITS NEW SUPPLY 250,000 200,000 150,000 100,000 50,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Retail Commercial Other Source: City of Brantford Figure 8. Retail-Commercial Building Permits, New Supply Brantford OPR Municipal Comprehensive Review 14
In examining the types of permits, alterations to existing buildings have accounted for two-thirds of all retailcommercial-type building activity this past decade (Figure 9). New construction has represented 22% of all permits, by count of permit, with building additions accounting for a 5% share. New buildings are important, as they contribute to absorption of retail-commercial lands, and mean that there is an increase in jobs unless the project represents the relocation of an existing business from elsewhere in the community. Building additions are notable, in that they reflect further demand for retail-commercial floor space, and ongoing capital investment in the building stock. Alterations, which account for the most sizable share of permit activity, do not necessarily indicate additional demand for retail products and commercial services, nor additional employment at a business. However, RETAIL-COMMERCAIL they do reflect reinvestment BUILDING in the PERMITS existing building stock in the community. TYPE OF PROJECT Other 5% New 22% Addition 7% Alteration 66% Count of Projects Source: City of Brantford Figure 9. Retail-Commercial Building Permits by Type of Project We have completed a more detailed analysis of the types of uses among two broad categorizations of functions retail-type uses and commercial-type uses, using building permit data from 2004-2013. Other uses could not be classified, or were unreported in the City s building permit data. Figures 10 and 1 below profile the mix of retail, commercial and other types of uses, as identified in new building permits since 2004. This past decade, retail stores account for the largest component of permits by number of new permits issued (25) and total area (approximately 450,000 sf, or 42,000 M 2 ). Restaurants fast food and full service together accounted for 65,000 sf (6,000 M 2 ) of new construction activity; fast food locations outnumbered full service locations by a factor of 16 to 6. Retail-type uses accounted for roughly two-thirds of all new retail-commercial-type construction, by floor area (including unidentified uses). In terms of commercial-type uses, general office, automotive-related functions and financial services uses accounted for 23 of the 39 total commercial-type new construction permits (59% share), and over 205,000 sf (19,050 M 2 ) of new space (53% share). Commercial-type uses accounted for 30% of the new retail-commercial-type construction this past decade, by floor area (including unidentified uses). Brantford OPR Municipal Comprehensive Review 15
NEW RETAIL-COMMERCIAL BUILDING PERMITS NUMBER OF PROJECTS Count of Permits Retail Store Fast Food Restaurant Full Service Restaurant Shopping Centre Pharmacy Other Retail Grocery Store General Office Automotive Financial Medical Other Commercial Entertainment Hotel/Motel Parking Personal Services Veterinary Clinic Mixed-Use Unidentified 0 5 10 15 20 25 30 Retail-Type Uses Commercial-Type Uses Other Uses Source: City of Brantford Figure 10. New Retail-Commercial Building Permits, Number of Projects by Category RETAIL-COMMERCIAL BUILDING PERMITS NEW SUPPLY Size (sf) Retail Store Fast Food Restaurant Full Service Restaurant Shopping Centre Pharmacy Other Retail Grocery Store General Office Automotive Financial Medical Other Commercial Entertainment Hotel/Motel Parking Personal Services Veterinary Clinic Mixed-Use Unidentified 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 Retail-Type Uses Commercial-Type Uses Other Uses * Note: No size (sf) was provided for the Grocery Store permit. Source: City of Brantford Figure 11. Retail-Commercial Building Permits, New Supply by Category Brantford OPR Municipal Comprehensive Review 16
Sales Volume ($ Millions) Count of Transactions Transaction Activity for Retail Buildings We reviewed historic retail building sales in Brantford from 2003 through 2013. Excluded from the analysis were transactions between related parties, power of sale, and other types of sales that may be considered as non-market deals, from a valuation perspective. A total of 24 market sale transactions were identified, with an aggregate value of almost $140 million, for which the building size could be identified (Figure 12). 2012 was by far the peak year in investment volume, with four significant transactions one of which represented 12 buildings and 331,000 sf (30,750 M 2 ) of space (Brantford Commons Plaza sold by First Capital to Bentall Kennedy for $76 million). RETAIL BUILDING TRANSACTIONS $60 18 $50 15 $40 12 $30 9 $20 6 $10 3 $0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 0 Sales Volume # of Transactions * Note: No transactions with a known building area were completed in 2008 or 2013. Source: RealTrack.com and Cushman & Wakefield Figure 12. Retail Building Transactions, Sales Volume and Number of Transactions When examining average pricing, the relatively small sample size presents some limitations. However, it appears that the average sale price for retail properties had moved upwards this past decade from a level of around $100 to $150 psf ($1,075 to $1,615 per M 2 ) from 2004-2006 to a range of $150 to $250 psf ($1,615 to $2,690 per M 2 ) by 2010-2012 (Figure 13). Brantford OPR Municipal Comprehensive Review 17
Building Size (sf) Price ($psf) RETAIL BUILDING TRANSACTIONS 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 $250 $200 $150 $100 $50 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 $0 Building Size (sf) Price ($psf) * Note: No transactions with a known building area were completed in 2008 or 2013; at just $29 psf, the single building transaction in 2007 is not representative of market pricing. Source: RealTrack.com and Cushman & Wakefield Figure 13. Retail Building Transactions, Building Size and Price Per Square Foot Land Supply Vacant Retail-Commercial Land and Buildings The City of Brantford provided an inventory of vacant commercial land and buildings (refer to the Vacant Commercial Land map Map 1 in Appendix A). The following is a summary of this information: There are 29 vacant land sites identified. These range in size from less than 1 acre to in excess of 13 acres (5 hectares). Together, these sites total 77.2 acres (roughly 31 hectares). There are 2 prominent vacant building sites identified, totaling 11.6 acres (4.7 hectares). Table 6 below illustrates the inventory of vacant commercial land. There are 29 sites with an aggregate site area of 77.2 acres (31.2 hectares). At a benchmark retail-commercial site coverage of 25%, these lands have the potential to accommodate approximately 842,000 sf of space (78,200 M 2 ). At a higher site coverage of 40%, these lands could accommodate almost 1.35 million sf (125,000 M 2 ) of space. The vacant sites vary in size, and there are up to six sites that can accommodate over 100,000 sf of retailcommercial space, and up to eight sites that can accommodate over 50,000 sf, depending on site coverage. At 25% site coverage, three of the sites can accommodate equal to or greater than 100,000 sf (roughly 10,000 M 2 ) of retail-commercial space (assuming single-storey construction), which could accommodate a range of retail formats and stores sizes. At 40% site coverage, the number of sites that could accommodate more than 100,000 sf (roughly 10,000 M 2 ) of retail-commercial space increases to six. Brantford OPR Municipal Comprehensive Review 18
At a 25% site coverage, there are seven sites that can accommodate over 50,000 sf (approximately 5,000 M 2 ), which is roughly the size of a neighbourhood shopping plaza. At a 40% site coverage, there are a total of eight sites with the capacity to accommodate over 50,000 sf (approximately 5,000 M 2 ) of retail space. TABLE 6. VACANT LAND SITES SITE # LOCATION SITE AREA (ACRES) SITE AREA (HECATRES) FORMER USE POTENTIAL BUILDING SPACE (SF) (25% COVERAGE) POTENTIAL BUILDING SPACE (M 2 ) (25% COVERAGE) POTENTIAL BUILDING SPACE (SF) (40% COVERAGE) POTENTIAL BUILDING SPACE (M 2 ) (40% COVERAGE) 1 333 King George Rd. 8.80 3.56 96,000 8,920 153,000 14,210 2 319 King George Rd. 6.00 2.43 65,000 6,040 105,000 9,750 3 106 Paris Rd. 0.50 0.20 Single Family 5,000 460 9,000 840 4 Lynden Rd. 5.90 2.39 64,000 5,950 103,000 9,570 5 Lynden Rd. 5.60 2.27 61,000 5,670 98,000 9,100 6 573-585 Colborne St. 10.60 4.29 Canadian Tire Plaza 115,000 10,680 185,000 17,190 7 7 Stanley St. 0.47 0.19 Gulf Self Serve Gas 5,000 460 8,000 740 8 547-549 Colborne St. 0.42 0.17 Golden Glass/Auto 5,000 460 7,000 650 9 446-450 Colborne St. 0.24 0.10 Various Commercial 3,000 280 4,000 370 10 415-417 Colborne St. 0.24 0.10 Residential/Commercial 3,000 280 4,000 370 11 151 Clarence St. 0.82 0.33 Wreck Yard 9,000 840 14,000 1,300 12 27 Newport St./33 Newport 0.59 0.24 6,000 560 10,000 930 13 166-176 Greenwich St. 1.74 0.70 Fire Hall 19,000 1,770 30,000 2,790 14 13-17 Clarence St. 0.16 0.06 PUC Lot 2,000 190 3,000 280 15 182 Dalhousie St. 0.15 0.06 2,000 190 3,000 280 16 281 Colborne St. 0.17 0.07 Pioneer Gas 2,000 190 3,000 280 17 27 Nelson St. 0.23 0.09 Parking Lot 3,000 280 4,000 370 18 100 Dalhousie St. 0.11 0.04 Dempsters Furs 1,000 90 2,000 190 19 Diana Ave./ Bell Ln./48 Bell 9.19 3.72 100,000 9,290 160,000 14,860 20 Blackburn Dr. 3.21 1.30 35,000 3,250 56,000 5,200 21 234 Henry St. 13.25 5.36 144,000 13,380 231,000 21,460 22 225 Henry St. 0.90 0.36 10,000 930 16,000 1,490 23 64-68 King George Rd. 1.35 0.55 Vacant Back Lot 15,000 1,390 24,000 2,230 24 129 King George Rd. 0.61 0.25 Vacant Back Lot 7,000 650 11,000 1,020 25 164 King George Rd. 0.97 0.39 Single Family 11,000 1,020 17,000 1,580 26 240 King George Rd. 1.25 0.51 Auto Dealer 14,000 1,300 22,000 2,040 27 20 Stanley St. 0.35 0.14 Brant Dairy 4,000 370 6,000 560 28 Colborne Street 2.70 1.09 29,000 2,690 47,000 4,370 29 315 Colborne Street 0.65 0.26 7,000 660 11,000 1,050 Total Source: (29) City of Brantford 77.17 31.24 842,000 78,200 1,346,000 125,070 Brantford OPR Municipal Comprehensive Review 19
