2018-08-07 Services and Organisation Committee Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                                                           7 AUGUST 2018


2                        PROPOSED LEASE OF SHOP 3 SUNRISE BEACH NEIGHBOURHOOD SHOPPING
                         CENTRE, 2 GRASSTREE CT, SUNRISE BEACH
DOCUMENT INFORM AT ION




Author                               Property Advisor, Denis Wallace
                                     Corporate Services Department
Index                                ECM/Subject: 46.01 Lease/Application/LEAS18/0001
Attachments                          Nil

EXECUTIVE SUMMARY
Not applicable.

RECOMMENDATION
That Council note the report by the Property Advisor to the Services & Organisation Committee
Meeting dated 7 August 2018 regarding the commercial lease of Council premises at Shop 3,
Sunrise Beach Neighbourhood Shopping Centre and:
A.                       Agree to enter a commercial lease of the premises to Casey Reid & Julie Sevier for a three
                         year term;
B.                       Agree to an initial rent-free period of 3 months; and
C.                       Authorise the CEO to award two subsequent lease extensions of 3 years, subject to the
                         lessee complying with the terms of the lease.

REPORT
The purpose of this report is to seek Council approval to enter into a new lease for Shop 3 of the
Sunrise Beach Neighbourhood Shopping Centre. Council owns the shopping centre and most
recently leased Shop 3 as a hair salon. The previous lease expired in June 2018 and the tenant
chose not to exercise its option to extend its lease.
Submissions from prospective tenants were sought via Council’s agent, Ray White Commercial
Noosa, and in-principle agreement for a new lease has been reached with local residents, Casey
Reid and Julie Sevier, to establish a café. The proposed new lessees have provided
documentation to support their lease proposal including references, financial information,
budgets, fitout plans and a business plan to allow evaluation of their suitability. The material has
been assessed and the new lease proposal is deemed suitable. The agreed rent achieves a fair
market value in line with an independent market valuation for the premises. The primary lease
provisions proposed are as follows:

Lease Provision                            Proposal
Premises:                                  Area 3 on Lot 8 RP901384
Annual Rent:                               $30,000 plus GST
Nett Lettable Area:                        72m2
Initial Lease Terms:                       3 years
Options to Extend:                         2 x 3 years
Market Rent                                Market reviews to occur prior to commencement of years 4 & 8. Fixed increases
Reviews:                                   at the lessor of 3% or CPI prior to commencement of years 2, 3, 5, 6, 7 & 9.
Outgoings:                                 Responsibility of lessee
Permitted Use:                             Café/Bar/Restaurant
Rental Free Period :                       3 months
Bond:                                      3 months rental and outgoings
Special provisions:                         Installation of a grease trap of a minimum size of 2,000L to be undertaken by
                                                the tenant in accordance with environmental health requirements.
                                            Council will allow exclusive use of an additional 25m 2 outdoor dining area,
                                                via separate annual permit, charged in line with its adopted footpath dining
                                                fee for the area.

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