2021-09-07 Services & Organisation Committee Meeting Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                              7 SEPTEMBER 2021


3     PROPOSED NEW LEASE – SHOP 8 SUNRISE NEIGHBOURHOOD SHOPPING CENTRE

Author            Property Advisor – Commercial Property, Robyn Mercer
                  Corporate Services Department

Index             ECM/Subject: 46.01 Leases

Attachments       Nil


EXECUTIVE SUMMARY
Not applicable.

RECOMMENDATION
That Council note the report by the Property Advisor – Commercial Property to the Services &
Organisation Committee Meeting dated 7 September 2021 regarding the lease of Shop 8, Sunrise
Neighbourhood Shopping Centre and:
A.    Agree to enter a commercial lease of the premises to Tro Management Australia Pty Ltd, for
      a ten (10) year term, as generally outlined in the report;
B.    Agree to an initial rent-free period of 12 months;
C.    Authorise the CEO to award up to 5 subsequent lease extensions each of 3 years, subject
      to the lessee complying with the terms of the lease, and
D.    Note that capital investment of up to $700,000 will be required to be considered in budget
      review 2 or 3 to fund the expansion works required once a lease is finalised.

REPORT
The purpose of this report is to seek Council approval to enter into a new lease for Shop 8 - Sunrise
Neighbourhood Shopping Centre. Council owns the Centre and Shop 8 is the largest tenancy in
the Centre comprising 305m2. It has traditionally been leased as a convenience store/grocer and
is the key anchor tenancy at the Centre. In recent years the shop has been vacant which has
affected the performance of the Centre.

At Council’s April Ordinary Meeting, Council agreed to enter into a commercial lease of the
premises with Tanglewood Company Pty Ltd. Subsequently, Tanglewood provided notice that it
did seek to continue lease negotiations for Shop 8.

Colliers International (Council’s managing agent for the Centre) have continued to actively seek a
new tenant for the vacant shop and have received an offer to lease from Tro Management Australia
Pty Ltd for an IGA supermarket. The lessor’s proposed operation will require expansion of Shop 8
to approximately 500m2.

In accordance with their role as managing agent, Colliers has undertaken an assessment of the
lease proposal and supporting information as per the Tenant Assessment Criteria noted in
Attachment 1. The proposal scored highly against the criteria and Colliers notes in their opinion
‘…an IGA is an excellent fit for the Sunrise Beach Shops’.

The agreed rent achieves a fair market value in line with an independent market valuation. The
primary lease provisions proposed are as follows:



                                                                                     Page 19 of 55