Table 7 below illustrates the inventory of notable vacant commercial buildings. There are two sites with an aggregate site area of 11.6 acres (4.7 hectares).at a benchmark retail-commercial site coverage of 25%, these vacant commercial building sites have the potential to accommodate approximately 127,000 sf of space (11,800 M 2 ). At a higher site coverage of 40%, some 203,000 sf (18,800 M 2 ) of retail-commercial space could be developed. However, the decision whether to redevelop or re-use the building(s) on site impacts the overall achievable retail-commercial density. TABLE 7. VACANT BUILDING SITES SITE # LOCATION SITE AREA (ACRES) SITE AREA (HECATRES) FORMER USE 1 101 Market St. S. 4.28 1.73 Go Kart Track 2 175-181 Lynden Rd. 7.35 2.98 The Brick Total 11.63 4.71 Source: City of Brantford Expansion/Infill Opportunities In addition to vacant land parcels, there is an opportunity to accommodate future retail-commercial demand on some existing sites through expansion/infill. The most prominent opportunity is at Lynden Park Mall. City staff have estimated the expansion opportunity to measure approximately 22.0 acres (8.9 hectares). Based on 25% site coverage, approximately 240,000 sf (roughly 22,300 M2) of building area could be accommodated, however, this would depend whether the expansion space was connected to the existing Mall, or whether it was added through pad sites on the periphery of the property. At a higher site coverage ratio, the size of the new development would increase further. Ultimately, the expansion potential is dependent on the configuration of the building(s) on the site. Cushman & Wakefield notes that a prior proposal (dated December, 2008) envisioned a two-phase expansion of Lynden Park Mall which would have included new outparcels (almost 150,000 sf or 13,900 M2) as well as an expansion to the Mall itself (140,000 sf or 13,000 M2). City staff has identified three other major expansion opportunities at 25 Holiday Dr., 195 Henry St., and 221 Henry St. These sites total approximately 8.9 acres (3.6 hectares). At a site coverage of 25%, these three sites could accommodate an estimated 100,000 sf (9,000 M2) of future retail-commercial space. The aggregate expansion potential increases to 155,000 sf (14,400 M2) if a 40% site coverage is achieved for the new development. Figure 14 below presents the composition of new retail-commercial development in Brantford this past decade, based upon building permit data. Smaller buildings represent the largest share of overall development activity, with buildings less than 5,000 sf (approximately 500 M 2 ) accounting for just over one-third of all permits with a known building area. Brantford OPR Municipal Comprehensive Review 20
# of Projects RETAIL-COMMERCIAL BUILDING PERMITS IN BRANTFORD SIZE OF BUILDING 35 30 25 20 15 10 5 0 < 5,000 sf 5,000-10,000 sf 10,000-25,000 sf 25,000-50,000 sf < 50,000 sf Building Size (sf) Figure 14. Composition of New Retail Development Source: City of Brantford Land Needs Projection Cushman & Wakefield utilized recent population projections prepared by Hemson Consulting Ltd. to assess the forecast demand for retail-commercial land. Other key inputs include the retail space per capita and retail site coverage analysis presented in the Market Overview section of this report. Population Projection Table 8 presents the projection of population growth, as prepared by Hemson Consulting Ltd. Some observations about this projection are as follows: The forecast envisions an increase in the population from around 96,420 residents in 2011 to over 162,750 residents by 2041. This represents an average annual increase of approximately 2,210 residents. The rate of population growth per five-year increment in the 2001-2006 and 2006-2011 periods of around 4.0% is significantly lower than the projected rate of growth during each of the five-year increments in the forecast model. The 2021-2026 F increment is forecast to be the peak population growth period, with the population expanding at a rate of 10.8% during this time frame. The rate of population growth in following time periods slows. Brantford OPR Municipal Comprehensive Review 21
Population Growth TABLE 8. POPULATION FORECAST YEAR CENSUS CENSUS TOTAL TOTAL (% CHANGE) (% CHANGE) 2001 86,420 90,016 2006 90,185 4.4% 94,148 4.6% 2011 93,655 3.8% 96,419 2.4% 2016 F 100,709 7.5% 103,684 7.5% 2021 F 110,372 9.6% 113,635 9.6% 2026 F 122,253 10.8% 125,871 10.8% 2031 F 135,299 10.7% 139,433 10.8% 2036 F 147,189 8.8% 151,537 8.7% 2041 F 158,087 7.4% 162,753 7.4% Increase 2011-2041 64,432 66,344 Source: Hemson Consulting Ltd. POPULATION PROJECTION 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2001-2006 2006-2011 2011-2016 F 2016-2021 F 2021-2026 F 2026-2031 F 2031-2036 F 2036-2041F Census Total Figure 15. Population Growth by Five-Year Census Period, 2001 to 2041 Source: Hemson Consulting Ltd. Brantford OPR Municipal Comprehensive Review 22
Scenario 1 Base Case According to the Census, the population of Brantford in 2011 was 93,655. This translates to a figure of 26.8 sf of shopping centre space per capita (2.5 M 2 per capita). If the 2011 Hemson figure is utilized (which adds population due to the Census undercount), the population was 96,419 the difference representing an increase of 2,764 persons. Applying the total figure to the inventory of shopping centre space yields a ratio of 26.0 sf per capita (2.4 M 2 per capita). The following scenario assumes that in the future, retail development will continue at a rate consistent with the current ratio of shopping centre space per capita 26.0 sf per capita (2.4 M 2 per capita). With the total population projected to increase to 162,753 by 2041, there will be an additional 66,344 residents. This population growth indicates a demand for an additional 1.7 million sf (160,000 M 2 ) of shopping centre space. At a benchmark site coverage of 25%, this new shopping centre development will require an estimated 158.3 acres (64.1 hectares) (Table 9). TABLE 9. LAND DEMAND PROJECTION SCENARIO 1 (BASE CASE) VARIABLE 2011 2041 CHANGE 2011-2041 Population 96,419 162,753 66,334 Present Shopping Centre Inventory (sf) 2,505,000 Present Shopping Centre Inventory (M2) 232,800 Shopping Centre Space per Capita (sf) 26.0 26.0 Shopping Centre Space per Capita (M2) 2.4 2.4 Required New Shopping Centre Space (sf) 1,724,000 Required New Shopping Centre Space (M2) 160,000 Projected Shopping Centre Inventory (sf) 4,230,000 Projected Shopping Centre Inventory (M2) 393,000 Site Coverage 25% 25% New Land Required (acres) 158.3 New Land Required (hectares) 64.1 Source: Cushman & Wakefield, Hemson Consulting Ltd., Canadian Directory of Shopping Centres Scenario 2 Reduced Shopping Centre Space per Capita Emerging retail trends including smaller store formats being tested by various retailers, as well as increasing sales through online shopping are anticipated to translate to a reduced amount of shopping centre space per capita in the future. In this scenario, we examine the impact of a roughly 15% reduction in the amount of shopping centre space demanded per capita by 2041 (Table 10). This would recognize both increasing sales within existing centres and new centres on a per square foot (per square metre) basis, as well as an increase in e-commerce activity. This scenario results in a requirement for some 100 acres (40 hectares) of land to accommodate projected demand. Brantford OPR Municipal Comprehensive Review 23
TABLE 10. LAND DEMAND PROJECTION SCENARIO 2 (REDUCED SPACE PER CAPITA) VARIABLE 2011 2041 CHANGE 2011-2041 Population 96,419 162,753 66,334 Present Shopping Centre Inventory (sf) 2,505,000 Present Shopping Centre Inventory (M2) 232,800 Shopping Centre Space per Capita (sf) 26.0 22.0 Shopping Centre Space per Capita (M2) 2.4 2.0 Required New Shopping Centre Space (sf) 1,075,000 Required New Shopping Centre Space (M2) 100,000 Projected Shopping Centre Inventory (sf) 3,580,000 Projected Shopping Centre Inventory (M2) 333,000 Site Coverage 25% 25% New Land Required (acres) 98.7 New Land Required (hectares) 40.0 Source: Cushman & Wakefield, Hemson Consulting Ltd., Canadian Directory of Shopping Centres Scenario 3 Reduced Shopping Centre Space per Capita at a Higher Density In addition to retail trends pointing to a reduced requirement for retail space per capita, contemporary city planning is calling for increased densities for new development particularly in areas cited for intensification. This third land use demand scenario explores the impact of a higher site coverage compared to the status quo a site coverage of 40%, versus the 25% that is the average for Brantford s existing shopping centres. In Scenario 3, the required land to accommodate new retail demand totals 61.7 acres (25.0 M 2 ), which is roughly 37% less land required compared to Scenario 2. The only variation in the modeling assumptions between Scenario 2 and Scenario 3 is the site coverage. TABLE 11. LAND DEMAND PROJECTION SCENARIO 3 (reduced space per capita at a higher density) VARIABLE 2011 2041 CHANGE 2011-2041 Population 96,419 162,753 66,334 Present Shopping Centre Inventory (sf) 2,505,000 Present Shopping Centre Inventory (M2) 232,800 Shopping Centre Space per Capita (sf) 26.0 22.0 Shopping Centre Space per Capita (M2) 2.4 2.0 Required New Shopping Centre Space (sf) 1,075,000 Required New Shopping Centre Space (M2) 100,000 Projected Shopping Centre Inventory (sf) 3,580,000 Projected Shopping Centre Inventory (M2) 333,000 Site Coverage 25% 40% New Land Required (acres) 61.7 New Land Required (hectares) 25.0 Source: Cushman & Wakefield, Hemson Consulting Ltd., Canadian Directory of Shopping Centres Brantford OPR Municipal Comprehensive Review 24
Land Demand Conclusions The conclusion of these land demand projection models is that the City of Brantford will be required to plan for approximately 60-160 acres (25-64 hectares) of additional retail-commercial lands to absorb the future shopping centre development demand, at this forecast population growth rate. This is in addition to the 77.2 acres of available vacant land available to absorb retail land demands. This represents an increase in shopping centre space of approximately 57,500 sf (5,300 M 2 ) annually, in the Base Case scenario (Scenario 1), or approximately 35,800 sf (3,300 M 2 ) annually, in the Reduced Space per Capita scenario (Scenario 2) and the Reduced Space per Capita at a Higher Density scenario (Scenario 3). We note that our analysis of new retail-type building permits from 2004-2013 indicates new supply of approximately 665,000 sf (69,200 M 2 ) during this period, or an annual average of approximately 67,000 sf (6,200 M 2 ). With a population increase of approximately 6,400 persons during the 2001-2011 time period (which roughly corresponds with the building permits data timeframe), the anticipated growth in retail supply on the basis of 26.0 sf per capita (2.4 M 2 per capita) would have been 166,400 total sf (15,500 M 2 ). Clearly, the city has experienced an aggressive cycle of new retail-commercial development that is unlikely to be sustained in the near term, based upon population growth projections. As has been seen in Brantford recently, retail development may occur in an irregular pattern of development, with large anchor tenants and ancillary commercial-retail units developed in phases within a large development site (such as a power centre), or perhaps all at once in a smaller format development (such as a grocery-anchored centre). Supply Versus Demand Conclusions The city has a vacant retail-commercial vacant land inventory of some 77.2 acres (almost 31 hectares). As well, there is a vacant inventory of buildings on lands totalling a site area of 11.6 acres (4.7 hectares), which may provide a range of building formats that can accommodate retail-commercial re-use or redevelopment. The land demand scenarios presented above identify a requirement for approximately 60-160 acres (25-64 hectares) of retailcommercial lands to absorb the future shopping centre development demand. The following summarizes the conclusions for each of the scenarios: In the Base Case scenario (Scenario 1), there is an insufficient supply of vacant lands, vacant building sites, and major expansion opportunities, to meet the overall projected retail-commercial space demand. In the Reduced Shopping Centre Space per Capita scenario (Scenario 2), the vacant land supply alone is insufficient to accommodate the projected retail-commercial space demand. Some combination of vacant land, vacant buildings and retail expansions will be required to satisfy the land demand requirement. In the Reduced Shopping Centre Space per Capita at a Higher Density scenario (Scenario 3), there is an adequate amount of vacant land supply to meet future demand, given the density that is projected (40% site coverage ratio). Vacant buildings and expansion at existing sites could also contribute to meeting this demand. Brantford OPR Municipal Comprehensive Review 25
