Lot Fourteen

In reply to the Hon. S.C. MULLIGHAN (Lee) (25 November 2020). (Estimates Committee B)

The Hon. R.I. LUCAS (Treasurer): I have been advised the following:

In any commercial leasing agreement, the standard industry practice is to provide a level of lease incentive. The current Adelaide CBD office market incentive rates for comparable properties to the heritage buildings located at Lot Fourteen, are between 30 per cent to 40 per cent of total gross rental. This is taken either upfront as a contribution toward fit-out construction works, or as rental abatement over the term of the lease. These benchmarked rates have been determined in consultation with the external third party project leasing agent.

The incentives offered to tenants at Lot Fourteen are in line with the commercial leasing CBD office market rates for equivalent properties and in most cases incentives are lower than the market rates due to the demand for space at Lot Fourteen.

Five tenants are currently receiving some form of market lease incentive from Renewal SA being either rent free periods or capital towards fit-out. The value of current incentives is $1.036 million with the time period for these incentives to be paid being over the next three years being the lease terms.