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Sky’s the limit for Sydney's CBD … almost

Tradable floor space for super towers in Sydney’s CBD. JBA’s Samantha Miller explores the opportunity of new high density zones and strategic floor space in the Central Sydney Planning Strategy.

High density zones, strategic floor space and tradable floor space explored.

The draft Central Sydney Planning Strategy is now an endorsed City of Sydney Council policy. This is a new guiding document that will shape the growth and development of the Sydney CBD over the next 20 years (read JBA’s overview of the Strategy here). One of the primary objectives of the Strategy is to unlock an additional 1.2-1.8 million square metres of employment floor space above the existing and proposed planning controls to ensure that the CBD can accommodate an additional 97,000-130,000 jobs between now and 2036. This new floor space will be located in three tower cluster areas called High Density Zones. Developers and landowners will be able to lodge a planning proposal to achieve ‘strategic floor space’, realising increased building heights and floor space subject to a range of terms and conditions. JBA explore the two new concepts of high density zones and strategic floor space.

High Density Zones

The Strategy introduces three high density zones being the areas which Council have identified as able to accommodate tall towers whilst still ensuring the protection of public spaces and public views:

  • Western Corridor: potential heights up to 300 metres, floor space ratios up to 24:1
  • CBD Core: potential heights up to 329 metres, floor space ratios up to 26:1
  • ‘Midtown’ CBD: potential heights up to 290 metres, floor space ratios up to 19:1

Also identified is a future high density zone covering the Haymarket and Ultimo area, where heights up to 250 metres and floor space ratios up to 20:1 could potentially be achieved.

JBA has taken a closer look at the Built Form Capacity Study informing the Strategy and Council’s assumptions informing the high density zones to identify potential opportunities and explore some of the limitations. Each zone contains a number sites with planning approvals, buildings under construction as well as buildings recently constructed and unlikely to be redeveloped in the next 20 years. The number of potential development sites within each zone is limited and a number of these will require significant amalgamations in order to achieve the proposed heights and floor space identified within Council’s capacity study.

The map in Figure 1 compares the location of the high density zones with the specified potential height contained within the capacity study. Very few sites across the CBD have been directly specified as opportunities for buildings in excess of 300 metres within the capacity study. A number of sites within the high density zones have either not been identified or not had a potential height specified through Council’s analysis. Although JBA considers these sites will be open to the same opportunities as neighbouring properties, further investigations will be required. Subject to modelling, a number of additional sites may be able to achieve heights in excess of 300 metres, especially within the CBD core precinct.

Potential Heights Mapped
Figure 1: Potential heights identified in Built Form Capacity Study. Source: JBA, Data Source: City of Sydney.

Unlocking strategic floor space

No increases to height limits or floor space maximums have been included in the proposed amendments to the Sydney Local Environmental Plan 2012, with the exception of the increased height in the western corridor to 110 metres. In order to achieve the increased height and floor space identified in the Strategy and capacity study, proponents will be required to submit a site-specific planning proposal (LEP amendment).

The potential height that an individual site can achieve will be determined by overlaying each of the sun access planes, view corridors, no additional overshadowing planes, special character area considerations and heritage constraints, with an upper limit based on Sydney Airport air space restrictions (see Figure 2).

Tradable floor space
Figure 2: Calculating potential strategic floor space. Source: JBA.

Council’s capacity study produces a formula for determining the allowable floor space based on the maximum height the site can achieve. It is expected that this formula will be applied during the site-specific planning proposal process to determine the maximum floor space on a specific site. Any additional floor space granted through this process must be for ‘strategic uses’ only. Strategic uses consist of office development, retail and business premises, hotel and motel accommodation and community facilities. Strategic floor space cannot be utilised for residential uses or serviced apartments.

What remains unclear under the Strategy is whether this pathway will be available to mixed use developments containing a proportion of residential or serviced apartments, or whether these super tower sites will be restricted to wholly employment generating developments. On face value, excluding fully or largely residential towers (e.g greater than 50% residential) from this process is consistent with the Strategy. The complete exclusion of residential uses, however, may limit the uptake of opportunity sites and may not deliver the landmark, truly mixed use developments that the Strategy is attempting to encourage in Sydney.

