2020-02-11 Services and Organisation Committee Agenda

SERVICES & ORGANISATION COMMITTEE MEETING AGENDA                                              11 FEBRUARY 2020


8                        PEREGIAN DIGITAL HUB - HALF YEARLY REPORT TO 31 DECEMBER 2019
DOCUMENT INFORM AT ION




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

Index                               ECM/ Subject/ 102.01 Economic Development

Attachments                         Nil



EXECUTIVE SUMMARY
This report provides an update and review of the performance and activities at the Peregian
Digital Hub (The Digital Hub), for the 6-months to 31 December 2019.

The objective of The Digital Hub is to operate a commercially sustainable co-work facility whilst
delivering public service outcomes that develop the digital ecosystem and assist to meet the
objectives of Council’s Local Economic Plan, with a particular focus on accelerating the
diversification of the local economy.

Following a very successful first 12 months of operation to 30 June 2019, The Digital Hub has
continued to build momentum and create increasing evidence of the positive impact this Council
investment is having on local individuals and the economy (see highlights below).

The core financial results continue to be in line with budgeted expectations and the significant
increase in commercial sponsorship revenue has resulted in revenue for the 6-month period to
31 December 2019 being 20% ahead of budget. Overall, half year actual results show an
operating deficit of $49k, which is $25k more favourable than the budgeted deficit. This additional
sponsorship revenue will be invested in upcoming activities such as: the expansion of digital sub-
groups; the roll-out of technology skills development; and seeding of major initiatives such as
FireTech 2020. Coupled with the scheduled receipt of second year funding of the incubator
support grant from the Queensland Government valued at $25k, the current strong financial
position is expected to continue.

Lease revenue is consistent across the year, representing approximately 20% of total budgeted
revenue and Co-work membership revenues have grown strongly year on year. One of The
Digital Hub’s office tenants, indicated at the end of October that they were closing their Sunshine
Coast Office and would need to terminate their lease. Council’s commercial leasing partner,
Colliers, were engaged to secure a replacement tenant. Interest was received from multiple
prospective tenants and terms have been agreed with an exciting Noosa-based technology
company with a lease to be executed pending Council approval. The Digital Hub lease revenue
stream may experience a reduction of up to $10k during the second half of the financial year as
part of the tenancy transition, however future lease revenues are expected to be higher than
current levels.

Some of the highlights for this reporting period include:
                       Five Digital sub-sector groups are headquartered at The Digital Hub and these groups
                         range from technologists to screen producers with a total membership of over 1,000
                         members, a 6-month growth rate of 24%.
                       Technology One increased their support of The Digital Hubs activities. The $50k
                         sponsorship has supported the growth in digital meetup group to more than 1000 members
                         and moving forward this assistance will support potential internships and contribute to the
                         development phase of a business acceleration program - FireTech 2020 – a key focus for
                         The Digital Hub in 2020.

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