2020-02-11 Services and Organisation Committee Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                              11 FEBRUARY 2020


2    PROPOSED LEASE TENANCY FOR PEREGIAN DIGITAL HUB

Author            Economic Development Manager, Anthony Dow
                  Environment and Sustainable Development Department

Index             ECM/ Subject/ 102.1 Economic Development

Attachments       1.   Colliers Letter


EXECUTIVE SUMMARY
Not applicable.

RECOMMENDATION
That Council note the report by the Economic Development Manager to the Services &
Organisation Committee Meeting dated 11 February 2020 regarding the commercial lease of
45sqm approximately of space at the Peregian Digital Hub and:
A.   Agree to enter a commercial lease of the premises to Fireball International Pty Ltd. for a
     three year term, as generally outlined in the report;
B.   Agree to an initial rent-free period of 3 months; and
C.   Authorise the CEO to award up to three subsequent lease extensions each of 1 year,
     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 45sqm of
commercial space, upstairs at the Peregian Digital Hub. This space has become available due to
a ‘break-lease’ situation, with former tenant Commtract advising Council in early November that
they were closing their Sunshine Coast Office and consequently would need to terminate their
lease.

Sourcing and evaluation of prospective tenants has been undertaken by Colliers, Council’s
contracted provider of Property Management Services, in accordance with the Local Government
Regulation 2012 and guided by the Sound Contracting Principles set out in the Local
Government Act 2009.

Colliers has worked collaboratively with the Digital Hub Director to ensure that Council’s strategic
objective of bringing together the optimal mix of technology company tenants in the Hub is
achieved. Accordingly, the assessment of Fireball International Pty Ltd as a prospective tenant
for the Hub was guided by criteria that evaluates both their ability to meet the commercial
obligations of the tenancy and their fit with the objectives and culture of the Hub.

Colliers has provided Council an outline of the procurement process, timeline and assessment
criteria, refer Attachment 1.

In its assessment of the Commercial terms, Colliers make the following statement;
“The commercial lease terms provide an increase on the previously obtained tenancy rental while
providing a fair and competitive accommodation solution for the tenant. The rental rate offered is
higher than most Sunshine Coast commercial office space on “face-value” however the ancillary
benefits provided to the tenant well-justify the higher rental rate as the entire deal represents
excellent value for money. The “rent free incentive” is consistent with current market incentives
for office space.”

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