Urban Economics and Infrastructure Funding | 15241

Value Creation Potential in Kingsford Station Precinct

Ana Ramdani Sari | 12498198

Introduction
In 2012, The CBD South East Light Rail (CSELR) project was announced and had become one of the
biggest major infrastructure projects in New South Wales. The project will generate a new corridor
that runs from CBD to Randwick and Kingsford. It also aims to make wider economic benefits and to
create more jobs, especially for the future users of the CSELR. Moreover, according to CSELR
Business Case Summary Report (2013), 64% of the source of demand comes from the existing public
transport customers.

The project is predicted to bring in more opportunities and accessibility to jobs, and to unlock
development potential along the corridor as the effort to achieve 30 minutes city. As many other
transportation projects, it supports productive growth and improving the quality of life, as well as
creating uplift value along the line. It includes the future Kingsford Station precinct as the transport
interchange of the new Light Rail. To maximize the value creation of Kingsford Station precinct, there
are several redevelopment scenarios to be carried out.

Accessibility Impact on Value Creation and Growth

The location is an important factor in creating land-value as the price adjust to achieve locational
equilibrium (O’Sullivan, 2012). The more accessible it is to employment, which in this case is CBD,
the more valuable the land is. Transport makes the land more valuable and has more growth
potential as it makes the location more accessible. It also reduces externalities and the marginal cost
of pollution, congestion and time travel that is generated from the automobile as it allows people to
commute using mass transport in more effective and efficient ways. Not only it is beneficial for the
costumers of the future CSELR, but also for the city structure as it is more exposed to the labor
market and for the economic activity in the area as it brings agglomeration benefits and productivity.

Areas within walking catchment of the

transport nodes are highly valued, and it
increased willingness to pay for the land
according to proximity, especially for the
area within 400m pedestrian catchment
(McIntosh and Trubka, 2016). Epping to
Chatswood, for example, has a significant
increase in land value up to 70% within the
400m catchment after the commencement
of the operation in 2009. Therefore,
Kingsford Station Precinct as the future
transport interchange of CSELR possesses a
high value and potential to be unlocked to Figure 1 Kingsford Station Catchment
maximize its use. source : McIntosh, 2017
According to Transit and Urban Renewal
Value Creation Report (McIntosh and Trubka, 2016), mixed use zoning with high density has the
highest proportional benefit after CBD zoned land and significant value can be created if the land is
rezoned to the highest and the best value. However, albeit being the future transport interchange

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location, Kingsford Station Precinct is currently not in its maximum use. Based on the Randwick City
Council LEP, the precinct is currently zoned as a local centre, medium and low-density residential
(see Figure 2). The FSR within the area are mostly 3, 0.5, and 0.9 (see Figure 3) with maximum height
building of 24m, 9.5m, and 12m (see figure 4).

Figure 2 Kingsford Station Land Zoning Figure 3 Kingsford Station FSR

source: http://www.legislation.nsw.gov.au source: http://www.legislation.nsw.gov.au

Figure 4 Kingsford Station Building Height

source: http://www.legislation.nsw.gov.au

As seen on the figures above, the current planning controls do not encourage the growth into its
maximum capacity. Moreover, the current use of buildings along the precinct is mostly
underutilized, such as the car park on the northern boundary of the interchange and the automobile
workshop on the other side. Those facilities require a lot of space with minimum activity, and
considering the potential of the site, the current land use does not go well with the aim to maximize
the land. In addition, the streetscape, urban form around the area and pedestrian path are
underutilized and uncomfortable for people to walk around the precinct. It could affect the
‘willingness to pay’ for the land.

Redevelopment Scenarios
As the site has the potential for urban renewal and value creation, there are several redevelopment
scenarios that can be implemented on the Kingsford Station precinct and surrounding area.
According to Transit and Urban Renewal Value Creation Report (McIntosh and Trubka, 2016), there
is three phase of value creation process in transportation infrastructure investment (see figure 5).

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Land Use

As the project improves accessibility to employment,

the land becomes more desirable and increases WTP
and land markets. However, without suitable land
use zoning to support the growth, it can become a
constraint to the development itself.

Rezoning the land use of the precinct catchment is

Figure 6 Land market value creation process.
source: McIntosh and Trubka, 2016
one of the steps to unlock the potential. As the land
within the catchment is not under heritage
conservation area (Randwick LEP, 2013) and save to
be rezoned, the zoning can be improved to
accommodate growth. Rezoning the land within the
400m catchment as B4 Mix Use residential-
commercial will generate the highest and the best
use of the land. It is possible as well to rezone the
further catchment of the Station as a medium to
high-density residential. It is because transport
project has more impact to Mix Use and Residential
zone as the willingness to pay increases along with
the operation of the project.

The residential use of the precinct is the exchange of the accessibility that the site provides so that it
would be more appealing to the buyers or investors. Moreover, the dominant age group in Kingsford
is 20-34 years old, which indicates the young working population in the area. It can be an indication
of the future demand for young professionals to reside around the precinct.

The commercial retail use of the site can improve the local economy as it will generate
agglomeration economies to create thriving community and more jobs for the people.
Agglomeration economies increase productivity through input sharing, labor pooling and knowledge
spill-overs (O’Sullivan, 2012), thus create more economic benefits for the site. As the site is located
close to University of New South Wales, it is possible to generate education-focused businesses
around the precinct to fulfill the demands from university students or university related activities.
Businesses to support young professionals is a good opportunity to create agglomeration economies
for the site as well.