TABLE 12. SUPPLY VERSUS DEMAND SUMMARY DEMAND Area (sf) Area (M 2 ) 26 sf /capita (historic) 1,724,000 160,000 22 sf/capita (projected) 1,075,000 100,000 Retail-Commercial Space Potential Site Coverage 25% Site Coverage 40% SUPPLY Area (acres) Area Area (sf) Area (M 2 ) Area (sf) Area (M 2 ) (hectares) Vacant Land 77.2 31.2 842,000 78,200 1,346,000 125,000 Vacant Buildings 11.6 4.7 126,700 11,800 203,000 18,800 Expansion Opportunities 30.9 12.5 337,000 31,300 538,000 50,000 Total 119.7 48.4 1,305,000 121,300 2,087,000 193,800 ANALYSIS OF SCENARIOS Area (acres) Area (hectares) Scenario 1 Scenario 2 Scenario 3 Scenario 1 Scenario 2 Scenario 3 Land Demand 158.3 98.7 61.7 64.1 40.0 25.0 Land Supply Vacant Land 76.5 76.5 76.5 31.0 31.0 31.0 Land Supply Total (Note 1) 119.7 119.7 119.7 48.4 48.4 48.4 Surplus/(Deficit) Vacant Land (81.8) (22.2) 14.8 (33.1) (9.0) 6.0 Surplus/(Deficit) Total (Note 1) (38.6) 21.0 58.0 (15.7) 8.4 23.4 Note 1: Land Supply (Total) includes Vacant Land, Vacant Buildings, and Expansion sites. Source: Cushman & Wakefield and City of Brantford Other important considerations include the following: Secular retail market changes translating to a declining amount of retail space per capita trends should be planned for. o The growing influence of mobile technology and e-commerce is changing consumer shopping behaviour. The type and location of the vacant retail-commercial lands may not be appropriate from a location and market demand perspective to accommodate anticipated growth. o Of the remaining vacant retail-commercial sites, many are situated in the Downtown area (often less than 1 acre in size). However, the shift in retail development has been to the north-central part of the city. The ability to re-use or redevelop existing vacant building sites may vary from site to site. o The size and orientation of buildings, as well as parking provision, may impact the re-use or redevelopment potential of certain sites. The ownership (private versus corporate) of the vacant lands and building sites must be considered in evaluating their potential suitability as a retail-commercial development site. o A property owner may elect to maintain ownership of a site, rather than see a site developed with a competitive business format (such as a grocery store) within the same trade area as its own business. Brantford OPR Municipal Comprehensive Review 26
The relatively small size of many of the vacant retail-commercial land and buildings parcels inhibits largerscale retail-commercial development, however, there are some sites that can accommodate upwards of 50,000 sf and 100,000 sf. o At a benchmark site coverage of 25%, there are seven vacant land sites that can accommodate over 50,000 sf (approximately 5,000 M 2 ), which is roughly the size of a neighbourhood shopping plaza. At this benchmark site coverage, three of the sites can accommodate equal to or greater than 100,000 sf (roughly 10,000 M 2 ) of retail-commercial space (assuming single-storey construction). If 40% site coverage were achieved, the number of sites that could accommodate over 50,000 sf (approximately 5,000 M 2 ) increases to eight. Brantford OPR Municipal Comprehensive Review 27
Commercial Policy Review The Evolution of Community Planning & Commercial Development Commercial land use planning, retail trends, and building formats have been evolving over the last several decades in response to changing lifestyles and social preferences, as well as ideas about community planning and development. From the mid-to-late twentieth century, the common commercial hierarchy adopted by municipalities across North America included an historic Downtown, regional malls, community-scaled malls and plazas, and locally-scaled commercial nodes that offered convenience items and personal services. As described in the Market Overview, retail trends over the last two decades included a shift towards larger format power centres, and super regional malls and a corresponding decline of the traditional retail centres. However, communities from across the continent are now also reimagining themselves as complete and walkable communities, and turning away from space-extensive and sprawling retail formats that are segregated from the places where people live and work. Within this context, main streets are making a comeback by providing an alternative shopping experience, and big box retailers are even developing smaller format stores that are better integrated with urban environments. Online shopping is also spurring changes in commercial development, in terms of reducing the overall amount of commercial space needed per capita to satisfy local demand. The new commercial planning model clearly emphasizes compact development and mixed uses, as well as intensification and a nodes and corridors structure. From a commercial planning perspective, this includes opportunities to retrofit existing commercial strips and aging retail centres to support the long-term success of established neighbourhoods, as well as the viability of public transit. Provincial Policy Framework The Provincial planning framework has been informed by, and then subsequently influenced the changing approaches to community planning and commercial development described above. As concerns about the impact of suburban sprawl came to a head in the 1990s and early 2000s, the Provincial government began formulating a more hands on approach to planning in Southern Ontario that emphasizes complete communities and transit supportive development. Additions to the Provincial planning framework since that time have included a new Provincial Policy Statement (2005, updated in 2014), the Places to Grow Growth Plan for the Greater Golden Horseshoe (2006), the Greenbelt Plan (2006), and the Big Move Regional Transportation Plan (2008). Although much of the Provincial planning framework, and the Growth Plan in particular, is focused on residential and employment land use planning, expectations for commercial development are integrated through the emphasis on mixed use development and complete communities, intensification, and the revitalization of urban centres, including historic Downtowns. Brantford OPR Municipal Comprehensive Review 28
Mixed Use Development & the Intensification Framework for the Greater Golden Horseshoe Integrating pedestrian-oriented commercial land uses as a central component of successful communities is strongly promoted under the Growth Plan. One of the guiding principles of the Growth Plan is to build compact, vibrant and complete communities (Section 1.2.2) that provide convenient access to jobs, local stores and services, alongside a full range of housing choices, community facilities and open spaces (Sections 2.2.2.1.h and 2.1). Moreover, as municipalities plan for complete communities, they are required to ensure high quality urban design is achieved to create attractive and vibrant places that support walking and cycling for everyday activities and are transit supportive (Section 6.3.1.2 c & d). The shift to higher quality, compact and mixed use commercial development is also expressed through the intensification policies of the Growth Plan, which are focused on the following framework for shaping the regional structure: urban growth centres; intensification corridors; major transit station areas; brownfield sites and greyfields (Section 2.1). Not only is the intensification framework partly based on historical elements of the commercial hierarchy, commercial uses are identified as part of the land use mix for urban growth centres (Section 2.2.4.4.a) and Major Transit Station Areas (Section 2.2.5.1.b). Local services are also highlighted as part of the land use mix for intensification corridors (Section 2.2.5.3). In addition, the Growth Plan recognizes the potential to transform legacy commercial areas (i.e. the regional malls and strip plazas) by promoting the intensification and revitalization of greyfields (i.e. underutilized commercial properties) through mixed use infill development. As a Plan that supports the implementation of the Provincial Policy Statement (PPS) within the Greater Golden Horseshoe, the Growth Plan is consistent with PPS policies that address strong healthy communities, efficient and resilient development and land use patterns, sustainable transportation systems and options, and long-term economic prosperity. Local Policy Context The Vision & Principles for Brantford s New Official Plan The Vision and Principles identified by members of the Brantford community establish the foundation from which to identify planning issues and key policy directions that will inform the Official Plan Review. With regard to commercial land uses, it is the community s Vision that, Brantford OPR Municipal Comprehensive Review 29
The people of Brantford are healthy and prosperous. They live in complete communities that are inclusive, accessible, compact, and well connected for all modes of travel. Residents have access to a range of community services and recreational amenities to support their well-being. Two of the nine Principles also inform the physical composition of commercial uses: 2. New development will occur in existing communities, and will support the ongoing revitalization of the Downtown and emerging intensification corridors. Redevelopment will be compatible with existing uses, while supporting a transition to more compact and mixed use communities. New development will be efficient, cost-effective, and fiscally responsible, while demonstrating high quality urban design that contributes to the recognition of Brantford as a beautiful city. 3. The City will endeavour to achieve healthy communities that are accessible and inclusive with a diversity of housing options, and amenities and services close to where people live. Existing Commercial Area Hierarchy Under Section 5.0 of the current Official Plan, Commercial Areas are identified as part of the Official Plan Concept or urban structure, alongside residential, open space, institutional and industrial areas, as well as Six Nations of the Grand River Territory. Specific Land Use policies for eight commercial land use designations are provided under Section 7.3, and summarized in Appendix B, which highlights the characteristics of each commercial area type, permitted uses, and other key policies, such as with regard to height or limits on the scale of development. The existing designations reflect a traditional commercial hierarchy, characterized by: the historic Downtown (Core Commercial Area); regional/city-wide malls (District Centre Commercial Areas); community plazas and neighbourhood nodes (Community and Neighbourhood Centre Commercial Areas); as well as, stand-alone and strip retail development, which is typically located along arterial roads (General Commercial). Recent development trends are evident in newer designations, which include Mixed Commercial-Residential Areas on the outskirts of Downtown, and, New Format Commercial Area, which applies to one node at Wayne Gretzky Parkway and Henry Street. These two designations reflect the divergent trends towards both smaller format retail as part of mixed use development, and big box development that is intended to draw on the regional market. Convenience Commercial uses are also permitted throughout Neighbourhoods, but are not designated on Schedule 1-1 the Land Use Plan. The existing commercial hierarchy/land use policies are consistent with a post-war community planning model where the places where people shop are segregated from where they live. This model reinforces automobile use and is no longer consistent with the Vision and Principles expressed by the Brantford community which emphasizes complete communities, where amenities and services [are] close to where people live. As described below, a Brantford OPR Municipal Comprehensive Review 30
