Dear guys,
Couple of articles below from online Property Australia magazine from the Property Council of Australia.
Not possible to put direct link so articles put below.
http://www.propertycouncil.com.au/
February 2004 VOL 18 NO 4
Moving out of home
The technology to introduce advertising on, in and around any property is already here. But do planning restrictions mean the tops of skyscrapers are the limit for property advertising? Sue Robinson investigates.
Despite a fall in revenue after the Olympics boom, John Gooley, executive officer for the Outdoor Advertisers Association of Australia (OAAA), is optimistic. "We've had five quarters of consistent growth averaging 8 percent p.a. of revenue to end September. And we're expecting the strongest ever quarter for December."
Outdoor advertising doesn't have to be limited to a permanent structure such as a billboard or sign. The 2003 Rugby World Cup saw spectacular 35mX10m projections onto the glass side of the AMP building at Circular Quay. "So well done, it was almost three dimensional," says Gooley.
Sculpture is represented by the 45m movie character Spiderman crawling down a North Sydney skyscraper. "It's almost limitless," says Gooley, adding that big effects can be achieved with increasingly small on-site complications. Video screens, for instance, can be programmed by laptop. The corner of Melbourne's Bourke Street Mall and Swanston Street is an example. It carried the Keep Australia Beautiful campaign, showing clips of different Australian locations and was, says Gooley, "fabulously successful".
A simpler technology is used at Sydney's airport where an 18x12m site uses a row of triangular slats with a slice of a different picture on each face. When the slats are turned together the poster changes.
In another example, Australian Ambient Solutions, promoting Play Station, projected giant monsters onto buildings in each capital city in Australia. The campaign lasted over four nights, changing locations each night.
Signs inside
Creatable Media claims 74 per cent of the market for tabletop advertising panels (TAPs) in shopping-centre food courts. Craig Lazarus says the industry has grown rapidly since its start in September 2001, with the company now supplying 5000 tabletops with a panel in each. "Basically it's a simple business – we own the food court market in Australia," claims Lazarus, citing contracts with Westfield, Lend Lease, AMP and some independents.
Creatable Media supplies and maintains the tables and the shopping centres get a percentage of revenue. "We've turned a non income-generating asset into an income-generating asset for shopping-centre owners. The benefit is, not only do you touch the walking wallets, you also touch the customers at the point in which they are making the purchase decision.
"We're currently negotiating with pubs and clubs and airports and casinos and other things. We've got 100 category-A shopping centres in Australia and New Zealand currently in our grasp and we're looking at other regions."
He says TAP advertising is relatively easy to measure – just ask people as they leave the food court what they saw on the tabletops. Recent research on a Nestle campaign for Kit Kat showed 80 percent of surveyed customers remembered the ads.
Peter Glavincevski, commercial director of Adshel says his company's core product is an illuminated 1200x 1800mm 'superlight' advertising panel. Usually used in shopping centres, it can be a double- or triple-sided freestanding unit, or wall-mounted. The company owns and provides the signs and gives the landlord a share of revenue.
Glavincevski regards tact as essential to the success of his business. "We knock back an enormous volume of business because we are not prepared to put on our panels some things that are controversial – and advertisers want controversial."
He points out that people don't have the choice of not seeing the signs. And he says he would rather do without the business than let an upsetting ad through. "It's not worth the grief, because we are not here for the short term."
Network 10's Eye Corp mall media company, Eye Shop, offers similar signs in around 3000 sites in 69 shopping centres in Australia and New Zealand and says business is growing. It also supplies smaller signs in parent rooms in shopping centres and around 1000 internal and external signs in airports.
"It's an audience that we can quantify and qualify more than with billboards," says CEO Gerry Thorley. "Airports are a similar situation." He says advertisers can Ôdrill down in airports' to specific lounges and passenger destinations.
Eye Corp signs are, he says, in independent centres plus all Westfield, Gandel and AMP centres in the major metropolitan cities and all Westfield centres in New Zealand.
Thorley says opportunities may arise for new sites, though the big screens prominent during and after the Olympics may be difficult to swing. There are planning issues and: "the cost of production at the moment is very, very high. The flexibility to do it seems to be a bit of a stumbling block."
A potential option is using scaffolding during construction or refurbishment projects, providing: "a very large area to play with. It has been used in Europe. Currently councils make it hard to arrange in Australia."
