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Location

Question:

Discuss about the Retail Property Analysis Silverwater.

Property economic analysis of a location allows detailed understanding in regards to a particular locality. Silverwater is located in western Sydney in New South Wales, Australia in the suburbs. It is situated almost 20 kilometers away from Sydney on southern banks of Parramatta River (Property, Retrieved on 15th November 2017). The place provides a good location to multiple medium and small businesses with its low rental, lease rates the location provides immense space for warehouse facility. There are multiple number of companies that are operating in the place for over 50 years due to its connectivity to central Sydney location. The location was developed primarily to provide for medium and heavy industrial areas. It mainly caters to industrial locations with a few residential areas (Baum, 2008). Red Yard primarily houses a number of restaurants and commercial complexes. The scope of the current study analyses economics related to the location in retail property segment of Silverwater. It also encompasses its current analysis in Property Clock and further depiction as to where it is expected to reach in future.

Silverwater offers steady connectivity to Sydney which offers immense opportunity for growth and developments (Ashton, 2010). City of Paramatta Council has taken UrbanGrowth NSW development with state and local government agencies. The development of Parramatta Road Corridor Strategy have further led to development of Retail and Commercial Market Demands. The Council’s strategy planning has established long-term vision along with planning framework that incorporates transport, infrastructure, economic measures, public domain and various other measures. With such measures there has been tremendous setting up of Retail and Commercial Market Demand Study led to demand of quantum of retail along with commercial floor space (Chung, 2016). Developments in the area has been planned identifying population growth in population of Sydney and changing economic structures along with sustainable methods. There are ways devised ways and means by which existing infrastructure to increase retail segment development. Renewal of existing urban areas for increasing greater retail space for service or transportation purposes. Mostly the area includes small retail stores of commercial holding with absence of major retail brands in the area (Davidson, 2012). Majority of retail properties across Silverware are available on leases which varies depending on specific areas.

Analysis of macro factors in the area reflects that political influence on the area is impacted by Council from City of Paramatta (Gumtree, Retrieved on 15th November 2017). Sydney businesses have been impacted by means of changing dollar, competition from overseas market, changing trends of consumers due to globalisation and increased competition from overseas market. There has been higher input costs in the industry as compared to neighboring markets hence due to rising cost pressures many businesses are seeking for productivity gains leveraging (Tranter, 2099). There are a multiple number of companies who have offshored their production units in view of rising costs from products especially  in automotive and furniture sector.

Connectivity and Development Opportunities

The Council takes major decisions and applies bureaucratic control for development and growth related to the area. There is road connectivity and other railway access that is being developed such that the area can prosper and can lead to further investment opportunities in the future (Zhou, 2016). Economic determinant of the area reflects that there remains high scopes for development with presence of a number of mining companies along with location of several other large companies. The location is more or less economically independent that allows for further prospects of development. Social factors like demographic and other cultural trends in the area are relatively low with low levels of population. There is a limited number of people residing in the area with very little jobs prospects to work in companies located in the region (Symes, 2007). Social investments in the area is relatively less with schools and hospitals located at further vicinity. Legal factors within the area provides that all its jurisdictions falls under the city of Parramatta. Environmental standards placed within the locality are however low as against to other localities. As there is a high level of environmental pollution existing at the location with several factories and warehouse facilities and travel related infrastructure present (Baum, 2008).

The location is extremely well suited and can cater to large number of large retailers that can act as drivers to growth and development of the region. Large format retailing has begun in recent year period and includes bulky goods along with retail showroom usage. Silverwater acts as a warehouse facility for many companies it can make use of its retail space and include large format retailing to include accessories, automotive arts, camping outdoors, repairs and services, pet supplies, electric light fittings, furniture, bedding and so on (auspost.com.au, Retrieved on 16th November 2017). Such large format retailing stores are absent in nearby areas and the location can act as a hub providing space and adding to the facility for the same.