transition towards a more compact and mixed use approach to commercial land use planning has already started through recent amendments to the Official Plan. This report identifies what additional steps are needed to continue that transition in line with the community s vision. Mixed Uses in Traditional Commercial Areas Prior to the adoption of Official Plan Amendment 184 in December 2013, mixed uses were not permitted in the Commercial Area designations, except within the Core Commercial and Mixed Commercial-Residential Designations. OPA 184 has, however, introduced policy language under Section 7.3 of the Official Plan to permit multi-unit residential uses within the District Centre Commercial Area (7.3.3), Community Centre Commercial Areas (7.3.4), and General Commercial (7.3.5). The policy amendments specifically recognize that all types of permitted uses in these areas (e.g. retail, residential, institutional) may be permitted in either mixed use or single use buildings in accordance with the City s Urban Design Guidelines. Mixed uses continue to not be permitted in Neighbourhood Centre Commercial Areas and the New Format Commercial Area. Intensification of Commercial Areas Under existing Official Plan policies, traditional commercial areas are planned to become intensified over the coming decades. Section 7.3.1.4 states that it is the City s priority to direct the majority of new retail to existing retail areas, rather than designating new commercial lands. More importantly, much of the existing commercial land supply is located within designated Intensification Corridors and the Urban Growth Centre - and conversely these Intensification Areas are largely comprised of commercial lands. The significant overlap between the commercial land supply and designated Intensification Areas is demonstrated on Map 1 in Appendix B. Intensification Areas, including intensification corridors and the Urban Growth Centre (a.k.a. Downtown), are the central components of the City s growth management strategy. Section 15.5 of the Official Plan identifies Intensification Corridors as a focus for increased residential and employment densities and mixed use development and redevelopment. The intention is for these areas to redevelop with a mix of uses at transit supportive densities. Although the current Official Plan states that intensification in these areas will likely be limited in the short and midterm through to 2031, these lands already have a role to play in achieving the Province s, and the municipality s delegated, intensification target of 40% of annual residential growth to occur through intensification. The Urban Growth Centre is also subject to a density target of 150 people and jobs per hectare. Notwithstanding the significant overlap between commercially-designated lands and designated Intensification Areas, the Official Plan policy framework has yet to be comprehensively updated to provide for an integrated planning approach for these two designations. For example, existing commercial designations that apply within Intensification Areas (outside of the Downtown) provide limited, if any, guidance with regard to minimum or maximum height or density requirements (see Appendix B). Brantford OPR Municipal Comprehensive Review 31
Commercial Policy Conclusions A New Vision for Retail in Brantford The existing commercial hierarchy/land use policies reflect a post-war community planning model that is no longer consistent with the Vision and Principles expressed by the Brantford community. The new Vision emphasizes complete communities, where amenities and services [are] close to where people live. Recent Official Plan Amendments have signalled a transition towards a more compact and mixed use approach to commercial land use planning, and additional steps are identified within this report. An Integrated Hierarchy for Mixed Use Development The existing commercial hierarchy is comprised of eight designations, including Core Commercial, District Centre Commercial, General Commercial, New Format Commercial, Community Centre Commercial, Neighbourhood Centre Commercial and Mixed Commercial-Residential. Convenience Commercial uses are also permitted throughout Residential Areas. The existing commercial designations largely overlap with the growth management framework, including the Urban Growth Centre and other Intensification Areas (primarily corridors). Not only are there opportunities to simplify the commercial hierarchy, but there is also a need to integrate it with the intensification framework. The new hierarchy should be coherent and integrated with an updated urban structure for the City. It should reflect a nodes and corridors approach to land use planning that supports walking, cycling and transit, with higher density and mixed use development in locations that reinforce the long-term success of existing neighbourhoods and optimize the use of vacant and underutilized sites, such as greyfields. Built Form Policies to Support Intensification The existing commercial area designations provide limited guidance, if any, regarding built heights or density. Maximum heights are only specified for the Commercial Core (8 storeys) and Neighbourhood Commercial Centres and Convenience Commercial (2 storeys). Greater guidance is needed to facilitate intensification, and create a pedestrian-oriented and efficient built form, while protecting existing low rise neighbourhoods. Each new commercial designation should include minimum and maximum building height policies, with supporting angular plane requirements and built form objectives. Such a policy framework will provide the foundation for updated zoning, including pre-zoning for priority redevelopment areas. Pedestrian-friendly Design in All Retail Areas Commercial uses are an important component of complete communities where people can access goods and services near to where they live or at least that is the vision. Achieving that vision will mean building and retrofitting commercial areas in a new way to ensure that they are functionally integrated with their surroundings, and safe for pedestrians. At a site planning level this means creating stronger connections between retail areas and the surrounding street, sidewalk, bikeway and transit network, as well as providing safe, accessible and highly visible crossings and routes through the site. It also means orienting buildings and building entrances to define the street edge, and including amenities such as benches, waste receptacles, bicycle parking, shade and landscaping. New policies are needed to address the urban design and site planning considerations for all types of commercial areas even those that are car-oriented. No matter the type of retail area, it should always be safe and attractive to pedestrians, cyclists and transit users as a first principle. Brantford OPR Municipal Comprehensive Review 32
Retail Streets & Districts in the Downtown The Downtown is currently treated with a single designation Commercial Core, however, recent planning studies, including the Downtown Master Plan, highlight the multi-faceted function of Downtown and unique areas within the core that warrant distinct policies. With regard to commercial land uses, a more nuanced framework is needed to concentrate main street retail activity along Dalhousie, Colborne and Market Streets, and to identify large format retail opportunities within a new mixed use district in Lower Downtown. More broadly, detailed and area-specific policies are needed within the Official Plan to guide redevelopment and investment of all types within the Downtown. Facilitating Large-scaled Mixed Use Redevelopment As Brantford grows over the coming decades, it is important that there is a sufficient supply of sites to accommodate different types of development, including large-scale mixed use projects within the UGC, in District Centres, and along intensification corridors. These large sites will complement smaller and medium scaled intensification opportunities, and ensure that Brantford remains attractive to a diversity of investors. In addition to the large opportunity site in Lower Downtown, the commercial market analysis identified several larger redevelopment opportunity areas, which are each able to accommodate upwards of 50,000 or 100,000 square feet of retail-commercial space. These sites should be identified using an overlay. As large redevelopment sites, these areas should be subject to comprehensive area planning. A Framework for Policy Development Based on the preceding analysis, the following designations and overlays are proposed as a template for updating the commercial area hierarchy under the new Official Plan: Downtown (DT) A new Downtown designation should be implemented to reflect the key directions of recent planning studies, including the Downtown Master Plans. Proposed sub-designations for districts within the Downtown, include: - Downtown Core (DTC) (primarily characterized by civic and commercial uses within a mixed use context); - Upper Downtown (UDT) (primarily characterized by stable residential uses within a mixed use context); - Lower Downtown (LDT) (the future mixed use node); and, - Overlays within the Downtown should be used to develop area-specific policies for Retail Streets (Dalhousie, Colborne and Market Streets) and Large Redevelopment Sites (in Lower Downtown). District Centre (DC) including Lynden Park Mall and Brantford Common, which should be subject to area planning. Mixed Use Corridor (MUC) this designation would include the existing New Format Retail, General Commercial, Community Centre Commercial designations. In recognition that not all corridors will be the same, corridor and/or segment studies will be needed to guide future development. The proposed corridors include King George-St. Paul MUC, Charing Cross-Henry MUC, Fairview MUC, Park Road-West Street MUC, Brant Avenue MUC, Colborne Street MUC, and Erie Ave MUC. Brantford OPR Municipal Comprehensive Review 33