He says innovations seem to be happening more in the smaller format area. "There's been a renaissance overseas, particularly in Europe on outdoor advertising," says Thorley, "particularly in shopping centres."
Billboards
John Gooley explained how to get a large sign on your building. Each state, he says, has a different environmental planning policy and level of delegated authority to local government. So some councils' environmental plans can include policies on outdoor advertising.
"Some states have a series of guidelines. NSW has a State Environmental Planning Policy (of which SEPP 64 relates to outdoor advertising and provides guiding rules for local government to follow).
"Victoria does have some overriding guidelines but there is almost no easy comparison. For instance, in Victoria since 1932 there has been no freeway-side advertising. When you drive down you see thousands of signs, but they are all road safety and normal freeway signage."
Putting up the billboard involves a DA to use the land for that purpose, and a building application to put up the billboard structure. The life of approval for the sign is generally specified at five, seven or 10 years depending on the site and traffic.
"You can have a go yourself, but it's terribly complicated," he says.
The property owner will usually receive rent under a leasing agreement that lasts the length of approval. Some deals involve share in revenue, but this would only be of value, says Gooley, if the site is exceptional – visible from a large area, or reaching the attention of a huge number of drivers.
There may or may not be an upfront payment. While media contractors will approach property owners with potential sites, he says it's still worthwhile approaching them to find out what a site on your building is worth.
So what do media contractors look for in a billboard site?
Brian Tyquin of Outdoor Plus says: "Position, position, position. It's got to be on a major road with good traffic density, clearly visible – a primary road. We're not interested in secondary roads." The site must be visible Ôhead on', not parallel to the roadway.
Skysigns, those huge neon identifiers on tops of office blocks, are not as lucrative as people think. They are, says Tyquin, too hard to change. "And people have generally very highly inflated ideas about what they're worth."
He was recently approached with a skysign site in North Sydney. The owner suggested a price of around $200,000, eventually lowering it to $50,000 "I said Ôhow about $20,000'.
"Skysign business is generally sold over five years to very corporate clients. Some of the big Japanese companies are very big about neon signs."
Property owners sometimes contact him, says Tyquin, "but in those cases the sites are not all that good. About 70 percent of the people who contact us think advertising is the panacea to good fortune. A dose of reality is called for."
He generally contracts for five years with rent dependent on the site. "It could be anything from $10,000 a year to $50,000 a year. That's for large sites (12.6X3.4m). Smaller sites (24-sheet or 6X3m) fetch $1200-2000. His company does handle newer technologies. An electronic message centre in Perth is an example, hooked into Channel 10 for news and weather updates.
Value adding
Sometimes good design can increase the value of signs in shopping centres according to Bruce Shaw, managing director of Buchan Group.
He says integrating potential signs into centre design also makes them look more acceptable to councils. For example, Plenty Valley, a local shopping centre in outer Melbourne has a semi-rural site. The large billboard graphics within the mall show rural scenes – "artistic photographic representations of the local landscape" – to encourage the local community to feel ownership of their shopping centre.
Some signs enhance the architecture. Western Melbourne's Highpoint's external entertainment dining area uses a large curved graphic panel enclosing the external piazza close to the cinema entrance. This covered bland external walls, creating an "environment which is vibrant and theatrical". Chermside and Harbourtown in Queensland, says Shaw, have the same sort of approach.
Many poster or signage campaigns are linked to other promotions and according to Mike Connolly, principal of Buchan Group, these combined campaigns can offer both revenue and publicity, particularly in retail.
He says Europe is using, and Australia is considering, 'non-rent' initiatives which match the style of the centre to the demographic of its customers.
He cites three methods:
Experience sponsorship. Traditionally seen as a one-way transaction, this is now used as a two-way, long-term deal rather than an incidental opportunity. For example, Bluewater shopping centre in England developed a long-term relationship with Ford. To promote new Land Rover and Range Rover models, Ford paid Bluewater what Connolly calls "a sizeable amount of money", built a four-wheel drive experience track behind the centre and developed a promotional site in the carpark at no cost to Bluewater. Sales of Land Rovers from Bluewater matched those of the UK's top dealers. The deal improved branding for Bluewater, increased foot traffic, provided income and offered benefits to other tenants without any increased outgoings.
