Published on Thursday, 24 September 2026 at 3:30:00 PM
Background Information
What is this about?
The matter before Council relates to the lease arrangements between Council and Donnybrook Medical Services – the lessee – for the building located at 41 Bentley Street, Donnybrook (locally known as the Donnybrook Medical Centre).
The lease has expired (term ended 30 June 2026), and a direction is needed for future tenancy arrangements.
Who is involved?
The building is owned by the Shire and leased to multiple tenants, including Donnybrook Medical Services, which operates the Donnybrook Medical Centre from part of the premises.
Why is Council taking this approach?
Council is seeking to balance several important considerations, with the intent of maintaining service continuity today while giving the Shire, the tenant and other stakeholders time to consider the best long-term outcome for the community, the precinct and the asset.
The report prepared by Shire staff presents essential information and outlines several recommendations for Council’s consideration, ensuring that decisions made are well-informed. They do not prevent the current tenant from continuing to occupy the premises, nor do they predetermine any future leasing, development or asset decisions.
Council’s Decision
This matter was raised at the Ordinary Council Meeting (OCM) held on Wednesday 23 September 2026, where Council approved a 12-month arrangement that will serve as a “holdover period” applied retrospectively from 1 July 2026 (from the point the existing lease officially expired).
This option balances the continuity of essential services with providing both Council and the Donnybrook Medical Centre with additional flexibility while longer-term arrangements are considered by both parties respectively.
What does this mean?
No future lease arrangements have been determined at this stage, and the matter will need to be raised at a future Council meeting for a formal decision. In the meantime, from 1 July 2026 to 30 June 2027:
- The terms and conditions of the existing lease will remain in place
- Rent amounts will be based on the independent market rental valuation
- Donnybrook Medical Centre can continue to serve the community
- Council can consider key factors to support lease arrangements, ensuring decisions are well-informed
Key factors that Council must consider
Allowing time for informed decisions
The future of the site involves a range of considerations, including health service needs, stakeholder interests, community outcomes and long-term planning for the broader health and aged care precinct. The recommended approach provides time to maintain continuity of services while Council engages with stakeholders (including the current lessees), considers all available information and develops a well-informed understanding of future opportunities before making decisions with long-term implications.
Adapting to new information and managing a changing situation
Following the September Agenda Briefing Session (ABS), Council received additional correspondence from the lessee outlining a revised position regarding the tenancy and future arrangements for the Donnybrook Medical Centre. This correspondence was received after the officer report had been prepared and considered through the ABS process, introducing additional matters for Council's consideration that were not fully reflected in the original report and recommendations.
Maintaining essential community services
The priority is ensuring continuity of medical services for the community while future opportunities are explored. The recommended outcomes presented to Council support the continued operation of Donnybrook Medical Centre while longer-term arrangements are explored by both parties, both collaboratively and independently.
Planning beyond the immediate lease decision
As the site forms part of a broader community health and aged care precinct, Council is seeking to understand future opportunities for the area before making decisions that could influence the site's long-term use. While the Department of Health has primary responsibility for the strategic direction of the precinct, Council considers it important to engage with key stakeholders and understand how Shire-owned facilities may support future health and aged care outcomes.
Balancing asset management and financial responsibility
Council also has a responsibility to manage community-owned assets fairly, transparently and in the best interests of ratepayers. While recognising the importance of local medical services, charging rent below market value would reduce income from the asset, meaning ratepayers would effectively subsidise part of the tenancy costs.
Meeting governance obligations and legislative requirements
As a Council-owned asset situated on Crown land, future property and leasing arrangements can involve legislative, governance and administrative requirements that must be carefully considered. This is especially important if a new lease arrangement is required, as this particular situation would likely require Council to complete a Disposal of Property under section 3.58 of the Local Government Act 1995. This legislation defines a lease as a form of property disposal, and comes with its own compliance requirements and actions that must be completed before the lease can be granted.
This means that the new lease arrangement would not come into effect immediately or soon, as this is an extensive process that would take a significant amount of time to complete.
Commercial sensitivity, confidentiality and transparency
Given the ongoing lease negotiations, market rent review process and the commercially sensitive nature of the matters under consideration, discussions and documentation that relates to lease negotiations and future tenancy arrangements may be confidential. This is because, per section 5.23(2)(c) of the Local Government Act 1995, disclosure of this information could reasonably be expected to prejudice the commercial position of the Shire and/or the tenant.
Refer to the Minutes for the September OCM to see the full report and corresponding attachments for this subject.
View Past Council Meeting Documents
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