The location of Silverwater is such that it provides high connectivity to various locations especially to Sydney’s central business district. Roadways, bus services, connect the location, however there is still no accessibility to the place by means of railway networks (Render, 2014). It was only in May 2016 that Silverwater became City of Paramatta’s local government area from Auburn City Council. Historically all developments and growth I n the city had been attributed to Auburn Council ever since 1906. Earlier inhabitants of the area includes Wangal clan of the Eora or Tharawal culture. The area had European settlements that dates back to 1797 ever since Captain Henry Waterhouse and Lieutenant John Shortland of the Sirius received the land. Post such period the land was granted to John Blaxland and Greogory Blaxland (domain.com.au, Retrieved on 15th November 2015). They started with agricultural enterprise, salt making factory along with breeding cattle, which later led to setting up of manufacturing of tweed and blankets. Silverwater is also often referred to as North Auburn due to its close proximity to Auburn North Public School. In the past it primarily acted as a land for use of persons who held them but recently it has flourished to include industrial areas with parks, institutions and residential properties as well (Scholz, 2013). It comprises of a small population of 5,043 with various business factories being set-up there. Landmarks in the area are Silverwater Correctional Complex, Silverwater Baths, Silverwater Bridge and Silverwater Fire Station. Silverwater has come to become a major retail property space allowing for immense developments and prospects in the future. Prices in the area are affordable in regards to rent, leases as well as purchases. Markets in the area are not yet saturated which provides immense capabilities for further expansion. Investors can take advantage of the current situation prevailing at the location and develop several properties for future sale in the locality (Council, 2011). It can be used to attract several companies from major city locations to this destination with building up of roadways connectivity in the area. The area can provide comparative benefits of low prices and connectivity that can make it a major attraction for retail spaces for large as well as smaller companies. Thus, the future trend of the market looks attractive as against its present and past. It can cater to becoming a retail hub in near future with further developments.

Macro Factors and Impacts on Retail

Overall economic climate in Australia had been fluctuating in recent past (Brown, 2009). Globally economic markets had been on a constant downturn with various sectors of the economy suffering highly. In Australia various places property markets have rallied in recent past and reached almost its peak levels. Some researchers argue that investors due to low rates of interests in various markets have been investing in Australian property markets especially retail spaces. With large number of immigrants coming into the country from various other locations there is need for retail spaces in suburbs especially where these people can meet the daily necessities (Tice, 2015). Such dispositions have been able to attract tremendous interests from global investors. With development of road infrastructure in the region, it will allow aligning with national industries of opportunities or future growth with locational factors that can affect business growth as well as growth of employment. Retail involves an evolving fast moving consumer sector that is driven with technology, consumer tastes, social, demographic and other factors. Retail Floor space  has increased in Australia from 1.5sqm per capita in 1985 to 2.3sqm per capita at present. This sector depicts an annual growth rate of 1.5% at an average (Obeng-Odoom, 2016). Such rise in retail floor spaces has been affected by real increase in income levels. With Silverwater having continuous increase in spending income levels, retail industry has evolved in the region and is expected to further grow with increasing in immigration capabilities. Rising diversity in retail formats has had a growing affluence that population of Silverwater has experienced. There have been development of shopping centers, supermarkets, homemaker centers, outlet centers and other store formats that has led to rise in convenience. Online shopping has also evolved in the recent period with consumer selecting products and having them delivered at their doorsteps (Vejdean, 2015).


Interest rates in the economy are constantly dropping and there are expectations that provides that it will drop further in the future. With fluctuating and lowered rates of interests there can be high amounts of possibility that investors will look for avenues other than banks and depository papers or bonds to park their funds into. Silverwater forms a part of ambitious prospects for many investors and with Parramatta roadways further developing it can attract large pool of funds. Inflation rates on the other hand had been constant more or less with rising trends providing depicting limited opportunities for increasing affordability for consumers. Individual consumers of retail property spaces had been suffering to a large extent with rising property rates and unaffordable rent rates. Leases has also been escalating in recent periods depicting further rising prices of goods and services.   

Economic Determinants and Social Factors

GDP of Australia has been increasing at a minor rate in the recent period mostly stagnating. Productivity in the country primarily in Silverwater region has been dependent on mining. Mining exports contribute to a sizable amount in the GDP and it has been growing by small amounts. Silverwater offers limited service related productivity that can contribute towards GDP as it is mostly production related of goods and various other items. Apart from mineral exports this region can support retail services as well with its ever growing retail spaces.  