It is also unclear whether strategic floor space will be restricted to sites within the identified high density zones. A number of sites identified for potential heights up to 300 metres by Council’s capacity study fall outside of these zones. This would represent a missed opportunity to deliver additional employment capacity on sites capable of protecting public spaces. It is our view that Council will likely consider these sites on a merit basis with opportunities for strategic floor space open to appropriate locations.

The timing of the ‘future high density zone’ in the Haymarket/Ultimo area is also uncertain and it is unknown whether Council will undertake further studies to identify and protect public spaces in this locality before considering site-specific planning proposals to unlock the additional height and floor space identified in the capacity study.

Following the approval of a site-specific planning proposal, and amendment to the Sydney LEP, a project will be required to conduct a design competition in accordance with Council policy and following this, a Development Application will be lodged with Council. A project aiming to achieve strategic floor space is expected to have a time frame of at least two years’ dependent on the streamlining of the planning proposal process. The expected approval process is laid out in Figure 3.

Strategic Floor Space Flowchart.jpg
Figure 3: Planning process for unlocking strategic floor space. Source: JBA.

A Guideline to preparing site-specific planning proposals will be prepared by the City of Sydney and is expected to be released when the Strategy and proposed amendments to the Sydney LEP are placed on exhibition in October this year. The Guideline is expected to provide a great deal of clarity to the process and requirements for unlocking strategic floor space and additional height.

Value-sharing and tradable development rights

A key message from the Strategy is that whilst there is the potential to achieve additional height and floor space within the CBD, this will not be granted without some provision towards public benefit. The Strategy indicates the requirement for “the sharing of planning gain…to fund public infrastructure”. This is reiterated in the principles that will underpin the forthcoming Guideline. Despite the lack of details currently available, an insight can be gained from Council’s framework for the Southern Employment Area (Alexandria/Rosebery), where areas are earmarked for rezoning but developers are required to enter into a planning agreement to provide public benefit equal to 50% of the value uplift prior to rezoning on a site-by-site basis.

Council may for example adopt a similar approach for strategic floor space, where a developer will be required to enter into a planning agreement to provide or fund public infrastructure. The value-capture requirements are anticipated to be detailed in the Guideline when released.

An interesting alternative is also flagged in the Strategy – a tradable floor space scheme (see page 241 of the Strategy). Whilst there is limited information currently available, the Strategy suggests that the Council are preparing a framework where floor space can be traded and transferred from a site affected by sun access planes to a site proposing strategic floor space. We suspect this would be an alternative to entering into a planning agreement as discussed above.

A project ultilising strategic floor space would be required to transfer or purchase an area of floor space equal to the additional area above the planning controls. This area can be transferred from sites where the maximum permissible floor space cannot be achieved due to the height restrictions of a sun access plane (illustrated in Figure 4). We expect that this scheme, if introduced, would also apply to sites affected by similar restrictions such as no additional overshadowing provisions and public view corridors, however we will need to wait and see in the release of this scheme. How this system will be administered is unknown but this is an exciting innovation for the Sydney CBD and we are eagerly awaiting more details on a potential floor space transfer system to be released in the Guideline.

Tradable floor space.jpg
Figure 4: Transferable floor space. Source: JBA.

The fabric is changing for the Sydney CBD and everyone is jostling to be in a position to capitalise on the new development opportunities. With the forthcoming information on the process and additional requirements for site-specific planning proposals to be released soon, it will be a little while before we can fully appreciate the full potential of the high density zones and strategic floor space opportunities to influence the manner in which development decisions in Sydney are made. The Guideline to site-specific planning proposals will be a critical document to informing development decisions in the Sydney CBD.

If you are interested in further information on the implications of the Central Sydney Planning Strategy and opportunities in the Sydney CBD, please contact JBA’s team of specialists – Andrew DugganClare SwanAlexis CellaBrendan HoskinsMichael RoweYvette Carr or Samantha Miller on 02 9956 6962.