2018-03-06 Services & Organisation Committee Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                                                     6 MARCH 2018


8                        SUNRISE BEACH NEIGHBOURHOOD SHOPPING CENTRE - SHOP 8 LEASE
                         RENEWAL
DOCUMENT INFORM AT ION




Author                              Property Manager, Clint Irwin
                                    Corporate Services Department

Index                               ECM/ Subject: 46.01 Lease

Attachments                         Nil



EXECUTIVE SUMMARY
Not Applicable

RECOMMENDATION
That Council note the report by the Property Manager to the Services & Organisation Committee
Meeting dated 6 March 2018; and
A.                       Approve the new lease agreement to Sunrise JEM Pty Ltd. for Shop 8, Sunrise Beach
                         Neighbourhood Shopping Centre for 5 years commencing 23 April 2018; and
B.                       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 lease renewal is to the existing tenant.


REPORT
Sunrise JEM Pty Ltd. has been the lessee of Shop 8 since the lease transferred to their
management in October 2016. In the intervening period, Shop 8 has continued to trade as a
supermarket, which has been the case for many years.

The current 5 year lease expires on 22 April 2018 and the lessee has requested that a new lease
be considered for a further 5 year term to commence on expiry of the current lease. The current
rental is $102,554 (excl GST) per annum plus outgoings. Australian Valuers have undertaken an
independent valuation, which values the rental at $98,500 per annum plus outgoings. The lessee
provided a rental offer of $93,000 per annum plus outgoings. Council did not accept this offer. After
negotiation, the lessee has accepted the independent valuation rental figure. The lessee has
maintained a satisfactory rental record over the current lease period.

Previous Council Consideration
Ordinary Meeting Minutes, 20 October 2016, Item 4, Page 7

That Council note the report by the Property Manager to the Services & Organisation Committee
Meeting dated 11 October 2016 and approve the proposed transfer of the lease for Sunrise
Neighbourhood Shopping Centre, Shop 8 – Supermarket, located at 2 Grasstree Court, Sunrise
Beach from Yenbazaar Pty Ltd to Sunrise JEM Pty Ltd.

Finance
While the proposed rental figure is less than the current rental figure this is considered acceptable
given it aligns with the independent market valuation figure. Revenue will be foregone if the lease
renewal for Shop 8 is not approved and a public tender process is required. There will be a minor
budget impact in the current financial year, which will be absorbed within the Property branch
budget. The 2018/19 draft budget will include the revised revenue forecast.

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