Neighbourhood Node this designation would include the existing Neighbourhood Commercial areas. Under the new commercial planning framework, Convenience Retail should continue to permitted in Neighbourhoods. Overlays for Large Redevelopment Sites should also be provided for those sites identified in the commercial market analysis as having potential to accommodate upwards of 50,000 or 100,000 square feet of commercial space. Beyond permitted land uses, each land use designation should address building heights, as well as other built form and urban design objectives. The emphasis should be to facilitate a transition towards more compact, mixed use, and pedestrian friendly retail-commercial development. Brantford OPR Municipal Comprehensive Review 34
Part B/ Employment Lands Brantford OPR Municipal Comprehensive Review 35
Part B/ Employment Lands Executive Summary The Brantford industrial market has seen a rebound from the late-2008-early-2009 recession. New construction activity has resumed, and the amount of vacant space has declined by approximately two-thirds during the past four years, to a current estimated level of around 7.5%. Ongoing investments in industrial buildings and land sale transactions indicate a healthy market. The City of Brantford has a total of approximately 945 gross acres (380 hectares) of vacant employment lands, as of January, 2015. City staff has estimated the net developable area for all vacant parcels. These adjustments translate to a figure of approximately 745 net acres (300 net hectares) city-wide. Together, the four largest parcels comprising 464 net acres (188 hectares) account for 60% of the total vacant employment land area. Cushman & Wakefield has utilized recent employment projections prepared by Hemson Consulting Ltd. to assess the forecast demand for employment land by type of employment. We have considered two demand scenarios, with differing assumptions regarding employment density and site coverage. The scenarios identify a shortage of employment land in the approximate range of 800-1,100 net acres (330-450 net hectares). This is based upon our analysis of the current unconstrained vacant land supply of 708 net acres (285 net hectares) after a vacancy factor of 5% is included. On a gross land area basis, the shortfall is in the range of 1,090-1,480 acres (440-600 hectares). When employment growth is examined on a straight-line basis, the city will exhaust its supply of vacant employment land by about 2027. The existing policy context from the current Official Plan has served the City well in attracting a solid and rejuvenated economic base. Notwithstanding that history, the policy framework is not reflective of current best practices, and does not include the employment area protection policies facilitated by the Provincial government since 2005. Further, the current Official Plan provides a designation that mixes retail/commercial uses with more traditional business park and industrial uses, and this approach is not supported by Provincial planning directives. Overall, the policy framework for the new Official Plan will need to be more reflective of Provincial policies, and updated to ensure the ongoing ability to attract new employers and protect existing industries. Brantford OPR Municipal Comprehensive Review 36
Employment Land Needs Importance of the Industrial/Employment Areas Brantford s employment areas are similar in many respects to established industrial/employment areas of most of Ontario s urban municipalities. The industrial business parks have been constructed over a period of several decades, with a mixture of heavy and light industrial land uses, along with supporting commercial/retail establishments. The individual employment areas exhibit their own character and mix of uses. For the most part, the industrial areas are not physically attractive apart from the more modern properties found in the Northwest Industrial Area but they are functional and broadly speaking, remain successful. Our site visits and discussions with local real estate brokers indicate a healthy level of building vacancy today, compared to conditions just a few years ago. There is no evidence of an excess of undeveloped land among the city s mature industrial areas. In general, industrial/employment land employment activities continue to be critical to the economic health of cities. There are a number of reasons, as follows: The industrial sector is Brantford s predominant generator of employment and it is projected to continue to grow and remain the largest category of employment. Industrial-type jobs provide relatively good employment opportunities for workers with lower levels of formal education compared to the services sector, including positions that often pay higher wages. Established industrial/employment areas are an important component of the municipal tax base, helping to maintain and improve local infrastructure and investment. The industrial sector particularly manufacturing jobs has a high multiplier effect, creating growth in other sectors of the local economy (such as construction activity, and demand for other business services). Employment areas provide small, cost-effective flexible space that is critical for start-ups and incubators for innovation in high technology sectors, making these older, industrially zoned areas important to a healthy and vital economy. After years of industrial activity, sites may carry a legacy of contamination (on-site and off-site). Under current economic conditions and existing remediation techniques, these parcels are often unsuitable for residential and commercial developments. For such properties, ongoing industrial activity is often the highest and best use. These areas supply employment opportunities for residents of Brantford and beyond. Having jobs in proximity to desirable residential communities creates an advantageous live-work relationship within the city, reducing travel trips and times. Opportunities to accommodate a full range and mixture of employment types including employment land employment is a fundamental principle of provincial policy directives, and a crucial element of an economically sustainable city. Provincial policy directives also promote the concept of a complete community, where residents can fulfill all or most of their daily requirements within city boundaries. Having a full range of opportunities for employment is fundamental to the complete community concept. Brantford OPR Municipal Comprehensive Review 37
Market Overview While Cushman & Wakefield compiles industrial and commercial real estate data, Brantford is not among the communities that are surveyed. The limits of our market survey are within the municipalities that comprise the Greater Toronto Area. As a result, this market overview is informed by discussions with Brantford s Economic Development staff, as well as active local real estate brokers, along with third-party real estate data sources. Brantford s two main industrial employment areas are the Northwest Industrial Area, and the Braneida Park Industrial Area. Each is favourably located at an interchange with Highway 403. Northwest Industrial Area is home to much of the newer industrial stock in Brantford including large warehouse and distribution facilities, as well as manufacturing operations. The Braneida Park Industrial Area is more mature, with a mix of building sizes and functions. Other generally older sites including Holmedale (north and south of the Grand River) and the South East Industrial Area are situated in the southeast and southwest parts of the city, respectively. Our discussions with local real estate market participants revealed a recent perceived improvement in the level of industrial vacancy in the market, as well as a renewed interest in industrial building investments for sale. Lower land costs continued to be a competitive advantage, despite an increase in development charges. There was generally a sense of optimism regarding near-term prospects for the industrial market. Industrial Inventory and Vacancy City staff and local real estate professionals do not have a definitive sense of the size of the local industrial building inventory. However, Brantford s Economic Development staff report that the overall level of industrial building vacancy has declined from an estimated 3 million sf (279,000 M 2 ) in 2010 down to approximately 1.14 million sf (106,000 M 2 ) by 2013. Cushman & Wakefield s Property Tax Services division provided data from the Municipal Property Assessment Corporation for properties assessed with an industrial-type classification (such as Standard Industrial, Warehouse, Industrial Mall, Industrial Condo, Heavy Industrial, Other Industrial, and a few other categories). The building size was not available for all properties. However, we have identified a known inventory of some 20 million sf (roughly 1.85 million M 2 ). Therefore, a current estimated vacancy of 1.14 million sf (106,000 M 2 ) translates to a vacancy rate of roughly 5.7%. Given that the area of some of the buildings is unknown (contributing to a larger overall inventory figure), the effective vacancy rate is even lower. Industrial Rental Rates Brantford s Economic Development staff estimates that industrial rental rates currently range from roughly $3.00 to $5.00 psf net ($32.30 to $53.80 per M 2 ). The weighted average asking net rent for the 43 listings tracked by Brantford s Economic Development Department as at January, 2014, was $3.90 psf ($41.80 per M 2 ). This sample of 43 industrial listings totals almost 1 million sf (93,000 M 2 ), or about 80% of the currently available space. Brantford OPR Municipal Comprehensive Review 38
Size (sf) Rent ($psf) This range of rental rates for available space has been fairly stable in recent years. These rates generally reflect the older industrial buildings in the community, as the newer facilities have a lower amount of vacant space (or are single-user buildings that are fully occupied). Therefore, implied rental rates for the newer buildings are at the upper end of this range, or beyond, in terms of achievable rent. Notably, local brokerage professionals indicated that rents in Brantford were generally more affordable compared to similar space in other Southern Ontario markets such as Cambridge, Kitchener, Waterloo, and the Hamilton area. INDUSTRIAL RENTAL RATES $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 Building Size (sf) Note: For scale purposes, we have excluded a 238,000 sf listing with an asking rate of $2.95 psf. Figure 16. Industrial Rental Rates Source: City of Brantford INDUSTRIAL VACANCIES BRANTFORD (JAN. 2014) 400,000 350,000 5 300,000 250,000 200,000 150,000 Number of Listings 12 5 2 100,000 19 50,000 0 < 10,000 sf 10,000-25,000 sf 25,000-50,000 sf 50,000-100,000 sf > 100,000 sf Figure 17. Industrial Vacancies Source: City of Brantford Brantford OPR Municipal Comprehensive Review 39
