HOW TO KICK-START A CITY’S CBD
27 SEP 2017 PROPERTY AUSTRALIA
How do you breathe life into a tired CBD and create new high-value industries? Steve Maras thinks Adelaide’s approach to revitalisation could teach other Australian cities a thing or two.
Maras (pictured, below), the group managing director and chief executive officer of privately-owned Maras Group, is the Property Council’s division president in South Australia and a member of its national Board.
He says there are “lots of things happening in South Australia that aren’t getting the airtime they deserve”.
The loss of the state’s manufacturing base has provided an opportunity to create a high-value innovation economy, Maras says. And that means building a vibrant CBD where people want to live, work and play.
“We’ve seen a dramatic turnaround in Adelaide’s fortunes over the last five years or so, and it’s been led by people wanting to change what happens in our city centre.”
Maras is the immediate past chair of Renew Adelaide, a not-for-profit that connects creative enterprises with property owners looking to activate their buildings. Renew Adelaide has “changed the way building owners and landlords look at vacant spaces,” Maras says.
“In five years, we’ve driven more than 130 projects throughout Adelaide’s CBD, rejuvenating vacant stock – shopfronts, offices and basements – and supporting creative industries that would never have got a look in.”
Maras Group owns a significant portion of Adelaide’s East End city district, including Rundle Street East, a collection of 18 buildings along Adelaide’s iconic shopping and dining strip.
Maras says the tenant profile has changed dramatically over the last five years. In fact, it’s “chalk and cheese”. “We offer much smaller, quirkier spaces than we once did, and have focused on building the laneway culture with small bars and eateries. This was just not on our radar a decade ago.”
Renew Adelaide has kept creative talent in Adelaide, created new business models and helped to revitalise urban areas, he adds.
He points to the co-working phenomenon, which has grown “ten-fold” in recent years, as an example of how the development industry can support new business models.
Co-working is now an established part of the business ecosystem in Adelaide, with 28 co-working sites scattered around the city catering to a growing mix of entrepreneurs, creatives, professionals and exporters.
“We have the highest percentage of co-working space per capita in Asia,” he says, adding that co-working is delivering economic benefit by keeping people in Adelaide, and fostering new business opportunities as people share their skills and ideas in a professional environment.
The night-time economy is also growing.
“If you look back a decade, we had pubs, nightclubs and restaurants, but no small bars. Renew Adelaide worked closely with Renewal SA to change the mindset and bring in the small venue license, which allows small bars to cater to up to 120 people.
“In less than four years, we now have an incredible 81 small bars operating in the city of Adelaide. This has completely renewed the energy in the city. It’s given young entrepreneurs a kick start. And now, when people come to Adelaide, they say doing the small bar hop is one of the highlights.”
Maras says other cities are looking at Adelaide’s example.
“Renew Adelaide has been a great catalyst for changing mindsets, activity and entrepreneurship,” he adds.
“Because we have lost our manufacturing industry, we’ve had to change our focus. Young adults that would once have gone into manufacturing must now look at other avenues.”
Maras points to Tonsley, the old Mitsubishi site down south, which he calls “one of Adelaide’s best-kept secrets”.
Tonsley is Australia’s first “innovation district”, bringing together creative start-ups and global giants under the one roof. The Flinders University’s School of Computer Science, Engineering and Mathematics, Medical Device Research Institute and the Centre for Nanoscale Science and Technology are all located at Tonsley. TAFE SA – South Australia’s largest provider of vocational education and training – is also located on site.
South Australia’s biomedical industry is also beginning to boom. The New Royal Adelaide Hospital has just opened its doors, the South Australian Health and Medical Research Institute (SAHMRI) is attracting some of the best researchers in the world, and a SAHMRI II is on the cards.
“The architectural features of SAHMRI are truly iconic, but it’s what goes on inside this building that is exceptional.” More than 600 of the world’s top researchers are working on cures for everything from brain cancer to Parkinson’s disease.
The location of these buildings is an enabler in themselves.
“There is no boulevard in the world like North Terrace,” Maras says, adding that it takes in SAHMRI, the convention centre, hospital, casino, the state’s library, museum and art gallery, Government House, Parliament House, the University of Adelaide, UniSA and the Adelaide Botanic Gardens.
“Where else can you find so many cultural, education and health institutions on the one street?
Removing the development handbrake
Maras is determined to tackle the NIMBY brigade who have an “ingrained negativity to any progress”.
“Unless there is growth and employment, we will lose our youth,” he says.
While the latest census did show a decline in population, Maras is quick to point out that Adelaide is beginning to stem the tide of young people leaving the city. “We find that people leave for a while when they are young, and then return when they are ready to start families.”
Maras is optimistic about South Australia’s future. “While our growth rate might not be as good as, say, Sydney or Melbourne, I see it stabilising,” he says.
Maras is confident the “handbrake” is slowly being taken off development.
“Over the last three years, we have worked with the government to overhaul our planning regime, which was archaic – full of red tape and complexities that made it almost impossible to navigate unless you were an experienced property player.
“Changes to planning reform make it simpler for new developers to enter the market – and that’s important,” he says.
Stamp duty reform has been another driver of change, certainly in the apartment space, he says.
“From 1 July 2018, no commercial property transaction will incur stamp duty. This will encourage South Australian property investors even more so, but also those outside the state. Certainly, interstate investors will start to look further afield as South Australia becomes a much more attractive investment proposition,” he says.
Maras says the state’s biggest impediment to growth is its land tax regime. “We are the worst taxed state when it comes to land tax and has been so for several years. We pay 50 percent more than the next worst state.
“We have all these other great things happening, led by the private sector, and we’ve got the government on board with stamp duty abolition and planning reform. Land tax remains the key sticking point.”
Catering to the future
Almost 35,000 students were enrolled in tertiary institutions in South Australia last year, growing by 6.7 percent on the previous year.
This expanding population of students is adding an extra layer of vibrancy to the city, Maras says.
“Urbanest is currently building two apartment towers with 700 beds directly opposite the University of Adelaide. Centurion Corporation is building an 18-storey tower with 280 beds in the East End. And at least two more are coming.
“We are starting to cater to the future,” he says.
“Adelaide has turned a corner. This is an important message – and I don’t think the rest of Australia has heard it,” he says.
Undoubtedly, Adelaide has lessons to share with other cities looking to revitalise their tired CBDs.
“We are seeing some genuine confidence and excitement. People are trialling new things, and the government is taking steps we never thought possible. For the first time, we are seeing an evolution in development in the centre of Adelaide. All of this comes together to make Adelaide a really great place to live, visit, work and invest.”