Employment in Australia has been on a decline in recent period. There has been rising unemployment in the region, as most manufacturing companies in Australia are outsourcing their facility to low cost countries. Employment has become a major challenge in the Australian region with rising number of people losing their jobs in automotive, telecommunication and other sectors. However, Silverwater continues with its stable employment prospects in its mineral extraction industry. The locality can offer immense potential for employment prospects in the future with development of retail spaces that can provide a positive impetus in turn. with development of retail spaces in the area it is expected to employee around 6,000 to 8,000 people from the neighborhood population at full time retail stores.     

Consumer confidence within Australia had been dipping at a constant rate with in capabilities to cater to property rates. Affordability has gone down significantly across entire Australia but in Silverwater such is not the situation. Silverwater have been able to support positive affordability for its properties as against consumers income disposition. Consumer disposable incomes in the area is almost at par with national earnings rate provided by the center.    

Government Policy at the Federal level is immensely supportive of developments or growths related to the property markets. The City of Parramatta Council also aims at developing policy that can attract investors set up retail spaces and employ a large number of people. Government has also been providing affordable mortgage rates for development and setting up of retail properties in the area. Such endeavors along with bureaucratic relaxation on tax structures have provided large impetus to growth and development of properties in Silverwater.

World events as recent economic downturn has immensely affected the entire globe with financial crisis. Australia too have been impacted from such financial downturns leading to a period of economic crisis. There had been fluctuations of interests rates, inflation rates, currency rates and market fluctuations as well that has forced a multiple number of investors into property markets for investing. Outsourcing has been a major game changer in Australia with majority of production and service related jobs from automobile, telecommunications and other industries going to less developed countries. Australia has become an expensive destination for manufacturing as well as for services. Hence, there has been a tremendous decline in productivity of manufacturing as well as services in the country. Terrorism activities has also affected various industries around the world and affected productivity. Australia has seen in a change in its social structure that has impacted its business relationships with several other countries. Silverwater being a small destination across NSW have been able to manage and sustain its growth due to its low levels of reliance on a large number of economic activities. Its small population has also been able to support its robust growth and development related infrastructures.   

Large Format Retailing and Future Prospects

Inter-relationships exists amongst the various macro as well as micro economic variables of the country as well as across smaller locations as Silverwater. The location owes its development to the connectivity it gets from with Sydney CBD and City of Parramatta. Such connectivity allows development in the region and also its robust growth infrastructure.

A property clock is an essential tool for analysis of a property market. It also allows experienced property investors to purchase or sell their properties at appropriate selling or purchase time. Every property markets around the world and also across Australia undergoes a period of transition through a cycle and in case an investor is able to sell or invest or purchase property at the right time then it can lead to a difference in thousands of dollars being made in their investments. It allows tracking of the property market cycle and is based upon the well-known stages of a property cycle which can start from a “boom”, where prices of property are highest to “bust”, where prices in property market touches bottom of the cycle, further initiating the cycle towards a boom period. Analysing location Silverwater in the Property Clock it can be said that it had usually been at the bottom of the market till time of globalisation came and then the location started to get various economic impetus.

Silverwater had been functioning as a factory or warehouse facility for last 50 years. It had been functioning as a mere facility location, but the recent transfer of the Council to City of Parramatta and development of road infrastructure has led to development of various facility at the location. Silverwater is now being visualized more as an individualistic location than a mere facility space, it now has a growing population with various self-capable shops and restaurants to cater to the needs of the location. With decent rise in population over the past few years, there has been a steady rise in property prices in the place. Rent rates, lease rates and other property prices of retail especially which are centrally located are continually on the rise. Though entire Australia real-estate market have slid in the recent period with prices getting slashed at various locations, Silverwater had been able to maintain a steady rate. Silverwater gradually is on the verge of approaching rising market with its property prices gradually escalating with rising demands. The rising market prices of the retail properties have immense opportunities for sellers of retail properties in the area to gain from lease as well as sell of properties. Rental incomes in the area has also increased of retail spaces along with commercial space. Returns from rents have increased tremendously in the area, which reflects that demand of properties has been rising. Investors and property dealers can pick-up new properties in the area and hold on till prices goes to peak levels. In cases of sellers of retail spaces they can wait till prices soar above average levels in the area allowing for opportunities to make abnormal profits. Such periods of time investing or selling according to Property Clock timings will allow greater profitability and gains that can be used for other investment purposes. Though Property Clock depicts appropriate prices for buyers, sellers and investors of retail spaces, there still remains risks from unexpected economic or market related developments that can set deviations in property cycle. Sometimes it reflects short-term view of the market with long-term benefits in investment property portfolio. During periods of stagnation or downsizing period there is a possibility for generating money in real estate.