Vacant Employment Lands The City of Brantford has a total of approximately 945 gross acres (roughly 380 hectares) of vacant employment lands, as of January, 2015. There are 28 total vacant parcels identified in the City s survey (refer to the Vacant Industrial Land map Map 1 in Appendix C). The Northwest Industrial Area is home to the largest share of this vacant employment land (77% share, by land area), with 12 parcels totalling 725 gross acres (294 hectares). The Braneida Industrial Area South of 403, is home to 156 gross acres (63 hectares) of vacant employment land, accounting for a 16% share of the overall total. The Braneida Industrial Area North of 403, accounts for just 7% of the vacant land inventory, with 63 gross acres (25 hectares) across four land parcels. From an employment land needs perspective, it is useful to translate the gross land area into a net land area, since employment land occupancy benchmarks are typically expressed on a net basis. City staff has estimated the net developable area for all parcels, and has made adjustments based upon draft plans of subdivision, site accessibility, topographical and environmental issues, site configuration, and residential setback requirements. On an aggregate basis, there is a ratio of 79% net to gross land area for the 28 vacant parcels. This equates to a figure of approximately 745 net acres (300 net hectares) city-wide. This is illustrated on the exhibits below. There are several large land parcels within the inventory. Together, four parcels comprising 464 net acres (188 hectares) account for 60% of the total vacant employment land area. All four parcels are located in the Northwest Industrial Area. TABLE 13. VACANT EMPLOYMENT LAND NORTHWEST INDUSTRIAL AREA SITE # ACRES (GROSS) HECTARES (GROSS) ACRES (NET) HECTARES (NET) NET TO GROSS FACTOR 1 113.0 45.7 93.8 38.0 83% 2 253.3 102.6 207.0 83.8 82% 3 45.0 18.2 30.0 12.1 67% 4 18.0 7.3 18.0 7.3 100% 5 11.5 4.7 11.5 4.7 100% 6 4.0 1.6 0.0 0.0 0% 7 16.2 6.6 16.2 6.6 100% 8 12.3 5.0 12.3 5.0 100% 9 1.5 0.6 1.5 0.6 100% 10 60.5 24.5 31.5 12.8 52% 11 92.2 37.3 85.8 34.7 93% 12 97.6 39.5 77.4 31.3 79% Total (12) 725.1 293.5 585.5 236.8 81% Source: City of Brantford Brantford OPR Municipal Comprehensive Review 40
TABLE 14. VACANT EMPLOYMENT LAND BRANEIDA INDUSTRIAL AREA SOUTH OF 403 SITE # ACRES (GROSS) HECTARES (GROSS) ACRES (NET) HECTARES (NET) NET TO GROSS FACTOR 13 4.6 1.9 4.6 1.9 100% 14 7.5 3.0 7.5 3.0 100% 15 6.0 2.4 0.0 0.0 0% 16 4.0 1.6 4.0 1.6 100% 17 0.4 0.2 0.4 0.2 100% 18 8.4 3.4 4.0 1.6 48% 19 15.1 6.1 12.9 5.2 85% 20 14.0 5.7 10.0 4.0 71% 21 3.4 1.4 0.0 0.0 0% 22 37.0 15.0 37.0 15.0 100% 23 43.0 17.4 36.8 14.9 86% 24 12.1 4.9 10.0 4.0 83% Total (12) 155.5 62.9 127.2 51.4 82% Source: City of Brantford TABLE 15. VACANT EMPLOYMENT LAND BRANEIDA INDUSTRIAL AREA - NORTH OF 403 SITE # ACRES (GROSS) HECTARES (GROSS) ACRES (NET) HECTARES (NET) NET TO GROSS FACTOR 25 3.6 1.5 3.6 1.5 100% 26 29.7 12.0 14.1 5.7 47% 27 23.8 9.6 8.2 3.3 34% 28 5.8 2.3 5.8 2.3 100% Total (4) 62.9 25.4 31.7 12.8 50% Source: City of Brantford TABLE 16. VACANT EMPLOYMENT LAND TOTAL CITY AREA # SITES ACRES (GROSS) HECTARES (GROSS) ESTIMATED ACRES (NET) ESTIMATED HECTARES (NET) Northwest Industrial Area 12 725.1 293.5 585.5 263.8 Braneida Industrial Area - South of 403 12 155.5 62.9 127.2 51.4 Braneida Industrial Area - North of 403 4 62.9 25.4 31.7 12.8 Total (28 Sites) 28 943.5 381.8 744.4 301.0 Source: City of Brantford Brantford OPR Municipal Comprehensive Review 41
# of Projects In terms of ownership, privately owned lands account for almost all of the vacancy industrial lands. The City owns three parcels, although one is land locked and considered to be undevelopable (in Braneida Industrial Area South of 403). The other two total 26.2 net developable acres. From a municipal services perspective, approximately 25% (16 parcels totalling 188 net acres, or 76 net hectares) of the currently vacant employment land is serviced, while 75% (12 parcels totalling 556 net acres, or 225 net hectares) of the vacant employment land is un-serviced, but is generally capable of being serviced as needed. Building Permit Activity The City of Brantford provided historic manufacturing and non-manufacturing building permit data from January, 2003 through December, 2013. The building permits included new construction, building additions and alterations, and other building and site work. In terms of the count of projects, manufacturing and non-manufacturing permits followed a similar trend in terms of the number of permits issued from 2003 to 2006, but since 2007, the number of non-manufacturing permits has exceeded the number of manufacturing permits by a factor of about two. In 2007, there were 98 total permits issued, representing the peak of overall permit issuance activity this past decade. This past year represented the second consecutive year of increasing manufacturing building permits, reaching a figure of 30 total projects. Nonmanufacturing permits totalled 48 projects in 2013, just behind the pace of the prior two years. BRANTFORD BUILDING PERMITS NUMBER OF PROJECTS 70 60 50 40 30 20 10 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Manufacturing Non-Manufacturing Source: City of Brantford Figure 18. Building Permits Number of Projects The value of manufacturing building permits peaked in 2005 at almost $125 million. This represented the most active year by a factor of 2.5 times the next highest year. 2012 represented significant growth over the values seen from 2006-2011. The average annual manufacturing building permit value was roughly $30 million this past decade. In 2013, there was a total value of $16.5 million in manufacturing building permits. Brantford OPR Municipal Comprehensive Review 42
Size (sf) $ Millions Non-manufacturing building activity has remained more stable in terms of permit value this past decade, averaging around $21 million annually. The recent peak was in 2009, with 46 projects valued at $43.7 million. In 2013, there was a total value of $16.6 million in non-manufacturing building permits. BRANTFORD BUILDING PERMITS CONSTRUCTION VALUE $60 $50 * $40 $30 $20 $10 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Manufacturing Figure 19. Building Permits Construction Value Non-Manufacturing * Note: The actual Manufacturing construction value for 2005 was $124.7 million. This has been adjusted on this exhibit for scale purposes. It represents the highest value of construction building permits by a factor of about 2.5 times the next highest year Source: City of Brantford The following exhibit illustrates the historic new supply of manufacturing and non-manufacturing (commercial) buildings in Brantford. Significant manufacturing-type development in the 2004-2007 period reflected a very active development cycle, with several large projects (by Ferrero Canada Ltd., Kalbarri Developments Inc., Hanna Development Corp., First Gulf Industrial Development Inc., among others). 2013 s performance more closely reflects the historic norms recorded for much of this past decade. BRANTFORD BUILDING PERMITS NEW SUPPLY 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Manufacturing Non-Manufacturing Source: City of Brantford Figure 20. Building Permits New Supply Brantford OPR Municipal Comprehensive Review 43
In examining the types of permits, manufacturing activity has been fairly balanced between new building (29% of all permits), additions (24%), and alterations (36%). New buildings are important, as they contribute to absorption of employment lands, and mean that there is an increase in jobs unless the project represents the relocation of an existing business from elsewhere in the community. Building additions are notable, in that they reflect further investment in the industrial building stock, and may be precipitated by employment growth (actual new jobs, or future anticipated hiring) within a business. Alterations, on the other hand, may not necessarily arise from additional employment at a firm. For non-manufacturing permits, alterations have been the predominant type of permit issued, accounting for a 66% share of all activity this past decade. New building permits represent a 22% share of the activity, in terms of the number BRANTFORD of permits issued. MANUFACTURING BUILDING BRANTFORD NON-MANUFACTURING PERMITS TYPE OF PROJECT BUILDING PERMITS TYPE OF PROJECT Other 10% New 29% Other 5% New 22% Alteration 36% Addition 7% Addition 24% Alteration 66% Count of Projects Count of Projects Source: City of Brantford Figure 21. Manufacturing Building Permits Project Type Source: City of Brantford Figure 22. Non-Manufacturing Building Permits Project Type Transaction Activity Industrial Buildings We reviewed historic industrial building sales in Brantford from 2003 through 2013. Excluded from the analysis were transactions between related parties, power of sale, and other types of sales that may be considered as non-market deals, from a valuation perspective. A total of 71 market sale transactions were identified, with an aggregate value of almost $238 million. Of interest is the relative consistency in the transaction activity, which has generally ranged from $20 to $30 million in annual sales volume during the past decade, with about 5 to 10 sales each year. The peak year was 2005, with a significant portfolio sale of 1.5 million sf (140,000 M 2 ) in five buildings totalling $56 million. Brantford OPR Municipal Comprehensive Review 44
Building Size (sf) Price ($psf) Sales Volume ($ Millions) Count of Transactions BRANTFORD INDUSTRIAL BUILDING TRANSACTIONS $60 18 $50 15 $40 12 $30 9 $20 6 $10 3 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 0 Sales Volume # of Transactions Source: RealTrack.com and Cushman & Wakefield Figure 23. Industrial Building Transactions ($) BRANTFORD INDUSTRIAL BUILDING TRANSACTIONS 2,000,000 $50 1,500,000 $40 1,000,000 $30 $20 500,000 $10 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 $0 Building Size (sf) Price ($psf) Source: RealTrack.com and Cushman & Wakefield Figure 24. Industrial Building Transactions (sf) Industrial Land We reviewed historic sales of serviced industrial land in Brantford from 1997 through 2013, as provided by City staff. The mid-2000s represented the recent peak of land sales activity, both in terms of private sales and sales by the City of Brantford. Excluding 2004, the average volume of land sold by the City has been about 25 acres (10 hectares) annually since 1997. There were no land sales recorded in 2009-2010, which coincides with a general decrease in industrial demand associated with the recession. Brantford OPR Municipal Comprehensive Review 45