Culture. "There's a huge pressure on public facilities like art galleries and museums to decentralise," says Connolly. "This is very expensive for them and unless they can get cheap venues for their travelling exhibitions and displays, they can't fulfil their public charter to provide access to art." Shopping centres, "particularly the ones in Europe" provide a controlled environment where their customers can see an art show. "Some-times the cultural festivals that are being held in the towns are also part of the shopping centre life, particularly in Spain and Turkey."
Education and community building. "Shopping centres are starting to recognise the education component, and museums, school bands and music festivals are starting to be integrated into retail centres and high streets. Community relations does cost the centre a bit of money but it's accounted for in the promotional budget and tenants see the value in the cost because it develops brand loyalty to the centre as a whole."
Mall exposure
Westfield's new division, Westfield Mall Media, has formed alliances with selected media contractors to maximise revenue from shopping centre advertising.
National brand alliance manager, Anthony Laver, explains. "From Westfield's perspective, this gives us a greater opportunity to leverage our shopping centres nationally. We can provide critical mass to advertisers and their clients to reach consumers." He says Westfield's strength is national reach and frequency. The centres can deliver the eyes of 28 million shoppers a month and offer audited traffic statistics and demographic profiles.
"We've become the fourth medium (after TV, radio and print) and we can charge appropriately for that.
"Mall media has matured in the last year but it's been growing for four years," says Laver, adding that Westfield is considering two other areas: carparks and digital screen network (plasma and LCD) screens. "They are being finalised now but hopefully they'll be 2004 initiatives."
In the meantime, Westfield at Bondi Junction has introduced new technology via Eye Corp signs. The scrolling signs use GPS remote monitoring technology so they can be controlled by mobile phone.
Current sites for sale include Eye Corp Eyelites in common domains, Creatable Media tabletops in food courts, Eye Corp Babylights in parent rooms (A3 edgelit signs), A4 Convenience Advertising signs in the restrooms, and community postcard holders in the parent rooms.
"They are all sold on a national deal with national advertising," says Laver. Westfield co-ordinates and liaises between the centres and the media contractors who sell the space and pay a base rent and percentage of turnover.
Laver says the chosen alliance partners have exclusivity in the centres and the opportunity to grow with the business.
How profitable is this? Laver says Steven Lowy was recently quoted as saying it provides up to 10 per cent of management income. "And it's using previously unutilised space, and increases the return on investment on assets. Dollarwise, it's significant."
February 2004 VOL 18 NO 4
It’s a Wrap
Planning restrictions are having an impact on the size and type of outdoor advertising. Chris Larsen spoke to Damien Rath about the problems being encountered.
Just over two years ago motorists in Sydney gaped at a Cathy Freeman hundreds of feet tall. ‘Cathy’ was a huge poster, wrapped around the exterior of 201 Kent Street in the city’s CBD.
The ‘wrap’ at once both transformed the building into an enormous billboard, and left anyone who drove past on the nearby freeway with no doubt that they were in a city hosting an Olympic Games.
Impressive though it was, the chances of seeing something similar again in Australia are slim.
Damien Rath, national development manager for Cody Outdoor Advertising, says such building wraps are common in Europe, where they are often used to disguise construction work.
However they’re generally forbidden by Australia’s local councils, unless they have a perceived cultural or community benefit. 201 Kent Street’s wrap was allowed in 2000 because of its association with the Olympic Games.
“There’s not really an environment now where we can have them approved,” Rath says.
“ … it is arguably becoming more difficult to deal with environmental law, particularly when we are called by Councils to examine permits associated with signs which have an historical context or existing use rights, which need to be measured against current town planning codes.”
“In addition, in NSW the industry has seen the introduction of state-based State Environmental Planning Policy (SEPP) 64, which overrides many council controls (and) has attempted to deal with third party signage on a broader scale …
“ … I believe in the industry’s view (it) requires considerable modification for it to be effective and workable for the industry, advertisers and government.”
Rath says the industry’s lobby group, the Outdoor Advertising Association of Australia (OAAA), plans to raise the issue of building wraps with the NSW Government in the near future.
But it is issues like these that make some in the industry feel Australia is lagging in some sectors.
“In my experience Australia provides sound, innovative and generally well-maintained outdoor signage,” Rath says. “Plant is comparable to, if not better than, anything I have seen in the US.