Rezoning Land Use to residential and mix-use has been done to create value in transit urban renewal
development in various projects. In Dulwich Hill Extension to Inner West LRT project, Mixed use
zoning is reported to have the highest value of 20,9% (with the residential zone as the base)
followed by residential and businesses (McIntosh and Trubka, 2016). In Epping to Chatswood Rail
project, it is reported that residential zone to be valued the highest, followed by Business and Mix
Use (McIntosh and Trubka, 2016). In other projects such as Parramatta to Liverpool BRT and North
West T-Way, mixed use zone generates the highest value and increases over time compared to
residential and business (McIntosh and Trubka, 2016).

The value of the projects may vary, however, generally rezoning the precinct catchment to Mixed-
use and residential makes the best use of land and creates higher value.

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Density

When the land value impacts to improving transit accessibility,

rezoning land to its highest and best use and increasing FSR to
allow greater densities are considered in combination, the value
growth potential is substantial and forms the basis for value
capture strategies (McIntosh and Trubka, 2016). Therefore,
increasing density is the integrated solution to increase land
value around the precinct. Based on the current land use zoning,
FSR, building height and usage of the building, it is clear that the
precinct catchment is mostly low to medium density.

The project will create more demand as it increases the

willingness to pay for people to reside or to open businesses. To
maximize the site value, the density has to be increased. Even
though the LEP of building height allows two to six story
building, the FSR is still low to allow high density. Therefore, the
solution is to increase FSR, especially for the site closer to the
station precinct and to increase the building height as well.

In other projects, the increased FSR and building height; and

shift into high-density development also has been done to
create best and the highest value of the land. In Light Rail Capital
Metro project, the zoning controls accommodate residential for
45,000 people along the corridors, the density surrounding the
transport nodes is higher than in another area as seen in figure
7. Meanwhile, in Gold Coast Rapid Transit, the zoning provides
mostly high-density residential along the route and more mixed
density further away from the rail to provide diversity.

In other transport nodes of the CSELR project, the issue of

Figure 7 Population Density on density shift has been brought up. In Kensington, The State
Capital Metro Corridor Government has called for a review to amend the LEP to allow
source: ACT Agency high rise building and high-density development. The
development proposal for high-rise building also has been
carried out in Bunnerong Road to fulfill the future rental demand as the result of the light rail
extension.

Other than increase FSR and building height, the use of land is also important to ensure that the land
value can be maximized to its best use. Currently, Randwick Council proposes the making of multi-
storey car-park close to the site. However, while it may serve people’s necessity in parking, the land
itself would not be able to be uplifted efficiently. Moreover, aside from affecting the density, it
would cause externalities that may occur in the future such as congestion and pollution as it would
encourage people to use private vehicles before changing the transport mode.

Streetscape Improvement

Aside from the land use and density, a good urban form and streetscape are important to increase
the willingness to pay and to increase the value of land. Assuming that the Kingsford Station
catchment will be zoned as residential and mixed-use, people who use the light rail would need to

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walk along the pedestrian path to and from the station. It is important to create a safe, comfortable,
and visually appealing so it would encourage people to walk and to use the light rail.

Currently, the area around Kingsford Station Precinct is not provided with adequate and safe
pedestrian path and streetscape. If the density and the land use would be improved, the streetscape
and pedestrian path also should be properly designed to support the activities around the area.

The improvement of urban design and urban form in transport-urban renewal project has been
integrated into the various project. In Sydenham to Bankstown Corridor Strategy, urban design is
one of the key considerations of the study. In GCRT Strategy, the strategy also considers the urban
design, especially for a pedestrian to make walking more attractive.

In fact, the CSELR corridor strategy also includes the improvement of urban form. George Street, for
instance, will be improved as a pedestrian path to promote walking for the CSELR users.
Improvement of urban form also can keep the balance of density and the character of the area. The
issue of increase FSR and building height in Kensington, for example, has raised the concern of the
community in the overly dense development and too tall building, which possibly will cause
‘unwelcoming’ feeling for the pedestrian. Proper urban design and urban form will balance them out
to create a better development

Conclusion
In summary, land-use rezoning and increase density allow more intensive use of the land. Therefore
it brings more benefits in terms of economic activity. In this case, the suitable rezoning for Kingsford
Station catchment is mixed-use with high to medium density. Businesses, especially in providing
necessities for residents, will attract more people, thus bid the land value. In addition, a good urban
form will create balanced land-use and the character of the area.

References

Capital Metro Agency: n.d. Capital Metro Business Case. Sydney: ACT Government.

Department of Planning and Environment: 2015. Sydenham to Bankstown Urban Renewal Corridor
Strategy. Sydney: Department of Planning and Environment.

Gold Coast City Council: 2011. Gold Coast Rapid Transit Corridor Study. Gold Coast: Gold Coast City
Council.

Hogg, M : 2016. Skyscrapers set to transform Anzac Pde corridor. Daily Telegrapgh. [online] Available
at: http://www.dailytelegraph.com.au/newslocal/southern-courier/harry-triguboff-sees-light-rail-
extension-in-his-3-billion-vision-from-above-at-pagewood/news-
story/828fcfd347e2ae7ce0ae4007eb1d68fc [Accessed 18 May 2017].

McIntosh, J. and Trubka, R: 2016. Hedonic Price Modelling Assessment of Sydney's Key Transit
Oriented Urban Renewal Investments Report. Sydney: LUTI Consulting.

O'Sullivan, A: 2012. Urban Economics. 8th ed. Singapore: McGraw-Hill Education.

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Seiler, M : 2016. Harry Triguboff sees light rail extension in his $3 billion vision from above at
Pagewood. Daily Telegraph. [online] Available at:
http://www.dailytelegraph.com.au/newslocal/southern-courier/harry-triguboff-sees-light-rail-
extension-in-his-3-billion-vision-from-above-at-pagewood/news-
story/828fcfd347e2ae7ce0ae4007eb1d68fc [Accessed 18 May 2017].

Randwick Local Environmental Plan 2013

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