2019-04-09 Services & Organisation Committee Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                                                          9 APRIL 2019


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 Leases

Attachments                          Nil

EXECUTIVE SUMMARY
Not applicable.

RECOMMENDATION
That Council note the report by the Property Advisor to the Services & Organisation Committee
Meeting dated 9 April 2019 regarding the commercial lease of Council premises at Shop 3,
Sunrise Beach Neighbourhood Shopping Centre and:
A.                       Note the previously proposed lease of the premises to Casey Reid & Julie Sevier reported
                         to Council in August 2018 did not proceed;
B.                       Agree to enter a commercial lease of the premises to NEPP Pty Ltd (ATF The Parcheta
                         Family Trust) for a three year term, as generally outlined in the report;
C.                       Agree to an initial rent-free period of 4 months; and
D.                       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. A report to Council in August 2018 detailed a
proposed lease for the premises for a new café but the prospective tenants chose not to proceed.
Council’s agent, Ray White Commercial Noosa, has continued to seek submissions from
prospective tenants and an in-principle agreement for a new lease has been reached with local
business owner, Kahryn Parcheta of Noosa Exercise Physiology & Pilates. Ms Parcheta intends
to relocate her exercise physiology, clinical pilates and allied health business to the premises.
Documentation to support the lease proposal has been provided, including financial information
and fitout plans. 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
         Lessee Name:                           NEPP Pty Ltd ATF The Parcheta Family Trust
                                                (Trading as Noosa Exercise Physiology & Pilates)
         Premises:                              Area 3 on Lot 8 RP901384
         Agreed Gross Annual Rent               $35,138 plus GST (including outgoings)
         Effective Net Annual Rent:             $28,848 plus GST
         Nett Lettable Area:                    72m2
         Initial Lease Terms:                   3 years
         Options to Extend:                     2 x 3 years
         Market Rent Reviews:                   Market reviews to occur prior to commencement of years 4 & 9.
                                                Fixed increases at CPI prior to commencement of years 5, 6, 7 & 8.
         Outgoings:                             Included

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