“I would say Europe is more progressive with its innovation and acceptance of exploring the medium.
“This is best evidenced by the widespread acceptance and use of temporary ‘building wraps’, particularly to conceal building scaffolding on key sites under construction.
“Some of these wraps are not only large but contain great creative.”
Despite some of the restrictions commonly associated with outdoor advertising, Rath says property owners and managers are increasingly seeing the medium as useful.
“Outdoor advertising is becoming more important to property owners or managers looking to value add to a property by generating additional income streams, similar to that of adding telco facilities to properties,” Rath says.
“Generally property owners view outdoor advertising sites as a good revenue stream for very little effort.
“That is, no lessor/tenancy fitouts or incentive costs and little disruption to existing tenants uses.
“In most cases the costs of constructing, maintaining and removing the signage are paid by the outdoor company.
“We are also commonly approached by property developers wanting to ‘load’ third party signage into property models to increase prospective returns.
“We have an established group of property developers … who will seek to integrate it into the architecture of the building.”
Rath believes the inclusion of outdoor signage in the design phase of properties will become standard practice over the next two to three years.
But while the potential for dollars is there, they’re not getting any easier to extract – planning hurdles are not likely to just go away anytime soon.
“Generally it is becoming more difficult to comply with increasingly restrictive town planning controls brought about by councils,” Rath says.
“I would say this is this case across most capital cities, as the outdoor advertising market enters a maturity phase.
“This largely stems from the perception of some town planners of (the) perceived environmental impact of outdoor signage.”
Rath says market research during the Olympics period refutes this, showing a majority of people were receptive to well-placed outdoor signage depicting interesting creative.
“Having said that, there are councils which are innovative in understanding a balanced approach to satisfying the needs of outdoor operators by permitting the development of new advertising signage, which can provide information to the community and add to the vitality and vibrancy of different areas.
“We believe these Councils are forward thinking rather than simply enforcing prohibitions.”
Interestingly, Rath doesn’t believe councils are trying to retreat from their own past decisions allowing signage on property.
Instead, he says councils are starting to get more sophisticated in how they deal with the issue.
“From a planning perspective, I don’t know that it’s a bad thing for the industry.”
Couple of articles below from online Property Australia magazine from the Property Council of Australia.
Not possible to put direct link so articles put below.
http://www.propertycouncil.com.au/
February 2004 VOL 18 NO 4
Moving out of home
The technology to introduce advertising on, in and around any property is already here. But do planning restrictions mean the tops of skyscrapers are the limit for property advertising? Sue Robinson investigates.
Despite a fall in revenue after the Olympics boom, John Gooley, executive officer for the Outdoor Advertisers Association of Australia (OAAA), is optimistic. "We've had five quarters of consistent growth averaging 8 percent p.a. of revenue to end September. And we're expecting the strongest ever quarter for December."
Outdoor advertising doesn't have to be limited to a permanent structure such as a billboard or sign. The 2003 Rugby World Cup saw spectacular 35mX10m projections onto the glass side of the AMP building at Circular Quay. "So well done, it was almost three dimensional," says Gooley.
Sculpture is represented by the 45m movie character Spiderman crawling down a North Sydney skyscraper. "It's almost limitless," says Gooley, adding that big effects can be achieved with increasingly small on-site complications. Video screens, for instance, can be programmed by laptop. The corner of Melbourne's Bourke Street Mall and Swanston Street is an example. It carried the Keep Australia Beautiful campaign, showing clips of different Australian locations and was, says Gooley, "fabulously successful".
A simpler technology is used at Sydney's airport where an 18x12m site uses a row of triangular slats with a slice of a different picture on each face. When the slats are turned together the poster changes.
In another example, Australian Ambient Solutions, promoting Play Station, projected giant monsters onto buildings in each capital city in Australia. The campaign lasted over four nights, changing locations each night.
Signs inside
Creatable Media claims 74 per cent of the market for tabletop advertising panels (TAPs) in shopping-centre food courts. Craig Lazarus says the industry has grown rapidly since its start in September 2001, with the company now supplying 5000 tabletops with a panel in each. "Basically it's a simple business – we own the food court market in Australia," claims Lazarus, citing contracts with Westfield, Lend Lease, AMP and some independents.
