For clubs with marinas on Crown land, how rent is calculated has changed – and you may have missed it completely.
Crown Lands has “soft” released a new Crown Lands Marine Leasing Framework. This combines several key documents into one with the intention of streamlining and simplifying the leasing process for clubs. However, it is not as straightforward as it seems and there are many factors that clubs need to be aware of.
At this moment in time, the Framework is applied on a case-by-case basis, and the exact applications of the procedures are still being worked through. But there are two clear major changes: rent will increasingly be tied to what your club earns from the Crown land it occupies, and lease terms are now linked to Capital Expenditure and that can accumulate tenure of up to 100 years.
For management and committees heading into a lease renewal or a new lease, understanding that shift now is far better than discovering it at the negotiating table.
Below, we outline some of the major changes, and why expert guidance will matter more than ever when your lease comes up for negotiation.
Why now?
To understand where the new framework is heading, it helps to understand what wasn’t working. MFA have spent more than 20 years working on Sydney’s waterfront, and we see this reform as a long-overdue correction.
Until now, marina owners on Crown Land have faced significant uncertainty at the end of their leases. Under ICAC guidance on direct negotiations, when a term expires, a new lease must be put to market in other than a few specific circumstances. Competing for a new lease was often a lengthy and complex process with no guarantee of success.
Uncertainty flowed straight through to capital investment decisions. Without secure tenure, tenants were naturally reluctant to invest in a marina that they would have to compete for in the near future. Additionally, a lease approaching its terminating date was of little value and as such the assignment of the lease was unattractive to potentially purchasers. The result has been ageing infrastructure across our waterways.
The new leasing Framework tries to fix both sides of that equation. It links longer lease terms to genuine reinvestment, and it makes sure the public receives a fair return from public land. At its heart, it’s about returning money and services to the public while giving tenants the confidence to invest.
Key Change: Rent tied to revenue
Under the new Framework, marina rent is no longer just about the value of the land. A core component, known as Revenue Rent, is calculated as a percentage of the gross revenue a club earns from income-producing activities on Crown land.
At the core of this reform is the new Capital Expenditure (CAPEX) vs Total Gross Revenue (TGR) matrix — a transparent mechanism designed to reward long-term investment and strengthen industry confidence.
The matrix is casting a wide net. Berthing, slipways and boat ramps, boat repairs, maritime industrial uses and land-based areas such as hardstand can all fall within scope, and different activities attract different percentage rates.
How each of your revenue streams is categorised, and how much of it is attributed to Crown land, will directly shape what your club pays in rent. Understanding these individual uses is incredibly important for future lease negotiations that may be in place for the next 100 years.
Kay Change: The Public Value Contribution Plan
The new Crown Lands Marine Leasing Framework includes a new matrix, the Marina Public Value Contribution Plan. This policy is “designed to encourage marina tenants to provide publicly accessible facilities at their premises to improve community use”.
This procedure works alongside the Framework, and monetarily rewards marinas that provide facilities the community can use via a points-based system.
If marinas provide public facilities, at no cost to the public, lease owners can receive points for these contributions. And these rental reductions are quite significant, with a potential 2% reduction in revenue rent from 11% to 9%.
For many clubs, public access and community use are already part of who they are and what they do. Presenting that value in the way Crown Lands needs to see it is where an experienced hand makes the difference.
More beneath the surface
Revenue rent and public value contributions are only part of the picture. The Framework also brings changes to how under-used areas are treated, how revenue is split where operations cross the Crown land boundary, when an alternative valuation approach may apply, and how rent is estimated, reported and reconciled each year.
Each of these carries detail that can significantly affect a club’s rent position. The right outcome almost entirely depends on a deep understanding how the provisions interact, and how Crown Lands is interpreting them in practice.
Marine Facilities Australia has a long-standing relationship with Crown Lands, built through years of regular, professional engagement on behalf of our marine clients. For any club approaching a lease negotiation, that experience means you are not working it out from scratch, and you have someone in your corner who understands the Framework.
Negotiate with an Expert on your team
Clubs don’t need to navigate their leases alone. MFA’s understanding of the Framework, combined with our experience with Crown Lands, means we can help your club understand where it stands, identify risks and opportunities early, and negotiate from a position of knowledge.
If your club has a lease renewal on the horizon, or wants to understand what the new Framework could mean for its future, contact the MFA team. We’d welcome the conversation.
This article is general in nature and should not be exclusivly relied on as the basis for any commercial decision.
