2014-05-20 Planning & Organisation Committee Agenda

PLANNING & ORGANISATION COMMITTEE MEETING AGENDA                                      20 MAY 2014


8    SUNRISE NEIGHBOURHOOD SHOPPING                     CENTRE – SHOP 5 NEW LEASE
     AGREEMENT

Author            Senior Project Officer, Michelle Stirling
                  Corporate Services

Index             ECM/Application/LEAS13/0016
                  ECM/Subject/Property Management 46.01 Building Leases

Attachments       Nil


EXECUTIVE SUMMARY
Not applicable.


RECOMMENDATION
That Council note the report by the Senior Property Officer, Property and Facilities to the
Planning and Organisation Committee Meeting dated 20 May 2014 and
A.   Approve the new lease agreement in the new company name of Australian Leisure and
     Hospitality Group Pty Limited, for 5 years commencing 2 January 2015;
B.   Authorise the Chief Executive Officer to award a subsequent 5 year extension of the lease
     subject to the lessee complying with the terms of the lease; and
C.   Apply the exception to the requirement for tendering of the lease under Section 236 (1) (c)
     (iii) of the Local Government Regulation 2012 as the renewal is to the existing tenant.



REPORT
The purpose of this report is to seek Council approval of a 2 x 5 year rental agreement to the
existing tenant (the Bottle Shop) occupying Shop 5, Sunrise Neighbourhood Shopping Centre.
Due to the evidence of existing high rates of vacancy in the commercial property market,
Council’s Property and Facilities Department requested Ray White Real Estate, Council’s acting
management agents, to approach the existing tenant offering a new lease of 5 years with a 5
year option.
The Sunrise Neighbourhood Shopping Centre, at 2 Grasstree Court, Sunrise Beach, was
constructed on Council freehold land by the Noosa Council in approximately 1996 as Council
identified the Sunrise Beach area as lacking local facilities. The 8 shops provide a rentable area
of 927m2 and have enjoyed close to 100% occupancy since construction.
The lease with ALH Group Ltd for Shop 5 the Bottle Shop expires on 1 January 2015. The lessee
has had an exceptional rental record since being awarded the tender in 2008. Under Section 236
(1) (c) (iii) of the Local Government Regulation 2012, Council is not required to tender for the
leasing of a property if it is re-leasing to an existing tenant. The requirements for this exception
are that the rent is to be at market value as determined by an independent valuer and that a
relevant Council resolution is first obtained.
CBRE valuers have undertaken an independent valuation which values the rental per annum
plus outgoings. The existing lessee has agreed to this proposed new rental figure. The lessee
advised they have changed their name to Australian Leisure and Hospitality Group Pty Ltd, have
provided the relevant documentation and requested that Council issue the new lease in its new
name.


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