24 NOVEMBER 2021
ISSUE 266
REAL INDEPENDENT LOCAL WEEKLY NEWS
Smoke on the water
News
The Entrance MP, David Mehan, has welcomed the release of the overdue updated Central Coast Local Flood Plan but said it still fell short... See page 5
Out&About
Coast Opera Australia has partnered with Central Coast Stadium to present A Night of Enticement Under the Stars on December 4... See page 13
Huge thick plumes of smoke filled the air from South Tacoma to the sea and householders were forced to close windows and doors as large clumps of ash fell in Blue Bay on the afternoon of Friday, November 19.
Business
See page 11
Bounty Close property sold for $652,088 A 3,622 square metre property at 3 Bounty Close, Tuggerah, has been sold by Central Coast Council to its current tenant, Central Coast Group Training (CCGT) Limited, for $652,088. According to a valuation report from Knight Frank the value of the property, if it was assessed as having ‘vacant possession’, would be about $3.7M – more than five times the actual sale price. CCGT owned the 3 Bounty Close land which it transferred to Wyong Council in 2013 to secure a Commonwealth Government grant to construct the building it has now purchased back from Central Coast Council. CCGT entered into a lease with Wyong Council which carried over to Central Coast
Council which enabled it to pay a peppercorn rent of $120 a year plus CPI increases with a lease until 2054 and two additional five year lease options. It also had an option to buy back the land after February 1, 2020. During the sale process, Knight Frank estimated a fair market rent on the property would be $175 per square metre net per annum or about $245,000 a year. It said in a swot analysis that the buyer profile included the “sitting tenant purchaser” enabling the current lease agreement to be extinguished to maximise the capital value of the property or an entrepreneurial investor realising the asset’ value in 2054. The CCGT facility at 3 Bounty Close was built using a
Commonwealth Government Community Development Grant via the former Wyong Shire Council. The recent sale of the Tuggerah building to CCGT came to light when it appeared on a list of properties sold as part of Council’s asset sale program, reported in the agenda for the November 23 Council meeting. Council said the sale was related to an agreement resolved by the former Wyong Council. “The lessee of 3 Bounty Close, Tuggerah exercised its option to purchase the land and Council sold this property in line with a market valuation,” the staff report said. The settlement date was listed as June; the valuation price was $652,088; and the property changed hands at that price.
The valuation report was dated February 3, 2020. A letter of instruction from Greg Best, General Manager of CCGT and suspended Central Coast Councillor, said: “Given the 40-year lease at peppercorn rent the Lessee expects the valuation to be nominal, however, it is bound by the terms of the option to purchase at valuation”. The Knight Frank report explained that “the current lease reflects a ‘peppercorn rent’ currently at $130 per annum net”. On this basis Knight Frank determined the value of the property to be $652,088. “We have chosen to value the property as at the date of valuation taking in to account the Peppercorn Lease Agreement in place,” the Knight Frank valuation said.
“The valuation herein reflects the passing rental until the end of Term Certain, i.e. 2054 and the terminal value of the property at that point. “We note the tenant has rights of occupation for a further 2 x 5 years, as per the lease. “Exercising these options would significantly impact on the value assessed herein by extending the terminal value assessment of the property for a further 10 years until 2064. “The value of the property with Vacant Possession has been assessed at $3.7m and this is the assessment we would be adopting for a mortgage valuation under similar circumstances, i.e. where the sitting tenant is buying the property from the landlord.
Almost $7.8M has gone into Central Coast Council coffers from the sale of eight properties in the northern suburbs, to help with its financial recovery. See page 23
Sport
A wet, cold and windy Sunday afternoon in Newcastle reaped A-League opening match dividends for the travelling Central Coast Mariners, starting off their season with a 2-1 win. See page 32
Continued page 4
Puzzles page 19
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