Acres BRANTFORD SERVICED INDUSTRIAL LAND SALES 500 450 400 350 300 250 200 150 100 50 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Municipal Private Figure 25. Serviced Industrial Land Sales Source: City of Brantford Land Needs Projection Cushman & Wakefield has utilized recent employment projections prepared by Hemson Consulting Ltd. to assess the forecast demand for employment land by type of employment. The following reflects our analysis of employment by type of job, and considers appropriate benchmark densities to be applied in our land demand projection model. Our analysis is based upon three broad types of employment: Employment Land Employment (ELE), Office Employment (OE), and Population-Related Employment (PRE). These are described as follows: Employment Land Employment: The phrase Employment Land Employment refers to industrial-type jobs, and includes: manufacturing; research and development; warehousing and distribution; and wholesale trade. These jobs are typically located in single storey buildings, with a small front office component that may be multi-storey. According to Hemson, Employment Land Employment represented 54% of all employment in the City of Brantford in 2011. Office Employment: Small-scale office properties may be accommodated in industrial parks on employment lands, often in the form of space within multi-tenant commercial strip properties. Major Office uses are higher density and typically have different requirements, such as transit accessibility, site visibility, adequate parking provision and other considerations that make them non-complimentary to traditional industrial parks. Typical categories of Office employment include the following: Finance, Insurance and Real Estate; Professional, Scientific and Technical Services; Other Business Services (some segments); and Information, Culture and Recreation (some segments). Office functions typically concentrate in downtown areas or established suburban office parks, but developers may also pursue pioneering sites in complementing other existing commercial/retail properties or planned projects. The City of Brantford is not home to a significant office presence. In its projections, Hemson did not denote the number of Office jobs in Brantford as of 2011 subject to revision based upon the National Household Survey results. Brantford OPR Municipal Comprehensive Review 46
Population-Related Employment: The Population-Related Employment category of employment is that which exists in response to a resident population that is not primarily located in employment areas. Commercial, institutional and accessory retail uses and increasingly, community facilities/population-related functions may locate on employment lands. The extent of population-related land uses in employment areas varies among municipalities, and contributes to the mix of land uses and amenities within employment areas. In smaller and midsized communities, often industrial areas are very pure in terms of land uses being segregated, while in larger cities, there may be a blurring of related land uses in employment areas including population-related functions. The range of population-related employment sectors includes the following: Retail Trade; Educational Services; Health Care and Social Assistance; Accommodation and Food Services; and Government (referenced by NAICS codes). These land uses are generally accommodated within existing neighbourhoods and commercial areas, as well as through secondary planning for new residential/commercial areas. According to Hemson, Population-Related Employment represented 44% of total employment in the City of Brantford in 2011. Employment Projection The following exhibit presents the projection of employment growth by employment type, as prepared by Hemson Consulting Ltd. Some observations about this projection are as follows: Employment Land Employment is projected to be the most significant contributor to overall employment growth, with 18,044 jobs to be added during the 2011-2041 period. This represents an increase of 71% from the 2011 employment figure, and represents annual growth of just over 600 jobs in this sector. Population-Related Employment is projected to be the second most significant contributor to employment growth from 2011 to 2041, with 13,411 additional jobs forecast. This represents an increase of 68% from the 2011 employment figure, or growth of nearly 450 jobs annually (on average) during the forecast period. Office Employment is a modest contributor to Brantford s employment base. There is a forecast of 2,520 Office jobs to be added from 2011 through 2041, representing an annual average of about 85 new jobs. TABLE 18. EMPLOYMENT FORECAST YEAR EMPLOYMENT LAND EMPLOYMENT MAJOR OFFICE EMPLOYMENT EMPLOYMENT TYPE POPULATION-RELATED EMPLOYMENT TOTAL EMPLOYMENT 2001 23,567 0 17,231 40,798 2006 24,897 0 19,145 44,043 2011 25,419 0* 19,643 45,062 2016 F 27,649 0* 21,759 49,407 2021 F 30,683 344 24,228 55,255 2026 F 33,555 647 26,290 60,492 2031 F 36,924 1,102 28,537 66,563 2036 F 40,021 1,748 30,414 72,183 2041 F 43,462 2,520 33,054 79,037 Increase 2011-2041 18,044 2,520* 13,411 33,975 *Note: The 2011 and 2016 Major Office figures are to be updated based upon the National Household Survey, when available. Source: Hemson Consulting Ltd. Brantford OPR Municipal Comprehensive Review 47
Jobs % of Total Employment The preceding employment projection serves as the basis for our land demand model. It is also valuable to present some analysis of the changing nature of employment overall in Brantford. The year 2005 represented the most recent peak of industrial-type employment in the Brantford Census Metropolitan Area (CMA which includes Brant County), meaning jobs in the manufacturing and transportation and warehousing sectors. At this time, there were 20,500 jobs in these sectors that typically require industrial-type building facilities. This represented a 31% share of all jobs in the Brantford CMA, while the services-producing sector accounted for a 64% share of the total. Other goods-producing industries such as primary industries, utilities and construction accounted for the balance of overall employment (roughly 5%). The decline in industrial-type employment in the Brantford CMA as in many southern Ontario communities actually preceded the recession of late-2008-early-2009. By 2013, industrial-type employment in the Brantford CMA was 16,700, representing a decline to a 24% share of overall employment from the 2005 peak, whereas services-producing employment had increased to a 70% share of total employment (with other segments accounting for the remaining 6%). From 2005 (the recent peak of industrialtype employment) to 2013, industrial-type employment declined by 10% while services-producing jobs increased by 7%. In terms of overall employment, industrial-type jobs peaked at a 35% share of overall employment in the Brantford EMPLOYMENT CMA in 2000, and BY have INDUSTRY been on a downward BRANTFORD trend for CENSUS over the past METROPOLITAN decade. AREA 60,000 40% 50,000 35% 40,000 30% 30,000 25% 20,000 20% 10,000 15% 0 10% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Industrial-Type Employment Services-Producing Employment Industrial-Type Employment and a Share of Total Employment Source: Statistics Canada Figure 26. Employment by Industry (Brantford Census Metropolitan Area) Employment Densities Employment Land Employment City of Brantford staff provided employment data from its industrial building directory. There were 220 records for which the size of the building and the number of employees was provided (for buildings in excess of 5,000 sf, or 465 Brantford OPR Municipal Comprehensive Review 48
Square Feet per Employee M 2 ). This inventory of buildings totalled almost 12.5 million sf (1.15 million M 2 ). Over 11,000 employees were included in this sample. An analysis of this data indicated that the weighted average square footage per employee was just over 1,100 sf (just over 100 M 2 per employee), while the median figure was 1,150 sf per employee (107 M 2 ). When this space per employee is translated into a land requirement, based on a benchmark industrial site coverage of 35%, it indicates an employment density of approximately 13.2 jobs per acre (32.5 jobs per hectare) when considering the median floor space per employee, and an employment density of approximately 13.8 jobs per acre (34.0 jobs per hectare) when considering the weighted average square footage per employee. When the simple average of the employment data is considered, this results INDUSTRIAL in a density BUILDING of 9.3 jobs EMPLOYMENT per acre (23.0 jobs DENSITY per hectare), BRANTFORD at a site coverage of 35%. 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 0 50,000 100,000 150,000 200,000 250,000 300,000 Note: For scale purposes, four large buildings were removed from the exhibit above: 1,400,000 sf 1,000 square feet per employee 775,000 sf 1,890 square feet per employee 470,000 sf 9,400 square feet per employee 400,000 sf 1,194 square feet per employee Building Size (sf) Source: City of Brantford and Cushman & Wakefield Figure 27. Industrial Building Employment Density (Brantford) In addition to the preceding analysis, benchmarks from various other municipalities that have conducted employment surveys provide guidance as to typical industrial-type employment densities. Cushman & Wakefield analyzed its inventory of industrial buildings in the City of Mississauga, along with the City s 2012 Employment Survey. The industrial space inventory of 170.3 million sf translates to approximately 815 sf per Employment Land Employment job (76 M 2 per employee). Using a benchmark site coverage of 35%, this translates to an Employment Land Employment density of 18.7 jobs per acre (46.3 jobs per hectare). This is somewhat higher than benchmark Employment Land Employment densities that Cushman & Wakefield has studied in other major metropolitan markets such as Brampton and Calgary for which there is a local employment survey to draw upon. A rate of approximately 46 Employment Land Employment jobs per hectare is within the range identified by Hemson in its 2008 Employment Land Review Study for various Greater Toronto Area municipalities. At the upper end of the range, the Town of Brantford OPR Municipal Comprehensive Review 49
Employees per Hectare Richmond Hill had a figure of 65 employees per net hectare, and the figure was 60 for the City of Markham. At the other end of the continuum, the Town of Caledon and City of Vaughan each had an Employment Land Employment density of 35 jobs per hectare, while the figure was 30 for the Town of Whitby. We would anticipate a decline in the overall Employment Land Employment density in recent years, with the proliferation of low employment intensity warehouse and distribution facilities being added across the Greater Toronto Area. Also, given the relatively lower cost of industrial land in Brantford relative to sites in the Greater Toronto Area, it is likely that the employment density in Brantford is at the lower end of the range suggested above. The preceding is based upon the total inventory of industrial space in these markets. It is also worthwhile to consider recent development activity, and whether there is any difference in employment density being achieved. Cushman & Wakefield examined 113 industrial buildings completed across the City of Mississauga since 2000. For 81 of these, we were able to identify the count of employees in the 2012 Mississauga Employment Survey. Others had vacant space within the building, making an examination of employment density impossible. For 32 of these buildings, Cushman & Wakefield has the site area in its industrial building database. For this subset of the data, the average employment density translated to 33 employees per hectare. For the full sample, we assumed a site coverage of 35% for all buildings, which produced an average employment density of 37 employees per hectare. Notably, the trendline on the exhibit below indicates the decline in employment density as building size increases. We would anticipate a similar INDUSTRIAL trend for recently BUILDING constructed EMPLOYMENT industrial facilities DENSITY in Brantford. MISSISSAUGA 140 120 100 80 60 40 20 0 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 Figure 28. Industrial Building Employment Density (Mississauga) Building Size (sf) Source: City of Mississauga and Cushman & Wakefield In our opinion, a figure of 30 Employment Land Employment jobs per net hectare is appropriate for the City of Brantford for employment land demand modeling purposes, in our Base Case Scenario. We project that 100% of future Employment Land Employment jobs will be situated on employment lands. We note that the City s 2006 Growth Management Strategy (EarthTech and MHBC Planning Ltd.) cites a figure of 22 Employment Land Employment jobs per net hectare, while the City s 2009 Development Charges Background Study (Hemson Consulting Ltd.) utilizes a figure of almost 38 Employment Land Employment jobs per net hectare (as Brantford OPR Municipal Comprehensive Review 50