Creatable Media supplies and maintains the tables and the shopping centres get a percentage of revenue. "We've turned a non income-generating asset into an income-generating asset for shopping-centre owners. The benefit is, not only do you touch the walking wallets, you also touch the customers at the point in which they are making the purchase decision.
"We're currently negotiating with pubs and clubs and airports and casinos and other things. We've got 100 category-A shopping centres in Australia and New Zealand currently in our grasp and we're looking at other regions."
He says TAP advertising is relatively easy to measure – just ask people as they leave the food court what they saw on the tabletops. Recent research on a Nestle campaign for Kit Kat showed 80 percent of surveyed customers remembered the ads.
Peter Glavincevski, commercial director of Adshel says his company's core product is an illuminated 1200x 1800mm 'superlight' advertising panel. Usually used in shopping centres, it can be a double- or triple-sided freestanding unit, or wall-mounted. The company owns and provides the signs and gives the landlord a share of revenue.
Glavincevski regards tact as essential to the success of his business. "We knock back an enormous volume of business because we are not prepared to put on our panels some things that are controversial – and advertisers want controversial."
He points out that people don't have the choice of not seeing the signs. And he says he would rather do without the business than let an upsetting ad through. "It's not worth the grief, because we are not here for the short term."
Network 10's Eye Corp mall media company, Eye Shop, offers similar signs in around 3000 sites in 69 shopping centres in Australia and New Zealand and says business is growing. It also supplies smaller signs in parent rooms in shopping centres and around 1000 internal and external signs in airports.
"It's an audience that we can quantify and qualify more than with billboards," says CEO Gerry Thorley. "Airports are a similar situation." He says advertisers can Ôdrill down in airports' to specific lounges and passenger destinations.
Eye Corp signs are, he says, in independent centres plus all Westfield, Gandel and AMP centres in the major metropolitan cities and all Westfield centres in New Zealand.
Thorley says opportunities may arise for new sites, though the big screens prominent during and after the Olympics may be difficult to swing. There are planning issues and: "the cost of production at the moment is very, very high. The flexibility to do it seems to be a bit of a stumbling block."
A potential option is using scaffolding during construction or refurbishment projects, providing: "a very large area to play with. It has been used in Europe. Currently councils make it hard to arrange in Australia."
He says innovations seem to be happening more in the smaller format area. "There's been a renaissance overseas, particularly in Europe on outdoor advertising," says Thorley, "particularly in shopping centres."
Billboards
John Gooley explained how to get a large sign on your building. Each state, he says, has a different environmental planning policy and level of delegated authority to local government. So some councils' environmental plans can include policies on outdoor advertising.
"Some states have a series of guidelines. NSW has a State Environmental Planning Policy (of which SEPP 64 relates to outdoor advertising and provides guiding rules for local government to follow).
"Victoria does have some overriding guidelines but there is almost no easy comparison. For instance, in Victoria since 1932 there has been no freeway-side advertising. When you drive down you see thousands of signs, but they are all road safety and normal freeway signage."
Putting up the billboard involves a DA to use the land for that purpose, and a building application to put up the billboard structure. The life of approval for the sign is generally specified at five, seven or 10 years depending on the site and traffic.
"You can have a go yourself, but it's terribly complicated," he says.
The property owner will usually receive rent under a leasing agreement that lasts the length of approval. Some deals involve share in revenue, but this would only be of value, says Gooley, if the site is exceptional – visible from a large area, or reaching the attention of a huge number of drivers.
There may or may not be an upfront payment. While media contractors will approach property owners with potential sites, he says it's still worthwhile approaching them to find out what a site on your building is worth.
So what do media contractors look for in a billboard site?
Brian Tyquin of Outdoor Plus says: "Position, position, position. It's got to be on a major road with good traffic density, clearly visible – a primary road. We're not interested in secondary roads." The site must be visible Ôhead on', not parallel to the roadway.
Skysigns, those huge neon identifiers on tops of office blocks, are not as lucrative as people think. They are, says Tyquin, too hard to change. "And people have generally very highly inflated ideas about what they're worth."
He was recently approached with a skysign site in North Sydney. The owner suggested a price of around $200,000, eventually lowering it to $50,000 "I said Ôhow about $20,000'.
"Skysign business is generally sold over five years to very corporate clients. Some of the big Japanese companies are very big about neon signs."
