Business Specialist CFP | Local Government Expert | Political Adviser
The City of Subiaco is inviting submissions from the public regarding the development of a new-style Bunnings’ offer. One of the most contentious parts of the offer is the amount of rent to be negotiated over a 50 year lease agreement for the site.
Homebase is the holder of the lease and Bunnings is a tenant of Homebase. The representatives of Homebase want the site to be rated and valued based on what the site is currently used for, that is “bulky goods”. The site is zoned commercial/residential. If the site was used as commercial office, the rents would be significantly higher. Retail is the next highest rent followed by bulky goods and last but not least, residential.
The challenge in negotiating rent for the site is what it will be used for. The article below may give us some clues. The new store at “Armadale will be the first Bunnings store in WA to stock its full range, such as kitchens and carpets, because of deregulated trading hours… But because the new store stocks the full range, it is classified as retail, not hardware, which means it is restricted to 11am-5pm on Sundays when its other stores can open longer”.
Does the “full range” mean that Bunnings will be a retailer in Subiaco? and have restricted hours on Sunday? and should pay retail rent for the site so that it is fair competition for other retailers in Subiaco? I leave you to ponder the answers to these questions…