Diggers Rest Investment Spotlight

If your business is bursting at the seams, it might be time to consider Diggers Rest as part of your expansion strategy.

The community has a unique local feel, and has been growing at a rate of 13-25% annually for four years in a row. 

Situated in one of the fastest growing regions in Australia, the population of Diggers Rest has grown from 3,981 in 2019, to 5,297 at the time of the 2021 census, and based on average growth, could be expected to have a population of close to the 6,000 people by now.

Source: Australian Bureau of Statistics, Regional Population Growth, Australia (3218.0). Compiled and presented in profile.id by .id (informed decisions).

With additional residential development underway and in the planning, the population is expected to increase to over 13,000 residents by 2051.

For businesses, this growth momentum represents a great chance to expand into a new suburb which already has a strong spending base. Currently, large parts of that spending base are escaping to nearby Sunbury and other suburbs that have larger services, hospitality and retail offerings, both within Melton and outside of the Melton LGA.

Banks Drive, Diggers Rest, managed by Fitzroy Commercial has ready-to-occupy commercial offices and retail spaces available.

According to Spendmapp by Geografia, a service that analyses and visualises actual LGA banking data across 14 expenditure categories, residents of Diggers Rest expended a total of $190.62m in the period from November 2021 until October 2022.

This amount can be broken down into Local Spend of $22.37m, Escape Spend of $113.22 mil, Online Spend of $55.03 mil, and then once again into internal (suburb within LGA) or external (suburb outside LGA) escape and visitor spending as illustrated in the tree map below.

Annual Expenditure Overview for Diggers Rest
Source: Spendmapp by Geografia

The overall Escape Spend of $113.22m (59.4% of total expenditure) is relatively high in comparison to other suburbs in the Melton LGA.

For comparison purposes, suburbs such as Melton South (46.8% total Escape Spend) and Caroline Springs (37.2% total Escape Spend) have much lower relative escape spend while online spending, as a percentage of total spending, is relatively consistent at ~25-29% of total spending between the three comparison suburbs.

The chart below shows seven out of the fourteen expenditure categories that are available via Spendmapp by Geografia for the period of November 2021 – October 2022.

Expenditure Summary, Diggers Rest (seven selected categories), Nov 2021 – Oct 2022
Source: Spendmapp by Geografia

From the above chart we can see that all seven industries represented in the resident escape spend stack, can expect to tap into additional demand that is currently met via online shopping or by businesses outside of Diggers Rest.

The Grocery & Supermarket category and Specialised Food Retailing may be of particular interest to investors and are analysed in more detail further below.

New Personal Services businesses that can present a strong sales proposition both online and via a bricks and mortar outlet, may be able to claw back both resident escape spend and significant online spending, some of which may be currently going online due to a lack of local in-person services.

The local Dining and Entertainment category is supported by both external and internal visitors. While there seems very high potential for new operators to tap into existing visitation patterns and into resident escape and online spend, success when it comes to shifting spending in this category, depends on a complex system of factors such as taste, food trends and quality of food and service. It is further limited by a general desire amongst diners to seek and enjoy variety and combine travel outside the suburb with entertainment.

It is worth noting that of the $106.09mil of resident external escape spend, $40mil is spent in the suburb of Sunbury alone.

Diggers Rest, Top 5 suburbs for external escape spend, Nov 2021 – Oct 2022

Source: Spendmapp by Geografia

With the right type of investment and offering, it is reasonable to assume that a considerable proportion of this escape spend of $40mil could be retained in the local community.

This is especially valid for categories such as Grocery/Supermarket (~$12.1m per annum to Sunbury), Specialised Food Retailing ($2.73m per annum to Sunbury) where convenience and minimal travel times are often the main determinants of buying decisions. Operators may also expect to tap into an additional $1.13m of internal escape spend (suburbs within Melton LGA) and external escape spend of $1.83mil to Taylors Lakes in these two categories.

If you have general questions around the opportunities that exist for your business and your sector in Diggers Rest please contact the Venture Melton team.