Property owners sometimes contact him, says Tyquin, "but in those cases the sites are not all that good. About 70 percent of the people who contact us think advertising is the panacea to good fortune. A dose of reality is called for."
He generally contracts for five years with rent dependent on the site. "It could be anything from $10,000 a year to $50,000 a year. That's for large sites (12.6X3.4m). Smaller sites (24-sheet or 6X3m) fetch $1200-2000. His company does handle newer technologies. An electronic message centre in Perth is an example, hooked into Channel 10 for news and weather updates.
Value adding
Sometimes good design can increase the value of signs in shopping centres according to Bruce Shaw, managing director of Buchan Group.
He says integrating potential signs into centre design also makes them look more acceptable to councils. For example, Plenty Valley, a local shopping centre in outer Melbourne has a semi-rural site. The large billboard graphics within the mall show rural scenes – "artistic photographic representations of the local landscape" – to encourage the local community to feel ownership of their shopping centre.
Some signs enhance the architecture. Western Melbourne's Highpoint's external entertainment dining area uses a large curved graphic panel enclosing the external piazza close to the cinema entrance. This covered bland external walls, creating an "environment which is vibrant and theatrical". Chermside and Harbourtown in Queensland, says Shaw, have the same sort of approach.
Many poster or signage campaigns are linked to other promotions and according to Mike Connolly, principal of Buchan Group, these combined campaigns can offer both revenue and publicity, particularly in retail.
He says Europe is using, and Australia is considering, 'non-rent' initiatives which match the style of the centre to the demographic of its customers.
He cites three methods:
Experience sponsorship. Traditionally seen as a one-way transaction, this is now used as a two-way, long-term deal rather than an incidental opportunity. For example, Bluewater shopping centre in England developed a long-term relationship with Ford. To promote new Land Rover and Range Rover models, Ford paid Bluewater what Connolly calls "a sizeable amount of money", built a four-wheel drive experience track behind the centre and developed a promotional site in the carpark at no cost to Bluewater. Sales of Land Rovers from Bluewater matched those of the UK's top dealers. The deal improved branding for Bluewater, increased foot traffic, provided income and offered benefits to other tenants without any increased outgoings.
Culture. "There's a huge pressure on public facilities like art galleries and museums to decentralise," says Connolly. "This is very expensive for them and unless they can get cheap venues for their travelling exhibitions and displays, they can't fulfil their public charter to provide access to art." Shopping centres, "particularly the ones in Europe" provide a controlled environment where their customers can see an art show. "Some-times the cultural festivals that are being held in the towns are also part of the shopping centre life, particularly in Spain and Turkey."
Education and community building. "Shopping centres are starting to recognise the education component, and museums, school bands and music festivals are starting to be integrated into retail centres and high streets. Community relations does cost the centre a bit of money but it's accounted for in the promotional budget and tenants see the value in the cost because it develops brand loyalty to the centre as a whole."
Mall exposure
Westfield's new division, Westfield Mall Media, has formed alliances with selected media contractors to maximise revenue from shopping centre advertising.
National brand alliance manager, Anthony Laver, explains. "From Westfield's perspective, this gives us a greater opportunity to leverage our shopping centres nationally. We can provide critical mass to advertisers and their clients to reach consumers." He says Westfield's strength is national reach and frequency. The centres can deliver the eyes of 28 million shoppers a month and offer audited traffic statistics and demographic profiles.
"We've become the fourth medium (after TV, radio and print) and we can charge appropriately for that.
"Mall media has matured in the last year but it's been growing for four years," says Laver, adding that Westfield is considering two other areas: carparks and digital screen network (plasma and LCD) screens. "They are being finalised now but hopefully they'll be 2004 initiatives."
In the meantime, Westfield at Bondi Junction has introduced new technology via Eye Corp signs. The scrolling signs use GPS remote monitoring technology so they can be controlled by mobile phone.
Current sites for sale include Eye Corp Eyelites in common domains, Creatable Media tabletops in food courts, Eye Corp Babylights in parent rooms (A3 edgelit signs), A4 Convenience Advertising signs in the restrooms, and community postcard holders in the parent rooms.
"They are all sold on a national deal with national advertising," says Laver. Westfield co-ordinates and liaises between the centres and the media contractors who sell the space and pay a base rent and percentage of turnover.
Laver says the chosen alliance partners have exclusivity in the centres and the opportunity to grow with the business.