derived when Cushman & Wakefield s site coverage assumption of 35% is applied). The follow-up Memorandum that is the City s 2009 Development Charges Background Study Update (Hemson Consulting Ltd.) acknowledges that the figure of 92 M 2 per Employment Land Employment employee used (which translates to in on the mid- to high-side when compared to other municipalities in Southern Ontario. Office Employment In recent years, there has been a trend towards higher office employment densities. There are various factors contributing to this, such as: more efficient office building design allowing greater utilization of floor plates; higher occupancy costs (net rental rates, operating costs and taxes) contributing to reduced space allocation on a per employee basis by firms; and, greater use of technology, reducing paper filing and storage requirements; and, telecommuting and desk sharing among co-workers. Office employment does not constitute a significant share of the job market in Brantford. Since there is only a modest forecast of office job growth, we have excluded this component of the projection from our land needs assessment. Given the higher employment densities associated with office space (compared with industrial and population-related jobs), the future office growth can readily be accommodated on existing, planned commercial sites, or within mixed-use developments or as a component of the land use mix within employment areas. Population-Related Employment The types of population-related jobs and the extent to which they are situated within employment areas vary among municipalities. There are certain Population-related Employment-type jobs that are incompatible with industrial uses such as hospitals and nursing homes, for example while other types may be appropriately sited within industrial parks such as ancillary retail and business support services, and automobile sales and service. Hemson Consulting Ltd. has identified that approximately 44% of all jobs in Brantford (as at 2011) are populationrelated jobs. Our visits to the city s industrial parks revealed that while there was commercial and retail services uses along the edges of these areas on major arterials, the interior streets were predominantly traditional industrial-type buildings, with a modest front office component and rear manufacturing, assembly and warehousing spaces. In a city the size of Brantford, there is less pressure for competing land uses, compared to markets with larger land value disparities for industrial and commercial lands, and a shortage of prime development lands in general. The employment density benchmark that applies to population-related employment functions varies depending on the land use. Small office-type functions (such as real estate offices, accounting, financial services) and medical offices (doctors, dentists) that may locate in small professional business spaces in commercial units within employment areas have a higher employment density compared to ancillary retail operations, which have a higher proportion of showroom/merchandise space, as well as inventory storage requirements. We have reviewed precedent employment land work in the Cities of Markham and Mississauga to evaluate the appropriate range of densities that are applicable to Brantford s population-related employment. We consider a range of 70 to 90 jobs per net hectare to be an appropriate benchmark for Population-related Employment density for the types of jobs that would locate within Brantford s employment areas, and have Brantford OPR Municipal Comprehensive Review 51
selected 80 jobs per net hectare for modeling purposes. In our Base Case Scenario, we project that 10% of future Population-related Employment jobs will be situated on employment lands in Brantford. Site Coverage An analysis of the site coverage of the existing industrial building stock in Brantford indicates an average of 28%. This is considered relatively low compared to modern development norms, and is likely due to historically low land costs in this market. For the purposes of a land demand analysis, it is necessary to examine more modern development to gain insight into construction trends, including site coverage. We have analyzed the site coverage of manufacturing buildings completed during the past decade in Brantford. The building data was drawn from the City s building permit records. The land area data was obtained from GeoWarehouse, as well as the City of Brantford. GeoWarehouse is a product offered by Teranet; Teranet built and manages Ontario's Electronic Land Registration System. The property addresses indicated in the building permit data do not always correspond with an existing municipal address. In some cases, it is not possible to identify the site area of a building, due to uncertain address, or the fact that the site is shared with another building. We were able to identify the site area for 28 industrial buildings completed with a building area of over 20,000 sf (2,320 M 2 ). Table 19 presents the analysis of site coverage for the 28 properties for which we could identify the land area; 14 of the 28 properties fall within a site coverage range of 25% to 45%. Notably, the Ferrero Canada property has a low site coverage due to extensive undeveloped land to the east, with frontage on Highway 403, which is included with the same land parcel. The functional site coverage of the existing building space is actually within the norms for modern industrial development, and is efficiently laid out on the lands. The property at 143 Adams Boulevard has extensive outside storage on the site, which contributes to the low building coverage (17%). The property at 490 Elgin Street is an irregularly shaped parcel (triangular), which contributes to its low site coverage (19%). 300 Henry Street is impacted by natural features on the rear of the property appears to be a watercourse, from aerial photos we viewed and this impacts the achievable site coverage (33%). Apart from certain exceptions, including those noted above, the majority of the recently developed industrial properties have a site coverage in the range of +/- 35%, which is typical of efficient, modern industrial developments. As a result, we have utilized this figure as a benchmark for our land demand projections. Importantly, the figure of 35% site coverage must been seen as an ultimate build-out benchmark. Our projections allow for the initial building size to be less than 35% site coverage, and for the property to intensify as the user or landlord expands the building in the future (within the forecast horizon). It is often the case that a user will acquire a development site and build a smaller building than could be physically accommodated, in order to permit future expansion when warranted by business conditions. Brantford OPR Municipal Comprehensive Review 52
TABLE 19. RECENT INDUSTRIAL BUILDING CONSTRUCTION ACTIVITY YEAR ADDRESS BUILDING SIZE (SF) BUILDING SIZE (M2) LAND AREA (AC) LAND AREA (HA) SITE COVERAGE (%) 2005-2012 1 Ferrero Boulevard 1,529,000 142,000 167.3 67.7 21% 2004 59 Fen Ridge Drive 775,000 72,000 69.8 28.2 26% 2005 99 Savannah Oaks Drive 527,900 49,000 27.0 10.9 45% 2004 35 Bosworth Court 243,000 22,600 13.1 5.3 42% 2005 46 Bosworth Court 230,000 21,400 12.6 5.1 42% 2004 470 Hardy Road 146,800 13,600 14.9 6.0 23% 2006 490 Elgin Street 106,100 9,900 12.8 5.2 19% 2011 38 Bury Court 112,000 10,400 5.5 2.2 47% 2006 20 Roy Boulevard 87,500 8,100 5.8 2.4 34% 2005 90 Morton Avenue East 82,400 7,700 4.2 1.7 45% 2006 195 Savannah Oaks Drive 66,200 6,200 5.0 2.0 30% 2009 21 Tallgrass Court 65,600 6,100 3.8 1.5 40% 2006 131 Savannah Oaks Drive 49,400 4,600 7.9 3.2 14% 2006 143 Lynden Road 47,400 4,400 2.8 1.1 39% 2007 20 Roy Boulevard 42,500 4,000 5.8 2.4 17% 2011 48 Bury Court 42,000 3,900 3.2 1.3 30% 2012 33 Kippax Court 40,000 3,700 13.4 5.4 7% 2006 300 Henry Street 33,200 3,100 3.8 1.5 20% 2004 143 Adams Blvd 38,000 3,500 5.2 2.1 17% 2005 601 Park Road North 36,100 3,400 2.2 0.9 37% 2006 170 Savannah Oaks Drive 34,500 3,200 2.2 0.9 36% 2004 46 Zatonski Avenue 33,400 3,100 2.5 1.0 31% 2005 37 Easton Road 31,500 2,900 2.6 1.1 28% 2006 18 Zatonski Drive 28,000 2,600 1.3 0.5 49% 2006 35 Bury Court 27,500 2,500 1.2 0.5 51% 2007 65 Bury Court 27,000 2,500 3.7 1.5 17% 2007 47 Bury Court 21,500 2,000 2.5 1 19% 2006 59 Bury Court 20,000 1,900 2.2 0.9 21% Source: City of Brantford Brantford OPR Municipal Comprehensive Review 53
Figure 29. Site Coverage for New Manufacturing Buildings in Brantford Long-Term Vacancy Factor A portion of the remaining vacant employment lands across the city will remain vacant over the long term for a variety of reasons. These may include: ownership may be controlled by an adjacent business that is using the land for outside storage, additional parking, or preserving the site for a future expansion, if ever warranted; site configuration orientation of the site does not allow for efficient development, due to easements, setbacks, road access, visibility, etc.; and, contamination prior land use or nearby land use has caused soils to be contaminated, preventing the site from economically being developed. The City of Brantford has significant remaining vacant employment lands in the Northwest Industrial Area, as well as parcels in the Braneida Industrial Area (South and North of the 403). The four largest parcels in the Northwest Industrial Area account for 59% of the total net vacant land area in the city. Of the remaining 24 parcels, 9 are less than 5 net acres (2 hectares) in size. At a benchmark 35% site coverage, a 5 acre (2 hectare) site is capable of accommodating approximately 76,000 sf (7,080 M 2 ) of single-storey building space. Cushman & Wakefield has examined industrial buildings added across the Greater Toronto Area since 2000. Despite some misconception of the market being dominated by new large warehouse and distribution facilities, almost one-quarter of all new industrial construction has occurred on land parcels less than 2 acres in size. Cushman & Wakefield has analyzed 536 industrial properties completed since 2000, which total 71.5 million sf. Applying a benchmark site coverage of 35%, this means that 117 buildings (22% share of the total) would require less than 2 acres of land. Brantford OPR Municipal Comprehensive Review 54