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Opinion

Adelaide city is growing up, and that's a good thing

Opinion

In part two of his analysis on Adelaide’s CBD, Andrew Beer argues that the post-pandemic city centre will reclaim its importance and continue to grow and flourish.

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Many South Australians do not realise that Adelaide has the largest CBD in Australia. When we think about all that we will need to cram into the Adelaide city centre over the next 50 years, the scale of our CBD can only be an asset. Otherwise we may not fit it all in.

There is no doubt that COVID-19 and the measures we have put in place to limit its impact have reshaped Adelaide as a centre for retailing, entertainment and employment. But many of the changes we see in Adelaide have been emerging for some time.

CBDs have always been characterised by high-value activities, such as corporate offices, luxury shopping and specialist firms providing services to the business community. These benefit from central locations where they can draw the biggest customer base or provide the most convenient service. Workers have also come to the city for a wide range of jobs, including managers and businesses leaders, as well as those occupying support positions in administration, communication and, in the now forgotten past, manufacturing.

Read part one of Andrew Beer’s analysis: Reports of the death of Adelaide’s CBD are greatly exaggerated

Covid-19 has been a shock to the economy and vibrancy of cities around the globe, with the impacts most evident in city centres. But cities have always changed: the Adelaide CBD of 2021 is very different in its buildings, businesses and streetscapes compared to 2001, which in turn was a remarkable transformation from 1981. Along the way Adelaide has lost its image as a ‘big country town’ where everyone knows everyone, and we can all expect to be able to park on major city streets. COVID-19 has simply resulted in accelerated transformation, and this kind of high-visibility change triggers comment and concern amongst policy makers, investors and the public.

There was a time when retailing flourished in the city centre, but near-universal car ownership, alongside lower rents and land prices in the suburbs, have stripped away that competitive edge. Over the past two years we have also learnt that we can be more flexible about where some forms of work take place. Current trends see more office workers staying out of the CBD for all or some of their working week. These directions for the city are evident in developments that pre-date COVID-19 by some considerable margin.

One of the key drivers of growth for Adelaide’s CBD over the next 30 years will be its role as a source of innovation. Many parts of the world have embraced the knowledge economy and its potential. For a variety of reasons Australia has lagged behind, and the innovation that has emerged has been concentrated on the eastern seaboard.

The good news is that Adelaide’s modest performance in the knowledge economy is on track to be reversed. The development and success of Lot 14 will accelerate Adelaide’s engagement with new technology and disruptive business models – taking advantage of its location in the city centre to generate ‘buzz’ alongside commercialisable intellectual property.

New housing opportunities and forms continue to add interest to the city landscape, and as more people live locally, foot traffic, retail sales and the sense of a living city rises.

Of course, South Australia has attempted to join the innovation race in the past, with high profile initiatives associated with the Multi Function Polis (Mawson Lakes), the Tonsley Innovation Precinct and the Hindmarsh Biotech precinct.

But these are all initiatives based outside the city centre. From the MaRS Discovery precinct, in Toronto, through to the riverbank redevelopment in Chattanooga, globally we now accept innovation and creativity thrives best in the heart of the city.

Leisure, entertainment and sport will remain a second key driver of the success of Adelaide’s CBD. Developments at the Adelaide Oval, further investment in and around the Festival Centre and the establishment of the new museum of Aboriginal culture will add to the city centre’s lustre as a destination. As domestic and international flights establish a ‘new normal’, its appeal locally, nationally and internationally will continue to strengthen – to the benefit of restaurants and other businesses in the CBD.

Our festivals, in all their guises and their celebration of diversity, will be more important than ever before. They will add excitement, colour and – most importantly – a reason for people to choose to come to the CBD.

The plans for the new Women’s and Children’s Hospital underscore the third pillar of the CBD economy over the coming decades. The new RAH and the associated Bragg Building, as well as Calvary’s new hospital and other projects in planning stages, highlight the city centre as the focus of health and health services in this state. Inevitably, ancillary services will seek to cluster around these central hospitals.

Major educational institutions and research hubs will grow as a source of employment and driver of growth over the coming decades. It is no accident that the major universities and institutions of knowledge are clustered on and around North Terrace, because they benefit from being close to each other and there are advantages in rubbing shoulders with industry and government. The northern edge of the CBD simply offers the best location. While the pandemic has seen a fall in international student arrivals, there is every indication they will return in numbers once borders have opened and air travel resumes.

Over the past 20 years there has been substantial investment in new residential developments within the city square mile. New housing opportunities and forms continue to add interest to the city landscape, and as more people live locally, foot traffic, retail sales and the sense of a living city rises.

Finally, old fashioned ‘command and control’ functions – the running of businesses, the networking with collaborators, the development and execution of strategy – are likely to become stronger, not weaker, over the coming decades. We need to acknowledge the significance of securing the Australian Space Agency within our borders, as well as our key role in defence investment. And there is scope to achieve more in terms of attracting head offices from both the public and private sectors.

So Adelaide’s CBD is changing, and we should welcome that change.

Into the future, it will be even less focussed on routine services and activities that are easy and cheap to reproduce and deliver in suburban shopping malls. Instead, it will target high value, high inter-personal connection activities central to the emerging economy. This transformation will give greater opportunities for the city centre to play a more distinctive role in the metropolitan economy and the lives of South Australians.

Andrew Beer is the Executive Dean of UniSA Business. His research interests include Australia’s housing markets, the drivers of regional growth, structural change within the economy and the impacts of an ageing population.

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