How profitable is this? Laver says Steven Lowy was recently quoted as saying it provides up to 10 per cent of management income. "And it's using previously unutilised space, and increases the return on investment on assets. Dollarwise, it's significant."
February 2004 VOL 18 NO 4
It’s a Wrap
Planning restrictions are having an impact on the size and type of outdoor advertising. Chris Larsen spoke to Damien Rath about the problems being encountered.
Just over two years ago motorists in Sydney gaped at a Cathy Freeman hundreds of feet tall. ‘Cathy’ was a huge poster, wrapped around the exterior of 201 Kent Street in the city’s CBD.
The ‘wrap’ at once both transformed the building into an enormous billboard, and left anyone who drove past on the nearby freeway with no doubt that they were in a city hosting an Olympic Games.
Impressive though it was, the chances of seeing something similar again in Australia are slim.
Damien Rath, national development manager for Cody Outdoor Advertising, says such building wraps are common in Europe, where they are often used to disguise construction work.
However they’re generally forbidden by Australia’s local councils, unless they have a perceived cultural or community benefit. 201 Kent Street’s wrap was allowed in 2000 because of its association with the Olympic Games.
“There’s not really an environment now where we can have them approved,” Rath says.
“ … it is arguably becoming more difficult to deal with environmental law, particularly when we are called by Councils to examine permits associated with signs which have an historical context or existing use rights, which need to be measured against current town planning codes.”
“In addition, in NSW the industry has seen the introduction of state-based State Environmental Planning Policy (SEPP) 64, which overrides many council controls (and) has attempted to deal with third party signage on a broader scale …
“ … I believe in the industry’s view (it) requires considerable modification for it to be effective and workable for the industry, advertisers and government.”
Rath says the industry’s lobby group, the Outdoor Advertising Association of Australia (OAAA), plans to raise the issue of building wraps with the NSW Government in the near future.
But it is issues like these that make some in the industry feel Australia is lagging in some sectors.
“In my experience Australia provides sound, innovative and generally well-maintained outdoor signage,” Rath says. “Plant is comparable to, if not better than, anything I have seen in the US.
“I would say Europe is more progressive with its innovation and acceptance of exploring the medium.
“This is best evidenced by the widespread acceptance and use of temporary ‘building wraps’, particularly to conceal building scaffolding on key sites under construction.
“Some of these wraps are not only large but contain great creative.”
Despite some of the restrictions commonly associated with outdoor advertising, Rath says property owners and managers are increasingly seeing the medium as useful.
“Outdoor advertising is becoming more important to property owners or managers looking to value add to a property by generating additional income streams, similar to that of adding telco facilities to properties,” Rath says.
“Generally property owners view outdoor advertising sites as a good revenue stream for very little effort.
“That is, no lessor/tenancy fitouts or incentive costs and little disruption to existing tenants uses.
“In most cases the costs of constructing, maintaining and removing the signage are paid by the outdoor company.
“We are also commonly approached by property developers wanting to ‘load’ third party signage into property models to increase prospective returns.
“We have an established group of property developers … who will seek to integrate it into the architecture of the building.”
Rath believes the inclusion of outdoor signage in the design phase of properties will become standard practice over the next two to three years.
But while the potential for dollars is there, they’re not getting any easier to extract – planning hurdles are not likely to just go away anytime soon.
“Generally it is becoming more difficult to comply with increasingly restrictive town planning controls brought about by councils,” Rath says.
“I would say this is this case across most capital cities, as the outdoor advertising market enters a maturity phase.
“This largely stems from the perception of some town planners of (the) perceived environmental impact of outdoor signage.”
Rath says market research during the Olympics period refutes this, showing a majority of people were receptive to well-placed outdoor signage depicting interesting creative.
“Having said that, there are councils which are innovative in understanding a balanced approach to satisfying the needs of outdoor operators by permitting the development of new advertising signage, which can provide information to the community and add to the vitality and vibrancy of different areas.
“We believe these Councils are forward thinking rather than simply enforcing prohibitions.”
Interestingly, Rath doesn’t believe councils are trying to retreat from their own past decisions allowing signage on property.
Instead, he says councils are starting to get more sophisticated in how they deal with the issue.
“From a planning perspective, I don’t know that it’s a bad thing for the industry.”