Conclusion

Property market analysis of Silverwater reflects increased geographic opportunities in commercial, industrial, residential and retail sectors. A diversified range of properties are getting built with multiple land uses with built forms. Investors along with large number of developers are currently focusing to building major warehousing space with commercial development in the area that could provide further impetus to growth in the area. Silverwater can provide a best cost effective solution located at nearest Sydney point with its robust connectivity and affordable lease prices. All these factors contribute to the development of property sector within the area. This has also caused Silverwater to become a highly sought after location for retail space from being a less developed location. Setting up of retail space in the area can be high profitable and return oriented compared to other locations along with its highly structured roadways that allows connectivity across multiple sector to transport goods from one place to another. Economically the place is viable and can generate high amounts of economic impact on spaces getting developed.

Reference Lists

Ashton, P. (2010). ‘This villa life’: town planning, suburbs and the ‘new social order’in early twentieth?century Sydney. Planning Perspectives, 457-483.

auspost.com.au. (Retrieved on 16th November 2017). Silverwater, Australia. https://auspost.com.au/postcode/silverwater.

Baum, S. (2008). Suburban scars: Australian cities and socio-economic deprivation (No. 15). Griffith University, Urban Research Program.

Brown, J. (2009). Last Word: Breaking the Cycle. Government News, 34.

Chung, D. &. (2016). 14 Risk-sharing in public–private partnerships: a contractual economics perspective. Handbook on Transport and Urban Planning in the Developed World, 254.

Council, P. C. (2011). Parramatta development control plan. NSW, Parramatta.

Davidson, M. &. (2012). The redevelopment of Olympic sites: examining the legacy of Sydney Olympic Park. Urban Studies, 1625-1641.

domain.com.au. (Retrieved on 15th November 2015). Property Prices Analysis. https://www.domain.com.au/news/expected-house-price-growth-in-2017-could-spell-trouble-for-sydney-20170110-gtp8w5/.

Gumtree. ( Retrieved on 15th November 2017). Silverwater Property Analysis. https://www.gumtree.com.au/s-property-for-rent/silverwater-sydney/c18364l3003446?sort=rank.

Obeng-Odoom, F. &. (2016). Migrants and the transformation of local neighbourhoods: A study of the socioeconomic transformation of Lidcombe, Australia. Urbani Izziv, 132.

Property, Y. I. (Retrieved on 15th November 2017). Silverwater Property Analysis. https://www.yourinvestmentpropertymag.com.au/top-suburbs/nsw-2264-silverwater.aspx.

Realcommercial. (Retrieved on 15th November 2017). Silverwater Property Analysis. https://www.realcommercial.com.au/for-sale/in-silverwater,+nsw+2128/list-1.

Render, F. (2014). Product data sheet.

Scholz, E. T. (2013). Workplace learning in veterinary education: a sociocultural perspective. Journal of veterinary medical education, 355-362.

Symes, C. (2007). 10 On the right track. Spatial Theories of Education: Policy and Geography Matters, 175.

Tice, A. (2015). Age-cohort and Housing Market demand Area interactions.

Tranter, K. (2099). Last Word: Ignorance or Mendacity? Government News, 50.

Vejdean, N. E. (2015). Vox: How has the booming residential market impacted the commercial market? Journal (Real Estate Institute of New South Wales), 13.

Zhou, T. H. (2016). Research on the Performance Optimization of Silver Water-Based Gravure Ink. In China Academic Conference on Printing & Packaging and Media Technology (pp. 975-984). Springer, Singapore.

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