Is Sydney on a set path for a third CBD in Liverpool?

Australia’s largest city is at a critical moment of maturity and is expected to grow to over eight million inhabitants by 2050. To manage this exponential growth, PwC’s Jeremy Thorpe argues that it is not enough to sit back and enjoy the ride, but to actively pursue a third CBD in Greater Western Sydney.

Liverpool is one of the oldest inhabited regions in Australia and was named after the Earl of Liverpool who was then the Secretary of State for the Colonies. Located 40kms east of Sydney’s traditional CBD, the area may not be the first thought for a new high-density urban precinct. However two major developments have driven the concept of having a third business district in the city.

Currently, construction of Western Sydney Airport is under away and is expected to bring with it a number of jobs to the region. The development is happening 20kms further west of Liverpool and is expected to be operational by 2026 in order to service the growing Western population. According to Western Sydney University, the population of Greater Western Sydney will grow to over 3 million by 2036. It currently stands at 1.9 million. 

“Government investment is critical, but the Western Sydney Airport will likely be the longer term catalyst if Liverpool is to evolve as a new CBD. This may be a combination of: new firms attracted because of the new investment opportunities looking for Western Sydney headquarters; and firms reliant on the airport for their business model.”

Parramatta, the second Sydney CBD is already exploding as a new urban hub for the city, is “underpinned, so far, by government infrastructure investment and the movement of NSW government agencies from the CBD. These have proved to be catalysts for additional private investment and a shift to the delivery of higher value services,” said Jeremy Thorpe, Partner in PwC Australia’s National Economics & Policy Consulting team.

Thorpe notes that many cities, especially in Australia retain a monocentric form. “This model, of which Greater Sydney has been an example, offers advantages of agglomeration, high business density and vibrancy. However, the monocentric model also gives rise to negative externalities - the diseconomies of agglomeration in terms of high commercial rents, costs of living/housing, costs of labour, and congestion.”

He believes that it is possible to identify best practice from a number of Asian cities internationally.  Taking Singapore and Seoul as examples, Thorpe highlights the two high density metropolises ability to maintain multiple sub-centres. Seoul is currently building two new CBDs both between 12-15km from the historic CBD.

The PwC Partner also notions London’s Canary Wharf, as proof that success for a second CBD is possible, but may require more than one investment cycle. “In these cases the second CBD came to fruition 20-25 years after initial planning,” he said. “Most successful second CBD developments have utilised a range of demand-side drivers, used planning tools effectively, and accessed a wide range of other public policy tools in order to shape and promote the district.”

He suggests that it is time for the State and Commonwealth Governments to also view Liverpool in a similar way and provide the catalytic investment that moves the CBD further into professional services. “This is not a tomorrow issue. Making the most of Liverpool now is clearly the initial agenda. But it would be a shame if at least one eye is not focusing 30 or so years out so that Liverpool can take advantage of the amazing opportunities before it to evolve to be Sydney’s third CBD and the CBD of the Western Parkland City.” Thorpe concludes with a warning. “Great places don’t just happen by chance.”